For Harvard MBAs, Congrats on a Bank Job Really Means 'I'm Sorry'

Did Dimon's Alma Mater Really Send Just One Top Graduate to an Investment Bank This Year?

Trading Places: More MBA Grads Pick Tech Over Banking

Ruined weekends, PowerPoint drudgery and overnight shifts in Manhattan skyscrapers once were a point of pride for the Harvard Business School graduates who went to Wall Street. Now young stars hold heads high about how lucrative and healthy their lives will be -- elsewhere.

"People used to brag and say, 'Oh yeah, 21-hour days, seven days a week for eight months,' that was a badge of honor,'' said Kiran Gandhi, who like others in this year's class applied to technology companies. "The humble brag is now, 'Oh yeah, I work 9 to 5, I get paid a ton of money, and I have a great life.' It's green juice from vats in the office and amazing organic iced coffee cold-brewed -- the quality of life.''

Kiran Gandhi played drums for M.I.A. on the rapper's international tour during her first year at Harvard.
Kiran Gandhi played drums for M.I.A. on the rapper's international tour during her first year at Harvard.
Photographer: Shiho Fukada/Bloomberg

The allure of Silicon Valley, where hip startups are minting billionaires, is eclipsing that of staid investment banks under pressure to cut risks and costs. This year, a long slide in the number of Harvard MBAs joining banks may hit a new low, even after many of the biggest firms adopted policies to become more hospitable to new recruits. In 2007, about 13 percent of the school's graduates who landed jobs went into investment banking or trading, according to Harvard's reports. By last year, that fell to about 5 percent.

Now a preliminary survey of this year's grads shows only 4 percent intended to join a bank after getting degrees in May. Among the class's 46 Baker Scholars -- a designation Harvard grants the top 5 percent of MBAs -- only one expressed interest.

Those are the findings of Keima Ueno, who got his MBA from Harvard this year. As a student, he served as a peer mentor and wrote a blog on what life is like at the school. So when Harvard sent his class data from a pre-commencement survey, he used it to figure out where the Baker Scholars wanted to go. He wasn't surprised by the results.

"When we hear that our classmates managed to acquire a position with an investment bank, we say 'Congratulations,''' he said. "But we are thinking, 'I'm sorry to hear that.'''

Ueno spent three years in Morgan Stanley's investment bank before returning to school to earn his MBA. Now he's in Japan, running his family's health-care business and a startup Internet retailer.

Technology companies have been luring more top graduates with the promise that they'll not just make gobs of money, but also have a happier life, even if the hours are still long, according to students and recruiters. Last year, about 17 percent of Harvard's business school graduates poured into the industry, up from 7 percent in 2007, its figures show. Banks lost more recruits than any other sector. While Ueno's tally doesn't break out tech the same way, it shows startups alone are attracting 16 percent of this year's class, including six Baker Scholars. The raw survey data listed responses from every scholar but one.

Keima Ueno sorted the results of a Harvard Business School survey to discover that only one Baker Scholar in 2015's graduating class signaled interest in joining an investment bank.
Keima Ueno sorted the results of a Harvard Business School survey to discover that only one Baker Scholar in 2015's graduating class signaled interest in joining an investment bank.
Source: Keima Ueno via Bloomberg

Big banks are fighting back, promising recruits more hours to sleep, the occasional day off and reasonable deadlines. The effort, prompted by the death of a Bank of America Corp. intern in 2013, is driven in part by fear that the brightest students no longer see investment banking as a sustainable career. Goldman Sachs Group Inc. invited celebrity author Deepak Chopra to talk to its staff a few months ago about wellness, relaxation and the value of vacation.

What the banks can't promise is the kind of windfalls that attract graduates to startups. And average pay at investment banks has shriveled since the financial crisis because of a drop in revenue and a greater focus by regulators and shareholders on bonuses. Goldman Sachs per-employee compensation expense fell to $373,265 last year from $661,490 in 2007.

U.S. business schools don't typically release statistics showing where graduates landed until autumn, and Harvard wouldn't comment on Ueno's tally. Kristen Fitzpatrick, managing director of the business school's career and professional development office, said more students are thinking about banking because of the firms' recent efforts.

"The work has been appealing to a lot of people for a while,'' she said. "It's just that the lifestyle needed to get a little better.''

Other business schools are seeing similar trends for a range of reasons. New rules are forcing banks to curtail trading with their own money, pushing investing-focused graduates into hedge funds and buyout firms -- which pay well. The tech boom is luring away entrepreneurs seeking to strike it even richer -- à la Harvard College dropout Mark Zuckerberg.

While Harvard alumni Jamie Dimon, 59, and Lloyd Blankfein, 60, have amassed fortunes in their decades at Wall Street's biggest banks, such opportunities have diminished following 2008's financial crisis and pale to the quick riches possible in Silicon Valley. Dimon, a Baker Scholar, and Blankfein, who earned degrees at Harvard College and Harvard Law School, are each worth about $1.1 billion, according to the Bloomberg Billionaires index. Zuckerberg, the 31-year-old who built Facebook Inc., is worth about $41.2 billion.

At Harvard, it can't help that the pressure on junior bankers has become fodder for coursework, where students are briefed on real-life corporate dilemmas and debate strategies.

"There are several case studies dealing with investment banks wherein students discuss the brutal work environment and incredibly out-of-whack work-life balance,'' Ueno wrote in an e-mail. "The banks' efforts -- their success or lack thereof -- to bring about change have not been discussed, but what is consistently highlighted is the dark side of investment banks.''

Such attitudes vary among schools. When Training the Street, which conducts prep courses for entry-level analysts, surveyed MBA students at more than two dozen campuses this year, banking remained the top pick, drawing 26 percent. Still, buyout firms and hedge funds climbed to 16 percent, up from 11 percent last year.

"I think it's 'the grass is always greener,''' said the training firm's founder, Scott Rostan. "The lifestyle of any financial-services professional can be grueling,'' and an investment fund is "not necessarily night-and-day better.''

Bankers who graduated from the Wharton School of the University of Pennsylvania later expressed the lowest job satisfaction, despite relatively high pay, during a study conducted by Matthew Bidwell, an associate professor of management there. Usually, the two are positively correlated, he said.

"Being at somebody else's beck and call, I think it grinds people down,'' Bidwell said. "It's an extreme kind of long hours, whatever-it-takes, no-boundaries kind of culture.''

"The hours are horrendous, you won't see your family, you will miss your kids' birthdays.'' -- Alexandra Michel

Alexandra Michel, an adjunct professor at the University of Pennsylvania, said that won't dissuade some MBAs from entering the field, particularly if it's to join a top-tier firm such as Goldman Sachs. She spent 12 years studying the culture at investment banks and has tried warning students.

"The hours are horrendous, you won't see your family, you will miss your kids' birthdays,'' she recalled telling them. "The candidate breathes a sigh of relief and says, 'Oh, I can deal with that.'''

Representatives from top investment banks said they're still drawing plenty of business school graduates. Goldman Sachs received more MBA applicants this year for its summer associate program, a feeder for the firm's full-time associate positions, according to Leslie Shribman, a spokeswoman.

"We continue to see strong interest in our programs from students at top MBA schools across the nation,'' said John Yiannacopoulos, a spokesman for Bank of America.

Gandhi, who played drums for M.I.A. on the rapper's international tour during her first year at Harvard, said her father, who was an investment banker, never encouraged her to enter the field. She took a job at the music-streaming service Spotify Ltd.

"When I first met people at HBS and they had worked in a bank, I would pick up on them feeling like they were almost ashamed,'' Gandhi said. "And maybe that wasn't the case when my dad was there 25 years ago, when being at an investment bank meant you were a baller.''

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