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Wall Street Journal: Chirag Saraiya “The Path From Harvard and Yale to Goldman Sachs Just Changed”

Wall Street bank drops interviews at elite schools in a bid to cast a wider net; now all applicants must first submit a video


Goldman Sachs Group Inc.has always sought to attract the best and the brightest. Now it also wants the most committed.

The bank has concluded that helping to widen the pool of candidates beyond those from elite schools like Harvard University and Yale University will enable it to find students loyal to the industry. So it is making changes inthe way it interviews and assesses candidates for summer analyst roles, typically the first-rung jobs for a banking career.

The Wall Street bank is experimenting with video interviews to open up the field to entry-level roles and turn up candidates who aspire to a long-term career in banking, rather than a short stint.

Goldman said Thursday that its recruiters will no longer conduct first-round interviews for summer positions on campus at elite schools like Harvard, Yale and Stanford University. Instead, all candidates for summer analyst positions must complete a video interview, answering prompts from a software program.

While a seemingly minor administrative change,the move alters a rite of passage in finance, in which students don suits and ties for interviews with recruiters or alumni employees. Shifting to video screening allows the firm to cast its net wider and brings it a step toward “leveling the playing field, for recruits from nonelite schools, said Edith Cooper, global head of human capital management at Goldman Sachs.

Videos will be reviewed by Goldman’s recruiting team and the bank will invite those who make the cut to one of its offices for a day of in-person interviews, called “super days.” The hope, executives say, is that opening up interviews to awider field of candidates will turn up people passionate about a long career in finance, executives said.

Other Wall Street firms may follow Goldman’s lead. A handful of large banks have privately shared similar plans to shift away from conducting first-round interviews on campuses, said Chirag Saraiya, a principal at Training The Street Inc., a firm that teaches financial analysis to employees at banks and government agencies, among other places.

Wall Street investment banks have long been content to siphon standouts from the Ivy League and a small handful of other top schools. But Goldman has lately found that students from places like Harvard and Yale might be less likely to stick with the firm over the long term, with many bolting to other jobs afterjust two years, said Russell Horwitz, co-chief operating officer of the securities division.

If recruiters are “going to invest the time to attract people, they want to make sure they’re getting a higher likelihood of people being here longer and having a strong career,”he said. “Having access to a broader funnel of candidates, and thinking differently about experience and background, is just a better investment.”

For example, among the high-ranking executives who sit on the firm’s 4lst floor are alumni of American University, Hamilton College and George Washington University, Mr_ Horwitz noted_ Harvey Schwartz, the firm’s finance chief, is an alumnus of Rutgers University.

Matthew Edgar sent more than 300 emails to get noticed by recruiters and land a summer-analyst job at Morgan Stanley last year. The Fairfield University graduate says the changes will clear the way for more students like him to find a berth in high finance.

“When banks go on campus to interview people at target schools, they’re already going in with an idea that these candidates are more qualified for the job,” said Mr. Edgar, who will begin work next month as a full-time analyst at Sandler O’Neill & Partners LP, a boutique investment firm.

Goldman recruiters will still visit a few dozen campuses to get to know students, host gatherings and answer questions about life at the firm, Ms. Cooper said. For now, recruiters will still conduct on-campus interviews for M.B.A. students, she said.

During their first-round interviews, undergraduates will have to use a video-recruiting software program to answer prompts, said Mike Desmarais, global head of recruiting. Later,the footage will be reviewed by a human, he said. The new procedure will allow recruiters to conduct significantly more first-round interviews than in the past, he added.

In addition, Goldman will deploy more resume-screening technology and is piloting the use of personality tests to better identify students with dispositions reflecting the firm’s core values, Mr. Desmarais said. Those include “grit,” “judgment” and “problem­ solving,”he said.

As junior employees become more important to banks’ business, leaders are working harder to keep them happy. Along with J.P.Morgan Chase Inc. and Citigroup Inc., Goldman has rolled out initiatives designed to boost morale and stem the flow of junior bankers to jobs in private equity, hedge funds or technology firms, which offer comparable pay and a gentler workload.

Goldman recently announced it would no longer rate employees with numbers in performance reviews. Last fall, the bank announced it would speed the path to promotions for top-performing analysts and associates and would try to eliminate some of the grunt work that often falls to younger employees.