The current political climate in the U.S. may be shrinking the talent pool from which banks and other financial firms recruit. International MBA candidates who were eyeing top U.S. business schools with a financial career in mind have become warier of applying due to the uncertainty over recruiting, according to a new study. Perhaps more importantly, the problem appears particular to banking.
The annual MBA Applicant Trends report from Stacy Blackmon Consulting surveyed more than 500 current season business school candidates, split roughly evenly between U.S. citizens and international applicants. The vast majority of potential MBAs don’t see the current political climate in the U.S. as an impediment, with 78% saying they were un-swayed or even more likely to apply. That number drops only slightly – to 73% – for those planning a post-MBA career in finance. However, the narrative for the industry changes rather dramatically when you take citizenship into account.
Only 59% of finance-minded international respondents said they were un-swayed or more likely to apply to a top U.S. business school due to the current political climate. A third said they were less likely to apply. Meanwhile, U.S. finance-minded respondents are actually more emboldened due to the “Trump effect” than the overall pool of candidates. Roughly 93% said they were unaffected or more likely to apply, with only 4% reporting being less sure.
The study authors said that the international finance cohort is “more sensitive” to U.S. politics than other MBA candidates due to what they perceive as “recruiting uncertainty” among financial employers. “It has put me under a lot of stress while thinking about applying,” said one international finance-minded candidate.
Large investment banks that have significantly increased their use of highly skilled foreign workers over the last five years are now being forced to reconsider their approach with the Trump administration’s desire to make is more difficult for non-citizens to obtain work permits, according to Bloomberg. Major investment banks have increased their use of H1-B applications for foreign workers by 60% over the last half-decade. Fast forward to this year and banks like Barclays are passing over foreign applicants in some cases where they would have previously welcomed them, according to the Bloomberg report.
It seems the apparent trepidation of banks has trickled down to the next batch of highly skilled international business school grads that they’d look to hire. This could result in a significant talent drain for banks, even if no new mandates are invoked. The threat appears strong enough to inspire some international candidates to remain on the sideline or look to other industries that are less hesitant to bring on foreign workers.
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