With the fall job recruiting season at its height, many seniors are facing a new obstacle as they try to land a job in finance. Investment banks, hoping to secure the most talented recruits early, have begun to depend heavily on summer internships to fill their full-time positions, which means fewer available spots for seniors who didn't spend their summer on Wall Street.
The use of summer interns to fill post-graduation full-time opportunities has grown so widespread that several banks this year are not hiring seniors for positions in capital markets, meaning that some students have been left to search for other opportunities.
"The majority of our marketing on campus now in the fall is directed towards internship programs," said Kristina Peters, director and global head of graduate recruiting for Deutsche Bank. "At the top schools, it's becoming increasingly more competitive. It's a bit of a circle. In order for us to compete for top students, we feel it is necessary to go after them in the fall [of their junior year]."
Connie Thanasoulis, director of campus recruiting for Merrill Lynch, said her firm was pursuing a similar strategy. "It's a trend that everyone's been following," she said.
Matt Margolin '05, former USG president and current young alumni trustee, decided to devote the summer before his senior year to his thesis. Not having spent the summer in a finance-related internship made it much more difficult when he began applying for full-time positions with investment banks, he said.
"It did not occur to me that doing an internship after my second year would affect my chances after graduation," said Margolin, who now works as an analyst at Goldman, Sachs & Co.
Though he credited his involvement with the USG as having boosted his application, Margolin said that most seniors without internship experience will have to do a great job in their interview of explaining "why they have not done finance before, and why they want to do it now."
'Increasingly more competitive'
Charles Vu '07, who interned at Deutsche Bank this summer, said that exploring internships early benefits both banks and students.
"The summer interns they hire full-time have essentially passed a 10-week interview," Vu said. At the same time, he added, interns "can get a sense of the culture and the jargon of finance" while learning whether the job would suit them after graduation.
Early internships also allow banks to get an edge in competing for the most talented candidates.
"We have to find the sharpest talent," Thanasoulis of Merrill Lynch said. "I think it's a trend that's growing because students are getting more and more sophisticated at earlier stages of their life."
Though difficult to pinpoint when banks started depending on internships to fill their ranks, interviews with a number of investment bank recruiters and alumni involved in financial services point to the mid-90s as the time when banks began focusing on securing highly talented summer interns.
But Peters said Deutsche Bank is redirecting its efforts away from hiring seniors for full-time positions and toward hiring summer interns, a trend evident in many of the larger banks. "Our first priority is to the students who were with us for the summer," she said. "We target our summer program to be a primary feeder pool for full-time positions."
'Incredible odds'
The increased focus on summer internships mean today's seniors — at least those lacking a summer experience in finance — face a greater challenge in landing a coveted finance job.
"The number of slots available [for seniors] has absolutely decreased," said Juan Sabater '87, a former managing director at Goldman Sachs who was active in on-campus recruiting at the University from 1998 to 2006. "It makes it that much more competitive to get a job."
Deutsche Bank said 75 percent of its hires from the Class of 2006 were former summer analysts. While Thanasoulis said seniors are "up against incredible odds," she was quick to point out that opportunities still remain for them, though applications need to pass a high bar.
"You have to have a very high GPA — and I'm talking 3.6 and above — and if it's not there you have to tell us why," she said. "You have to have that quality that really sells us in the blink of an eye."
Despite the growing emphasis on recruiting through internships, however, Sabater said investments banks will always need to recruit seniors.
"[The recruiting process] should never foreclose the possibility of bringing in a star," he said.
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