Number of recent graduates in startups on the rise, finance careers remain steady| Oct 11, 2015
The number of University students pursuing careers in startups and technical services has increased substantially in the past decade, while participation in finance and insurance jobs has remained relatively steady, according to the Office of Career Services.
The Professional, Scientific and Technical Services industry has seen a 200 percent increase in alumni employees. For the Classes of 2006 and 2010, this sector hired between 7 and 9 percent of the graduating class. This number jumped to between 12 and 14 percent for the Classes of 2011 and 2014.
Meanwhile, finance and insurance employment rates have fluctuated only between 11.5 and 12.9 percent in the past five years. Between 9 and 15 percent of the Classes of 2006 through 2014 have chosen to work in these industries, according to data from the post-graduation career plans survey from the University’s Office of Career Services.
The timeframe for the post-graduation career plans survey was changed from three months to six months, beginning with the Class of 2011. In the same year, the Office of Career Services began using the North American Industry Classification System as well as the Hoover’s Business Database for the survey.
Director of External Relations and Operations Evangeline Kubu said that while there are students interested in finance and consulting, they are certainly not representative of the majority of University students.
“The financial services industry has been recruiting at Princeton for decades, and they have a long, established history here,” Kubu said. “So they tend to have very visible hiring processes in place, and sometimes, that may be driving the perception that most students are going into finance.”
Pulin Sanghvi, executive director of Career Services, said that one trend that is emerging amongst the career choices of graduating classes is the popularity of technological startups and entrepreneurship in general. He added that companies in the Professional, Scientific and Technical Services industry are much more able to create attractive opportunities for recent college graduates and to give them meaningful work to do.
“I think [the increase in popularity of startups and tech companies] is because that sector of the economy has become structurally larger than any time in history,” he said. “There is innovation that is happening now in so many different areas that that part of the economy keeps regenerating itself.”
Sanghvi said that startups are an extremely popular career choice because they allow students to graduate college and take on positions of significant responsibility very early.
“Our alumni serve as powerful role models as students look to them as examples of what non-traditional paths can look like over time,” he added.
Entrepreneurship professor Derek Lidow ’73 noted that increased media attention is another reason for the popularity of startups.
“The media makes some successful entrepreneurs into sensations – they promote how much money is created by those entrepreneurs – so those are certainly things that attract students and many others into wanting to be entrepreneurs,” he said, noting the media-generated profile is unrealistic because most successful entrepreneurs are not high tech billionaires.
All other industry sectors employed less than 5 percent of the graduating class.
“What we are experiencing anecdotally and what we expect to see happening as the economy continues to evolve is that our students will aggregate less,” Sanghvi said. “What will happen instead is that they will spread out across a much, much broader number of companies, industries, functional roles.”
He added that despite the increasing popularity of the startup environment, there would always be a lot of interest in opportunities that have been traditional paths for University students because some of those platforms help students in learning skills.
Shafin Fattah ’15, an economics major now employed in the investment banking division of Deutsche Bank Securities Inc., said he first tried his hand in the financial industry through an internship during his junior summer. He explained that he wanted to see whether he liked the work and whether what he had heard about the industry was true.
“I don’t know where the future would take me,” Fattah said. “It’s just the first few months at work – you don’t know how the rest of your life will pan out – but yeah, I wouldn’t mind staying in the financial world.”
Fattah noted that there was a strong negative stereotype about people in the financial industry.
“A lot of people are thinking, like, you know, people who are going into finance are doing it for money or something,” he said. “You know there’s a very black and white picture portrayed by popular culture … which shows that it’s a really glamorous world and everything. That’s not really true.”
Markus Brunnermeier, director of the Bendheim Center for Finance, said that the glamour factor is rapidly shifting to tech firms like Google and Apple.
“Mark Zuckerberg and other tech gurus, and not bankers, are the heroes of young people these days,” he said. “Tech firms are changing our world, but they also need to solid finance knowledge to be successful enterprises.”
Brunnermeier added that many interesting new developments at the intersection between finance and technology make the financial industry difficult to predict, and also have important implications for financial regulations and monetary policy.
Brunnermeier said that the interest in the Program in Finance has remained relatively stable over the past few years, though the global financial crisis in the late 2000s caused a slight increase in the numbers. He attributed the uptick to curiosity in what had caused the Great Recession.
According to Melanie Heaney-Scott, Academic Administrator for the Undergraduate Program in Finance, 82 students in the Class of 2015 received the finance certificate, while the Classes of 2016 and 2017 currently have 109 and 91 students enrolled in the program, respectively.
According to statistics from the post-graduation survey for students enrolled in the program in finance, 59.6 percent students pursued careers in the financial industry while 7 percent went on to further their education.
Lidow said his classes in entrepreneurship and design have always been very popular with students across majors. He added that student interest in these classes is growing beyond their capacity, leading to additional sections of classes like EGR 392: Creativity, Innovation, and Design.
Lidow said it is much harder now for a University graduate to feel like they can have a positive impact on a large organization because large institutions have become complacent and risk-averse.
“Large organizations build forces within them to resist change,” he said. “You know, Princeton is a place with a lot of ambitious students, a lot of talented students, a lot of students with tremendous capabilities. And how frustrating is it to go in and spend 40 to 50 years doing something that’s really not using all your talents?”
He added that using best practices, a Princeton students’ chance of starting an enterprise that has a positive impact on the world can be beyond even 50-50, though this is unlikely in fields like technology which attract a large number of startups.
“If you approach a startup using best practices, it is probably a less risky way to ultimately lead a high impact organization than rising through ranks of a huge corporation where your chances are measured in one in a thousand,” he said.
Sanghvi noted that students who choose certain industries immediately after graduation are not signaling that they are going to continue to work in the same place forever.
“We do not see students that are saying, you know, I’m joining a certain opportunity and I know that I’m going to retire in that opportunity,” he said. “What we see instead are students that are thinking of this two- or four-year experience as a building block towards their longer term identity.”
Sanghvi explained that students are also using their experience at the University as a laboratory to answer questions about themselves and to test different parts of themselves out. He said that the students are becoming increasingly mindful and intentional about how they can use different parts of their social, extracurricular, internship and academic experiences to shape themselves.
Lidow said that, at least in the United States, a typical person has a 50-50 chance of being an entrepreneur within their working career, which is often beyond their control.
“Throughout your career you will be faced with decisions on whether or not the place you work is the best place for you to practice your skills and for you to create positive benefits for you, your family and the world,” he said.
Sanghvi said that the entire model in Career Services is shifting towards personalization and towards helping students figure out their unique passions, interests and identity.
“I think the big story of this generation is that they are no longer really falling into categories as much as they are planning their unique paths that are defined by what they really care about,” he said.
Politics major Harsan Sidhu ’15 began working at Uber Technologies in San Francisco after working in consulting.
“I really like the [startup] culture. I like waking up everyday and solving interesting problems,” he said. “And when I go to work, I know that what I’m doing is having an impact on real people. You know, I’m not building some like isolated process.”
Sidhu added that consulting was too rigid for him.
“It’s too suit and tie,” he said. “Like, you can’t call your manager ‘dude’. Like that’s very bad. Or ‘bro’. I called my manager ‘bro’ one time and he stopped me. I like tech — it’s more relaxed.”
Zach Horton ’15, a philosophy major currently employed in the Investment Banking division of Rothschild North America Inc., said that he joined the financial services industry because it was the optimal field to learn business in the least amount of time.
Horton is a former member of the Editorial Board of The Daily Princetonian.
“I wanted to find another opportunity to learn, this time in the workforce,” he said of his choice of industry. “I figured that the field of finance, in particular, presented a unique learning opportunity because it’s incredibly fast-paced.”
He added that even though the working hours are long and demanding, they are very rewarding in gaining good amounts of valuable experience.
Horton noted that studying liberal arts was very helpful because it teaches students how to live, how to think and how to maintain sanity.
“Sometimes in the 'real world', you'll have to do some mind-numbingly dull tasks,” he said. “But studying the liberal arts instills in you a way of thinking that helps you get through the moments of toil, enabling you to see the bigger picture and understand ultimate ends.”