Lately one of my most common questions via email goes something like this:
“I’m a rising senior looking at investment banking recruiting in the fall. However, the market is really tough right now, there have been a lot of layoffs, bonuses were down 30%, and it seems like a lot of the bigger banks may not be hiring much. What can I do to break in?”
The market we’re in right now is definitely the toughest since 2002 or so, and even well-qualified students and professionals are faced with the same dilemma: how to get in when hiring is down.
How A Tough Market Affects You
The primary impact of a tough hiring market is to raise “the bar” of recruiting standards. Back in 2004-2006, friends got into investment banking without previous internships, in many cases without previous finance experience at all.
While it’s still possible to do this, a poor market makes it more difficult, especially at bulge bracket firms.
To have a good shot at getting in at the largest banks these days, you’d have to have previous finance experience or some kind of extremely influential connection (the CEO would be a good place to start).
But what should you do if you have neither of those?
1) Networking: Build It Before You Need It (If you Can)
This one is admittedly difficult to pull off at the last minute, but it is the most effective strategy for breaking in when hiring is down.
If you’re anything other than a rising senior in college, whether you’re a younger student or a working professional, the good news is that you have significantly more time to build up your list of industry contacts.
As I wrote in my original article on the basics of networking your way into investment banking, the two best places to start are your alumni network and friends in the field.
If this is last-minute recruiting (e.g. you are a rising senior), you will have to focus on relationships that actually lead to jobs, and you’ll likely have to do some cold-calling in the process.
2) Give Boutique And Middle-Market Firms Some Love
Back when I wrote about working at a bulge bracket vs. a boutique, I recommended that you go to the largest firm possible. Your experience at smaller places tends to be quite random – it could be fantastic or it could be awful, whereas a bulge bracket ensures that you’ll get at least a decent experience.
These rules go out the window in a tough job market. I don’t care if you have multiple degrees from Wharton or have interned at Goldman Sachs for the previous 3 summers, there’s no predicting what will happen in this market, and you want to spread your net as wide as possible.
The logic is simple: the lower end of the market is less affected by downturns than the mega-deals are, and many boutiques out there are still hiring.
A good place to get started is this thread on Wall Street Oasis on regional boutiques – there are some good names on there to review.
By the way, by “boutique” I don’t mean the likes of Lazard, Evercore or Moelis & Company – those are all smaller, M&A-focused firms with great names and reputations that are on par with the bulge brackets. I’m referring to true regional boutiques that are not “famous” and which don’t get much attention.
3) Consider Private Equity, Hedge Funds And Related Finance Jobs
This one might sound crazy – how can you possibly pursue the typical “exit opportunity” jobs when you have no experience yet?
Truthfully, it isn’t possible unless you’ve had a previous internship in one of these fields or have some other experience that makes you especially well-qualified.
Here are a few possibilities:
- You have a quantitative degree (math/engineering/science) with some financial knowledge – some hedge funds may hire you even without a previous finance internship.
- You worked at a private equity fund or hedge fund last summer – I’ve had friends who have gone directly to one of these following a summer internship.
- You’re a mid-level consultant or corporate development executive – rather than going to banking, consider private equity and venture capital, both of which will value your experience more than bankers would anyway.
4) Expand Your Geography – Go East, Young Man (Or Woman)
The topic of geography and working outside the US has been popular in recent reader Q&A sections, and with good reason – many emerging markets have not been hit quite as hard as the US, Europe, and other developed economies.
If you have the appropriate language skills, you should definitely consider this one – everyone wants to start out in New York, but good luck getting hired at a large bank there with current market conditions.
Many banks have been sending some of their top talent to the Middle East and other emerging markets, so they seem to have noticed the trend and adapted as well.
5) Make Your Resume Shine
This is an easy one that takes far less time than networking, cold calling banks, and learning additional languages so that you can work in other parts of the world, but it’s one that few people actually do.
Just from Mergers & Inquisitions alone, I’ve reviewed over 100 resumes since starting the site last year, and I’m always struck by the number of applicants with great experience and internships who don’t properly convey what they did in writing.
Having a great resume is the difference between getting noticed and not getting noticed – between getting a callback and never hearing back.
I’ve already given a lot of resume advice, from investment banking resumes to private equity resumes, and also have my resume review service for those interested in having a professional, line-by-line critique.
Why Try To Get Into Finance Right Now?
Reading about how tough it is to get hired in finance currently, you might wonder, “Why bother at all?” The answer goes back to what I wrote about in my review of 2008 analyst bonuses: it’s always better to “buy” into a market, whether real estate or the job market, when it’s at the bottom.
If you get in now, you could very easily ride the wave when the market recovers and be earning a much higher income a couple years from now compared to anyone who’s just getting started a few years from now.
The other reason, of course, is that there’s little reason to wait. Taking a few years off to travel would be fun but it wouldn’t enhance your chances of breaking in when the market recovers.