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Poets & Quants: Scott Rostan The Bulge Bracket Rush: Banks Seeking Earlier Access To Biz Undergrads

http://poetsandquantsforundergrads.com/2017/03/06/bulge-bracket-banks-seeking-earlier-access-undergrad-biz-majors/

At the Tippie School of Business at the University of Iowa, Brian Richman has had to adjust to a bracing new reality this year. Leading bulge bracket banks, such as Goldman Sachs and others, have told Richman, director of the school’s Hawkinson Institute of Business Finance, that they are already eyeing sophomores for plum summer internship positions for 2018. Some have even told him they will interview some of the institute’s “high potential” students as early as this spring for internships that will start 14 months later, he says, a first for the school.

“We’ve certainly had sophomores interview for post-sophomore year internships, but we’ve never had a situation here where sophomores have interviewed for post junior-year internships,” Richman adds.  “It’s all part of this cycle of firms leapfrogging each other to compete for talent.”

To prepare the handful of sophomores that he anticipates will participate in these interviews toward the end of spring semester, Richman has amped up the finance work that he does with the students in his institute, getting them up to snuff on concepts that they would normally master their junior year. He’s also bringing in for the first time an outside vendor, Wall Street Prep, a financial training firm, to run model and valuation boot camps for business students.

“This accelerated timeline definitely makes it more challenging and it means students need to develop a knowledge base outside of their coursework,” he says.

PROFESSORS & CAREER SERVICES OFFICERS CHANGE UP THINGS

Wall Street banks gradually shifting the needle on the internship recruiting timeline is a trend that is playing across undergraduate business programs all over the country this spring, and one that is starting to shift the way professors and career services officers prepare students for the internship recruitment and interview process.

Gone are the halcyon days when banks used to interview juniors in the winter months for summer internships. That all changed two to three years ago, when most banks bumped up internship recruiting from the winter to the fall of students’ junior year, causing schools to cancel winter finance treks and amp up interview prep to the summer or first weeks of the semester (see Intern Recruiting Of Business Undergrads Start Earlier & Earlier).

While fall recruiting is still the norm today on most campuses for official recruiting for junior year internships, career services officers at schools like Tippie, the Kelley School of Business, the McDonough School of Business and the McIntire School of Commerce, say that the Wall Street banks are increasingly pushing to gain access to sophomores through events like information sessions, conferences they co-host on campus and brand-building events. Once they identify the most promising sophomore recruits, they may interview them for post-junior year internships off-campus, inviting them to their offices for visits and potentially interviews, say career services officers.

MIXED FEELINGS ON THE PART OF BUSINESS SCHOOL OFFICIALS

Several of the career services officers interviewed say they have mixed feelings about this new recruiting trend, but are doing their best to prepare students for it by ramping up career training, trying to accelerate finance coursework and bringing in outside vendors like Wall Street Prep and Training the Street to run boot camps.

Another popular tactic banks are using to reach promising sophomores is pre-internship diversity leadership programs, where they encourage women, minorities and others with specialized talents to come to NYC to visit the banks for a long weekend in the spring or summer, allowing the banks to get a first look at top talent.

“All the big bulge brackets banks — Bank of America, Citi, Goldman Sachs, Barclays — they are all doing it,” explains Susie Clarke, director of undergraduate career services at Indiana University’s Kelley School. “Once one person jumps on the bandwagon, all their competitors start doing this. It is a race for talent.”

KELLEY MOVES UP AN EIGHT-WEEK CLASS FOR A HANDPICKED GROUP

At the Kelley School, this new reality has caused the school to move up its Investment Banking Workshop, an eight-week intensive class for a handpicked group of finance students that normally takes place in the fall of their junior year, to the spring for the first time this year. The class gives sophomore students an overview of what it is like to work on Wall Street, and gives them insight into the interview process, which will start earlier for some students than ever before this year, Clarke says.

This spring, many of the Kelley School’s most promising sophomores are applying to the banks’ diversity leadership programs, with applications deadlines for these programs as early as March 19th, Clarke adds. Clarke says she hopes the school’s new timetable for the Investment Banking workshop, coupled with a mandatory set of career success classes called Compass, will help prepare these students if they find themselves being interviewed by banks’ recruiters this spring or summer.

Still, even with all that preparation, not all of the school’s top talent is necessarily ready to make decisions about post- junior year internships as sophomores, she believes. “The demand for top talent is starting earlier and earlier, and while it’s unlikely that official recruiting will move to the spring, I think the market is gong to try to push us,” Clarke says. “I think we need to push back a little bit, and we’re trying to do that to some extent. At some point, we have to slow down a little bit.”

MANY STUDENTS DON’T YET HAVE A FULL UNDERSTANDING OF THE OPPORTUNITIES

Rebecca Cassidy, assistant dean and director of the office of undergraduate professional development at Georgetown University’s McDonough School, says that her school is also seeing Wall Street banks focusing their efforts this year on current sophomores for the 2018 internship season.

For example, the banks will begin conducting information sessions targeted towards sophomores beginning March 14 and running through early April, Cassidy says. This accelerated schedule can be problematic for students, as they often don’t have a full understanding of the different roles and opportunities available to them at banks, and are not fully prepared for how intense the internship interview process can be, she adds.

“Students at the sophomore level, and even at the junior level, don’t realize they are really interviewing for their full-time position rather than ‘just an internship,’” Cassidy explains.

AVOIDING THE MORE TYPICAL STUDENT PANIC

The school is attempting to address these issues through the creation of its new 10-week Career Workshop Series, aimed at helping sophomores prepare for recruiting before the banks arrive on campus in March for information sessions. The series includes a week during which students get a rehearsal of sorts on technical questions they might be asked during a banking interview, a session that helps prepare them for the large information session and networking opportunities that the banks hold on campus.

The prep work includes meetings with a group of seniors who have recently been through the recruiting process and can share their insights with students on how to prepare for sessions with recruiters.  By the time students complete the workshop, they’ll have polished off their resumes, cover letters, personal pitches and mock interviews, putting them in a strong position to meet and impress recruiters during information sessions, Cassidy says.

“My belief and hope is that by guiding students through the preparation process in a classroom setting, we will avoid the student panic that we, as career advisors, usually see when students wait until the last minute to prepare for information sessions, applications and interviews,” she adds.

‘EVERYBODY WANTS TO BE FIRST IN LINE’

In addition to this, the school is working to expand banking jobs for students to include opportunities in Los Angeles. This spring, McDonough will be taking 16 sophomores to different banks in the L.A. area, and the firms have expressed interest in only speaking to sophomores, as they’ve already completed junior recruiting for summer of 2017, she says.

The bulge bracket firms’ laser focus on sophomore talent has presented some interesting challenges for business schools with two-year programs like the University of Virginia’s McIntire School, which accepts students into the school their junior year. The banks’ early fall recruiting schedule for juniors has meant that the school’s career services office has recently had to conduct intensive virtual summer career programing for incoming McIntire students to prepare them to hit the ground running when they arrive at school in the fall.

But with interest growing in sophomores who aren’t even officially McIntire students yet, the McIntire School has had to employ new tactics to prepare second-year students for information sessions and potential off-campus recruiting. A number of the Wall Street banks have requested to be present on campus this spring for information sessions geared towards sophomores, confirms Tom Fitch, McIntire’s associate dean of career services and employer relations.  “They’re coming in the hopes of building their brand and highlighting and identifying the top candidates for early fall recruiting,” Fitch says. “Everyone wants to be first in line.”

‘THIS IS NEW TERRITORY. WE KIND OF LAUGH ABOUT IT BUT IT IS THE REALITY’

Fitch decided this year to move the school’s Career in Finance Conference, which usually takes place in the fall for McIntire students who are juniors, to this spring. Some of the banks are co-sponsoring the conference, and all of the university’s second-year students will be invited to come to the conference and hear from bank executives about different finance career paths and how to be competitive in the interview process for internships.

One tactic that banks are using to find talent is deploying recent hires to help them identify promising sophomores, Fitch says. For example, they may ask a newly hired analyst to reach out directly to peers within student clubs. Fitch says he is trying to encourage banks to be sensitive to the level of understanding of second-year students versus third-year students.

“This is new territory. We kind of laugh about it, but it is the reality and we’re shifting accordingly. I think at some point it’s a responsibility that we all really have to revisit this,” Fitch says. “It will be helpful for us in career services to get a better understanding of the success this is creating within the banks. Are the students good hires, are they adding values, are there any regrets on those hires and what are the retention rates?”

IN SEARCH OF THE BETTER, FASTER & STRONGER CANDIDATES

Yet another way schools are trying to prepare students is by hiring outside vendors to help second-year students get exposed to basic finance concepts like valuation or excel modeling. For example, the University of Virginia is planning to bring financial training firm Training the Street to campus this spring to work with second-year students for the first time, whereas in the past these types of boot camp programs were only done for third-year McIntire students, Fitch says.

Scott Rostan, the founder and CEO of Training The Street, said he’s been at many universities recently that are looking to prepare their sophomores to be more competitive when on-campus recruiting officially starts the fall of their junior year. In addition, banks are using his firm to give sophomores who participate in the bank’s diversity leadership programs professional development and interview training on-site at the bank’s offices.

“They’re trying to interview them 15 months early,” Rostan says. “Banks are trying to get their hands on the perceived talent fast. The sooner and quicker they can do that, they believe they’ll get the better, faster and stronger candidates.”

‘WE WERE DOING NONE OF THAT FIRST-TOUCH TRAINING A FEW YEARS AGO’

Matan Feldman, the founder and CEO of Wall Street Prep, also says he’s starting to hear more about banks interviewing sophomores for post-junior year internships, though it’s still just a “trickle” at this point.

Wall Street Prep offers about 30% to 40% of its training programs to universities in the spring, and about 10% of that is schools bringing them in to do what Feldman calls “first-touch” training with sophomores who have limited exposure to financial training. “We were probably doing none of that first-touch training a few years ago, so that is starting to increase,” he says. “It’s just the next phase of this trend that we’ve been seeing for years now.”