Job Board Overload

Want a job in finance? Job boards—on major agglomerative sites like Monster.com, on finance-specific agglomerative sites like eFinancialCareers.com, and on individual firm and bank sites—list plenty of finance jobs. The problem is that each listing, no matter where it’s listed, is pretty much guaranteed to have application overload. I.e. job boards and companies with job boards are seeing numbers that would be impossible for even the largest of Human Resources teams to sift through, and HR departments are not exactly known for having eyes to spare.

Of course, this isn’t a problem unique just to finance jobs. For almost any job in almost any industry the demand far exceeds the supply. With 12.2 million Americans still unemployed and an unemployment rate hovering at 7.8%, according to an early January 2013 Bureau of Labor Statistics release, this is hardly a surprising quandary. But just as people in finance jobs tend to deal with more money than almost anywhere else, so are their numbers in terms of job board overflow larger than almost anywhere else. Thousands, even tens of thousands of people, might apply for just one job. Why? The pay is good, the living (supposedly) easy (even though this living “easy” often requires 100-hour work works), and the prestige and chances for advancement higher than in many other careers.

The problems with job boards are ample, the solutions—not so much. Who is responsible for coming up with the solutions? Agglomerative job boards are making great traffic with so many applicants, but if they want to keep the business from the job listers’ side, it might be up to them to make the change. But banks and firms might have to change their approach to looking at and comparing applicants, as well. In other words, they cannot expect job boards to happily solve all of their recruitment problems for them. And in part, they haven’t. Traditional on-campus recruiting at “top” schools and networking have increased importance in the hiring process once again.

The dilemma is perhaps scariest from the point of view of the applicant, though. Applicants spend time creating usernames and putting together profiles and uploading their resumes on numerous sites, and once they’ve pressed “apply,” there is no actual guarantee that that resume will be opened on any Human Resource personnel’s computer screen. And if the applicant did not attend a “top” school, then he or she must work even harder than applicants who did attend one to make networking connections offline—because just one in, just one currently employed Associate or Vice President or Project Manager, could make all the difference in his or her future.

In the current situation, then, companies risk not finding the diamond in the rough, because they do not have the time or capabilities to comb all that rough, and the applicants who are those hidden diamonds enter the job arena at the risk of not being found and thus not having a way to pay their future way. One, or preferably all, side has to give in and start thinking creatively, start making a change. Or maybe it will be up to a fourth party—one who could revolutionize the job board or sweep it away with an altogether new system. As with most things, only time will tell.

Turning the Corner onto Wall Street

Applying for finance jobs is a bit like applying for college: You have your reach, target, and safety options. Except it isn’t as likely to find a “safety” firm as it is to find a safety college. Of the estimated 1.5 million people graduating from four-year colleges, hundreds of thousands will try to go into finance. It takes a lot of time, effort, and savvy to get Wall Street to notice you—the one, individual you—back.
 
A generation or two ago, money-making jobs students hoped to land fell more into the medicine and law categories. Nowadays people want to make money, and they want to do so right out of college—not after another four years of medical school, plus residency, or after three years of law school. The two industries with the most stable right-out-of-college promise seem to be finance and tech, and many tech jobs require specific skill sets, like engineering or computer science, even at the BA level.
    
On the finance side, even those who do elect to (or find the need to) attend an MBA program, it is a year shorter than law school, and many first-year MBA students already have two years of Wall Street analyst salary lining their pockets. And most finance firms are not major-specific in their career recruitment; experience and personal skills matter more than a “business” concentration. Especially for those who already have student loans taking bites out of their bank accounts, finance starts to sound like an ideal industry choice.

But don’t finance jobs equal sitting at a computer all day digging through Excel spreadsheets? Most any job today requires some face-time with a computer screen. And while yes, most finance jobs do involve a close relationship with Microsoft Excel, there is also a lot more to the story. Most positions involve a great deal of research—whether it’s of stocks, commodities, companies, or industries—and an even greater deal of analytical thought. Being an analyst is not simply a matter of plugging numbers into Excel formulas.

So let’s start with the reaches. In investment banking, these would be bulge-bracket banks—the world’s current nine most-profitable firms. This list includes Bank of America, Citigroup, Goldman Sachs, and Morgan Stanley. These are also the banks with the most stringent and hardest-to-breach recruiting processes. If you make it in and get an offer, congratulations. If you don’t, welcome to a very large crowd. Target banks might be more boutique ones. These are smaller banks with smaller staffs, so they are not necessarily looking to hire x number of analysts for every graduating class like Goldman would. Their recruitment cycles are thus less stringent, and especially if you are able to make a personal connection, it may be a slightly easier in.
 
This breakdown is only for investment banking. Each finance sector—from sales and trading to consulting to private wealth management—has its own hierarchy of companies. As with applying for college, if you only shoot for the ones at the very top, you might end up staying at home for the next four years. And as much as you might still appreciate mom’s cooking, that is not the most desirable option. 
Wall Street is no easy street to find a parking place, but once you do get one, you will know you have earned it and deserve it. And after a couple of years, you will be able to park a very nice car.

This Isn’t Your Grandfather’s Investment Bank

Picture an investment banker. You might start with the shoes: a freshly shined pair of calfskin Oxfords. Then the clothing: a navy blue suit, crisply pressed white button-down shirt, and a tie—not too funky, not too flashy. Hair: neatly combed and clean-shaven. This picture is almost as accurate now as it was fifty years ago. Except that on most iBanking floors today, you would find a few less full suits, a more diverse proliferation of hairstyles, and a decent share of skirt suits, heels, and ponytails.

     But don’t let appearances fool you, investment banking jobs in today’s world are not what they were a few decades ago, nor do they take place in exactly the same kind of institutions. Indeed, investment banking is a constantly evolving sector.

     First, the deep history: private banks began providing investment-banking services in the early 19th century, but the true father of the investment bank on American soil was Philadelphian Jay Cooke. His Jay Cooke & Company, in existence from 1861 to 1873, bought and sold securities for clients via telegraph. After the Civil War era, there was a financial service boom that ultimately split the nascent investment banking world into two camps: the German-Jewish one (i.e. “immigrant” bankers) and the “Yankee house” one. That gave way to an early-twentieth-century domination of the market by a tight fist of firms, some of which are still around: J.P. Morgan & Co; Kidder, Peabody & Co; Brown Brothers; and Kuhn, Loeb & Co. The first bulge bracket was born. 

     Then from 1933 to 1999, banks were not allowed to function as both investment banks and commercial ones. They had to pick. This was because of the Glass-Steagall Act, passed right after the 1929 Stock Market Crash, which was appealed just before the turn of the millennium by the Gramm-Leach-Bliley Act. Able to again underwrite securities while also taking deposits, commercial banks entered or re-entered the iBanking game. For example, Morgan Stanley found a new competitor in its once-father company J.P. Morgan, which had gone the commercial bank route in the 1930s. 
Fifty years ago, iBanks focused on advising clients on public offerings and mergers and acquisitions. Come the 1980s, that trend was superseded by proprietary trading, which spans stocks, bonds, commodities, and derivatives and trades on a bank’s own money rather than that of its customers.

     What changed the face of investment banking most of all is what changed the face of most businesses: technology. With computing devices and then computers, trades could happen faster than ever before, at greater volumes than ever before, and in response to more subtle fluctuations than ever before. Investment banking jobs would and never could look the same again.

     But most significantly for current candidates, since your grandfather’s—and since your father and older cousin’s time, too—there has been that still all-too-recent and painful event called the “Great Recession,” or the “Lesser Depression,” or “that terrible thing that happened in 2008.” Those seeking investment banking jobs today are up against tougher standards, slighter chances, and a much larger pool of candidates than their predecessors. And investment banking institutions are still paying for and changing practices because of the mistakes made by those predecessors. Banks in 2008 might have benefited from a history lesson of their own: In 1907, J.P. Morgan (the man) apparently locked top banking executives (from more than just his namesake bank) in his office until they came up with a solution for that year’s famous banking crisis.

High Pay Still Found in Finance

     Though the stock market remains wildly prone to fluctuations and the United States barely saved itself from veering off a fiscal cliff at the new year, the high pay of finance jobs has remained a steadfast thing. And the number of people seeking such jobs has, if anything, been on the rise—even as the amount of spots available moves the other direction on the number line.

     “I’m looking to go into finance” is a common phrase among soon-to-graduate and recently graduated college students. But what exactly does “going into finance” look like? Finance is an industry, and the term blankets a lot of different positions. Finance jobs include everything from being an analyst to being a trader, from being a researcher to being a consultant. When most people think “finance,” investment banking, also called iBanking, is what first comes to mind. Specifically, bulge bracket banks like Goldman Sachs, J.P. Morgan Chase, and Morgan Stanley come to mind. But these firms only comprise a small (if highly profitable and reputable) piece of the finance pie. Job-seekers can also break into the finance career bubble through sales and trading divisions, corporate finance, hedge funds (a harder point of entry for fresh BAs), consulting firms, (McKinsey & Co., Boston Consulting Group’s HOLT associates division), private wealth (Charles Schwab, PNC Wealth Management) management firms, and even ratings agencies (Moody’s, Standard & Poor’s). And within iBanking alone, there is further job breakdown into three types of groups: capital market, product, and industry groups. Basically, “finance” is deceptively simple—there are dozens of ways to wriggle into the finance sector.

     The pay, of course, differs from position to position and from company to company. At a big investment bank, first-year analysts will typically make around $70k base salary plus a $10k signing bonus and $50k to $60k year-end bonus. At a hedge fund, the hiring salary can go up to $90-$100k base plus an even more significant year-end bonus—but generally only analysts with an MBA or prior iBanking experience will make this kind of money right off the bat.Entry-level private wealth management salaries can also be over $80,000. First-year traders bring in similar base salaries to analysts but usually expect less of a bonus—around $20K to $30K. Ratings or credit analysts tend to make slightly less than these other positions, around $55K base salary, but compared to the larger scope of American and international pay grades, that is still a more-than-respectable entry-level salary. And once someone is inside the finance worlds, his/her chances for mobility into different sectors and positions greatly increase.

     Of course, no money comes free, and no one getting into the finance world can expect to get his/her salary without doing a lot of work—sometimes 100 hours a week of it. Analysts joke that analysts don’t have a life, and at times that joke rings all too true. But the applications for finance jobs keep coming and will keep coming. The bonuses may not be as extravagant as they once were, nor is the path to rise through the ranks of a firm as smooth and certain. Yet no other industry can promise pretty much across the board $50k plus entry-level salaries, especially after the recession. High pay has remained a stable fact for those who can say they are “in finance,” and in unstable times, that kind of stability is something for which many are willing to fight.