Related: How to Get a Finance Job Through on-Campus Recruiting
Volatile market conditions and massive layoffs aren't stopping banks from wooing the next generation of dealmakers on college campuses. At the same time, banks are strengthening their recruitment and retention pipelines by increasing the number of interns from their summer classes they convert to full-time analysts.
Despite the flagging economy and cutbacks throughout the ranks, the nation's top investment banks are still in need of full-time analysts and will continue to hire senior undergraduates, according to bank recruiters, career services directors and students.
Throughout September, bulge-bracket and boutique banks flock to top undergraduate campuses, where they interview senior undergraduates for full-time analyst positions that can last two or three years, depending on the individual's career track.
Bank of America, Credit Suisse and Morgan Stanley are all returning to the same number of campuses to recruit as they did last year. Credit Suisse is even adding locations, according to Andrea Tolchinsky, global head of campus recruiting at the Swiss bank.
Bank of America recently said it would lay off 30,000 employees by 2013, while Credit Suisse plans to cut 2,000 by the end of the year. Morgan Stanley is shedding 300 lower-producing brokers.
None of the banks would specify how many students they plan to recruit, but an average analyst class can have roughly 100 members, according to Chirag Saraiya, an instructor with Training the Street, a Manhattan-based firm that prepares incoming Wall Street workers.
"Our plans [to recruit] are consistent with last year," said Kristen Williams, head of Bank of America's global banking and markets campus recruiting team. "We have our target school list in the U.S. and globally."
"We're not in a 2009 situation," she continued, referring to the fall semester in 2009 when banks scaled back their campus hiring plans in the aftermath of the financial crisis.
Citigroup, which is undergoing a hiring freeze for all non-critical positions, said it "continues to be an active presence on university campuses." Goldman Sachs, Deutsche Bank and Lazard declined to comment.
Schools that are targeted for recruitment, such as University of Pennsylvania, Harvard, NYU, and University of Southern California, are expecting the same frenzied on-campus recruiting processes as last year, according to their career services offices.
Indiana University, whose Kelley School of Business attracts top banks to campus to recruit for the Midwest, lost one boutique bank from its on-campus recruiting roster, but will have nearly 20 banks in total come to recruit.
"We are cautiously optimistic that we will have another good year for hiring," said Pat Rose, director of career services at the University of Pennsylvania in Philadelphia. "Banks will always have a need for an entering class to do the work that analysts do."
NYU is experiencing a 12% increase in recruiting initiatives from investment banks, boutiques and consulting organizations compared to fall 2010, said Trudy Steinfeld, assistant vice president at Wasserman Career Development Center. She believes the increase is due to NYU's convenient location in New York and the ease with which banks can recruit there.
Neil Schreiber, a senior at the University of California who interned at investment bank Stifel Nicolaus Weisel in San Francisco this past summer, began on-campus recruiting last week. Thirteen banks are on campus this year, according to Carl Martellino, executive director of the USC career center.
"All the big firms are here," Schreiber said. "I'm confident I'm going to get a job." FINS reporter Julie Steinberg on Mean Street with Evan Newmark, talking about banks recruiting on college campuses.
From Intern to Full-Time
It's more important than ever for students to secure internships at financial firms if they want to work there after graduation, as banks are increasingly relying on converting interns into full-time hires.
"The intern recruiting process is crucial to sourcing analysts," said Saraiya of Training the Street. "Recruiting for full-time analysts is there to plug the holes."
Keisha Smith, global head of campus and lateral recruitment at Morgan Stanley, said the firm converts between 60% and 65% of its intern class to full-time positions, a percentage consistent with other firms, according to Saraiya. Bank of America's Williams said interns comprise 60% of incoming graduate hires bankwide. On-campus career centers say this number is increasing, though the banks won't confirm it.
"Our primary recruitment vehicle is the summer internship," Williams said. "It's the best opportunity to interview students and give them a chance to experience real work they'll be doing."
Credit Suisse wants to evolve to a model where it hires only from a global intern class, Tolchinsky said. The firm would prefer to see how students perform in an eight-to-10-week internship rather than trying to get to know them during a two-hour interview in their final year of school. She declined to specify how many full-time staff the firm takes from its intern class, but said the percentage was "high."
Banks are still recruiting at schools, but some campuses are seeing a decreasing number of interviews offered. That's because the yield rate, or the acceptance rate of full-time offers, is expected to be higher this year among interns, Saraiya said.
Banks coming to Harvard this year, for example, requested a fewer number of rooms in which to conduct interviews from last year. Indiana is experiencing the same thing, according to Susie Clarke, director of undergraduate career services at Indiana's Kelley School of Business. "They're still coming, but they know they're going to hire from the intern pool, so they'll ask to see 10 people instead of 30."
The trend makes sense for the firms, said Martellino of USC. "If the intern's happy and does a good job for the bank, that's where they make the hire."
At NYU, 9% of the class of 2009 -- across all industries -- reported securing their full-time job offer following their summer internship. For the class 2010, 20% reported receiving a full-time job offer after the internship.
Even though banks are less interested in full-time hires from campus than in the past, it's not enough to worry some students who think they'll get a job no matter what.
Penn senior Shane McWilliams interned at Merrill Lynch this past summer in St. Augustine, Florida and received a full-time offer, but turned it down in favor of trying his luck with the on-campus recruiting process and finding something "more fast-paced."
"It's a tense, competitive environment, knowing that 95% of people in the room won't be chosen," he said. "But it's not a crisis atmosphere by any means."
Related: How to Get a Finance Job Through on-Campus Recruiting
Write to Julie Steinberg at firstname.lastname@example.org