Bull Bear Report Dec 07 2010

Wall Street Steps up MBA Hiring

By kyle stock

MBAs are back in vogue on Wall Street.

Banks and brokerages increased their recruiting at business schools this fall, betting an improved economy will increase their need for qualified spring graduates.

"Two years ago, I couldn't get a bank to take our calls, last year they were taking them and this year, they're calling us," said Maryellen Reilly Lamb, senior associate director of MBA career management at University of Pennsylvania's Wharton School of business. "That speaks a lot to the cautious optimism of Wall Street at the moment."

Some 55% of companies in all industries plan to hire MBAs this year, up from 50% in 2009, but still below the 59% mark of 2008, according to a recent survey conducted by the Graduate Management Admission Council.

And hiring managers are sweetening their deals. The average newly minted MBA will draw an annual base salary of almost $89,200 this year, 3.2% more than those who graduated in 2009, according to the GMAC study.

Wharton recorded a 20% increase in the number of students offered summer banking internships from 2009 to 2010. As many summer interns typically get full-time offer letters from the companies they worked for, Reilly Lamb said she expects a similar increase in hiring for full-time jobs starting in the spring, though Wharton is still a few weeks away from tallying a job count.

New York University's Stern School of business, which places about one-third of its students at investment banks, hosted 10% more bank recruiting events this fall for full-time positions and summer internships. And there are one-third more full-time investment banking jobs posted on the Stern job board, compared with a year ago, according to Pamela Mittman, assistant dean of career services and student activities.

"It's across the board," Mittman said. "And it's been a pleasant turn of events over the past couple of years."

Columbia Business School, which places almost half of its graduates in financial services, also has welcomed more recruiters this fall and recorded a 45% increase in full-time job postings, according to Regina Resnick, assistant dean and director of the career management center. "The backlog of candidates from the past couple of years had been erased," she said.

Harvard Business School is also expecting a flurry of offer letters for MBA candidates approaching graduation, though it is also a few weeks away from tallying the total of full-time jobs, according to Jonathan Shepherd, associate director of MBA career & professional development.

"Things feel very good -- certainly better than they have for the past couple years," he said.

Both JPMorgan and Credit Suisse have increased the number of schools they plan to visit regularly to recruit soon-to-be MBA graduates, though neither firm would say by how much.

Credit Suisse, meanwhile, has already hired roughly 10% more people out of the current crop of graduating MBA candidates, than it did for the 2009/2010 class, according to Andrea Tolchinsky, managing director and head of campus recruiting at the bank.

The recruiting push comes at a tenuous time for finance labor markets. Almost 30,000 industry professionals dropped off the unemployment list in the past 12 months, according to the federal Bureau of Labor Statistics. But 590,000 people are still looking for work in U.S. banks, brokerages and funds.

The surplus of candidates has made companies more selective and student candidates more focused. "Morale is OK, but students are not taking anything for granted," said Resnick at Columbia. "

Crowds of students undecided about their post-graduate paths have thinned. Candidates showing up at recruiting events are, on average, more devoted to the industry, and in many cases, the company at hand than they have been in past years, according to career development officers

"What you've seen fade away are the candidates with the flock mentality," said the head of recruiting at one bulge bracket bank. "Now, the people who are interested in financial services are truly interested in financial services."

Meanwhile, Wall Street firms, many of which shelled out substantial severance payments in 2008 and 2009, are spending more time getting to know job candidates. The biggest firms are quickly moving from large open-invite "cattle calls" to smaller, more personal recruiting events.

They are also hiring a greater percentage of workers out of summer internships.

"They view them as a 10-week interview," said Shepherd at Harvard. "A buzz word that I've heard frequently is try before you buy."

Much of the renewed interest is being driven by demand in finance markets that are hotter than the U.S. at the moment. MBA recruiters this fall are buying talent for offices in Asia, Brazil and Canada, to name a few.

Credit Suisse recently organized a recruiting event at NYU for its emerging markets division, touting jobs in India, Indonesia, Mexico and Poland. The session filled with more than 100 students in just a few days.

Reilly Lamb, at Wharton, said companies are being more flexible in luring U.S. workers abroad, offering short "incubator periods" in the U.S. to smooth the transition to a foreign office.

But the pipeline to Wall Street is still intact and robust.

"The firms that I work with tend to come year in and year out, so generally speaking, all of them are fairly consistently here," said Shepherd at Harvard. "More importantly, though, none of them have been disappearing on us."

Write to Kyle Stock

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