By Lindsay Gellman, Sara Jerving and Daniel Huang
Wall Street firms are hiring more junior bankers and giving more interns full-time jobs this year.
Bank of America Corp. hired about 40% more full-time analysts and associates this year than last, according to a person familiar with the bank’s hiring practices.
J.P. Morgan Chase & Co. aims to hire 10% more junior bankers than last year, according to a person familiar with the hiring process. The New York bank already has identified or hired about 80% of these junior employees, who will start next summer, the person said.
Goldman Sachs Group Inc.’s intern class swelled to more than 2,500 world-wide this summer from roughly 2,300 last summer, according to a person familiar with the company’s recruiting. At Barclays PLC, the number of interns rose about 20% this summer from a year ago, a spokeswoman said.
Wall Street is wooing young workers as business picks up in areas such as mergers and acquisitions.
“Wall Street is famous for over-hiring and over-firing,” said Michael Karp, chief executive and co-founder of financial recruiting firm Options Group. With an upturn in merger activity, he said large financial firms “are looking to get younger blood into the investment bank.”
As well, many younger analysts and associates have been leaving to get higher degrees such as the master’s of business administration, or M.B.A., or to take other positions.
Wall Street is also facing recruiting competition.
Consulting bumped investment banking as the most popular career choice for M.B.A. students and recent graduates, according to a June survey by Training The Street, a New York firm that trains incoming Wall Street analysts and associates. Among survey respondents, 25% said that they would prefer working at consulting firms, compared with 22% who preferred the large investment banks.
At private-equity and hedge funds, job seekers are finding pay often is greater and the hours sometimes shorter, university career officers said.
About 30% to 40% of analysts at bulge-bracket firms leave Wall Street for private-equity and hedge funds by the end of the traditional two-year stint, said Patrick Curtis, founder and CEO of Wall Street Oasis, an online discussion forum geared toward young bankers. And more analysts have begun leaving for private-equity or hedge funds earlier, after just one year on the job, said Adam Zoia, CEO of Glocap, a financial-services search firm in New York.
At Harvard Business School, about 5% of Harvard Business graduates in 2013 took jobs in investment banking and sales and trading, down from 12% in 2006. During that same time, graduates accepting job offers in the technology sector rose to 18% from 7%.
In response, several banks raised young bankers’ pay, according to people at the banks. They have also implemented restrictions on the days of the week or hours junior bankers are permitted to work.
“The banks are starved for talent at the junior levels,” said Richard Stein, senior partner at executive-search firm Caldwell Partners. “They are looking for all sorts of ways they can keep and attract talent.”
Increasing the number of lower-level employees should help ease weekly workloads that historically were about 80 to 100 hours, according to people with knowledge of the decisions.
Of course, many Wall Street employees don’t mind the long hours, seeing it as a rite of passage and a way to learn about the markets and corporations in a short time.
“When you enter banking, you understand what the culture demands of you, you know what you’re signing up for,” said Jonathan Duarte, an investment-banking analyst in Barclays’s leveraged-finance group.
Speaking of his experience as an intern in the summer of 2011 and analyst at Barclays, Mr. Duarte said: “You get to work with senior managers and watch how they interact with clients. You’re learning how to handle business at a high level. Especially at such a young age, it’s very beneficial.”