Investment bankers were worshipped back in the 1980s. They were popularly known as men who possessed immense talent and ambition and were viewed as the most successful people in society.
But gradually over the years we observe that there was a great change in the preference of the students. 27% chose finance and a meagre 5% became members of Mr Lewis’s master race in 2013.
Why did such a change occur?
After the financial crisis of 2007 this trend was generally found everywhere. The students who were most preferred were from the business schools. But at present we see that the most meritorious undergraduates are being selected. These undergraduates are regarded as people who are more productive and of better value. On the other hand, MBAs have the vast freedom to shift from one career to another.
What problems started to surface in investment banking?
Investment banking requires a permanent staff. Regulations have reduced the banks’ bonuses so the business students are looking beyond and for other avenues in life.
This kindled the spark of interest in the minds of the business students to consider the profession of consultants. McKinsey, Bain, the Boston Consulting Group and A.T. Kearney—accounted for 19% of the 472 students hired from Chicago’s MBA programme in 2013. Consulting did prefer business students from the very beginning.
Why did students shift to consulting?
Business students choose consulting since it allows them access to a high-powered network of alumni who may become future clients. There is also a scope for them to meet senior managers which offers them an opportunity to advance in their careers.
That base salaries for students interested in consulting are among the highest for any industry—a median of $135,000, compared with $100,000 for Chicagoans signing up with an investment bank—only makes the choice easier.
‘The Economist’ made a statement that less than 5% said that higher pay was their most important consideration when deciding to enroll at business school, far behind factors such as “to open new career opportunities” (58%) or “personal development” (15%).
The observation is that a student from a top ten school in The Economist’s ranking will still earn an average basic salary in banking is of $118,000 immediately after graduation. An MBA can cost $250,000 for two years’ board and study which is a very expensive course.
Technology has also won the favour of the MBA students. The proportion of Chicago MBAs landing jobs at technology firms has risen from 6% to 12% since 2007. At Stanford, in the heart of Silicon Valley, it is close to a third. “Many students want to be part of an entrepreneurial environment and make an impact, to feel they are building and shaping something,” says Julie Morton of Chicago Booth.
What are the general trends in recent times?
In recent times it has been observed that the non-banking sectors are directly recruiting MBA students from business schools and are not depending on the banking sector for recruitment. Business schools are directly in contact with such companies.
Presently banks are trying to have a more balanced working atmosphere, are promising better payment and non-working Saturdays and are trying to give the workers benefits which are also being appreciated. But a greater challenge is the advent of online business courses which are also a lucrative offer to many students who are currently employed and are studying online.
These courses are so easy as they are flexible in terms of hours of study. Assignments and assessments are also given and conducted online. So the future is brighter if students choose to study with the business schools.