As a particular note for MBA graduates… you may note that many recruiters are upping the minimum qualifications and reducing the offered pay for entry level analyst positions. For example, listed minimum qualifications may include an MBA or CPA designation for a mere $60K-70K per year compensation package. Certainly this may seem like overkill for an analyst position, but irrespective… do not be fooled into thinking that such listed requirements suggest that the recruiter is weighing the value of your MBA designation above that of experience… It is simply a convenient screening tool to cut down on the vast number of applicants for which they must sift through. The applicant pool is just too full. Experience rules the market present and undergraduates with experience carry more weight than “green” MBA’s.

 

That stated, I will say that for those of you who put in the time to acquire your CFA (Chartered Financial Analyst) designation, as offered through the CFA Institute, www.CFAInstitute.org, your time of justification may be at hand. Possibly due to the CFA designation having not only exam requirements for proving course mastery, as would any MBA program, but also minimum work experience requirements, recruiters know that all CFA holders will have work experience, whereas this may not be the case for holders of an MBA, who may have yet to have spent any time in the work force.

 

It is important to note for students that even in the best of times competition is fierce for banking positions. So, if you are not from a top-tiered school, you will need to be more persistent and resourceful than those that are. Irrespective, networking as a tool to gain entry into the industry has probably never been as critical as it is now. So, attack your alumni and social network for every angle you can find. Also note that opportunities will be greater for budding i-bankers at the non-bulge bracket, boutique firms than the Goldman Sachs, JP Morgans and other banks that accepted government bailouts. It would also be wise not to overlook the industry opportunities that may exist outside North America, such as in the Asian and Middle Eastern global regions. Keep an open mind in your battle for entry… If successful, you could very well find yourself well positioned to climb in the industry quickly when the market recovers.

 

“Experienced” professionals suffer from the same screening prejudices… and, as such, should know that “transferable” skills may not prove as helpful as one would normally think. “Direct experience” is the rule for all positions and thus… with the pool of candidates so large, the quickest way to cut down on the number of resumes to review is to focus on those with “direct” experience first. You may very well be the best candidate for the position, but a quick resume scan for “direct” experience will most likely result in your “transferable skills” resume being overlooked. 

 

Of course, what is a rule without the exception that proves that rule? The caveat “double-edge” sword on experience being that recruiters seem to be operating on the assumption that all those with 10, 20, or more years of direct experience would never consider working at the vastly reduced compensation rates that the industry is willing to offer at present. Most assuredly the majority would all prefer a reduced paying job over no employment at all, but recruiters are concerned of hiring applicants who may be likely to jump ship as soon as wage opportunities begin to rise again. 

 

“Experienced” candidates would be wise to tailor their resumes to perhaps list no more than their last 10 years of their direct experience and/or use their likely more diverse background to strategically target specific industry niches. For example, if you were involved in the energy and/or healthcare industry for ten years prior to starting your 20 year banking career, you may be able to target that energy or healthcare industry expertise into a banking-type position with a private equity, hedge fund, or consulting firm that has specific interests in that industry. It may also be wise when discussing your previous income to speak in terms of your average income over the course of years, instead of the most recent and most lucrative compensation package you may have just been forced out of. If a recruiter feels you enjoyed a much higher compensation than they are currently offering, you’ll most likely find yourself omitted from their call back list.

 

In short, when it comes to jobs in the investment banking world at the moment, the supply of applicants far exceeds what the industry demands. As such, the “ideal” candidate for recruiters is an applicant that has prior direct experience, but not so much as to make them a likely flight risk as soon as the market turns around. This makes the job hunt challenging for both seasoned and unseasoned professionals alike. Both must do their best to tailor their resume and image to reflect the new “ideal”. At the one extreme… highly “experienced” professionals must carefully tailor their resume to highlight only the appropriate amount of their experience for the job being applied for and at the other extreme… graduate and undergraduate school students hoping to hop into the industry… must do their best to muster enough direct experience to gain their foothold. Internship programs should be pursued with a fervor and your work experience should be bolstered and/or rounded out as an Analyst Foundation Member with the Investment Banking Simulator, www.InvestmentBankingSimulator.com.

 

…Best of luck to you all in 2010.

 

Neil Palmquist, CMAA, CEPA

February 2nd, 2010