Hundreds of MBA and master students were trying to broker employment contacts but it was not the bulge bracket banks that gleaned the most attention. Instead, it was the recruiters from technology groups like Infosys and Gartner that had the longest queues formed at their booths.
The tech sector has risen to become one of the most attractive employment destinations for today’s MBA graduates.
The firms of this sector – including Google, Apple and Microsoft – have always been magnets for technocrats and geek developers, but their allure has stretched to the senior management world as innovative companies have risen in value and in reputation.
At the same time, there has been a massive drop in MBA students entering the financial sector, in part due to a drop in applications and also the shedding of staff at investment banking desks, according to recruitment consultants.
“It is true that a certain risk aversion can be read in [financial] recruiters’ strong preference for candidates with substantial prior experience,” says Pascal Michels from the career services team at IESE Business School.
Last year at London Business School the number of MBAs who joined technology companies was higher than those who joined banks. Amazon hired the most MBAs. With 11, the online retailer overtook Citibank’s eight new hires. Search giant Google was the second largest recruiter with seven new hires – more than HSBC.
Looming rules banning proprietary trading have made investment banking less desirable. European rules curbing banks’ ability to pay high bonuses and force them to pay out more in shares deferred for several years have also acted as a “recruiting sergeant”.
A recent survey of 18,000 business students by the consultancy Deloitte found that the popularity of working in banking had fallen five places to 35 out of 100 potential employers.
The decline in students applying to financial services companies – one of the traditional MBA destinations of choice – may also have much to do with changing societal attitudes in the aftermath of the global financial crisis.
Elizabeth Corley, CEO of German fund house Allianz Global Investors, says: “We have a trust deficit. We just need to get real and acknowledge it.”
The technology industry has emerged as the biggest beneficiary of MBA’s loss of interest in financial services.
At Stanford Graduate School of Business, which has close ties to the Bay Area, 32% of the class of 2013 chose a job in technology, up from 13% in 2011. INSEAD, a business school with campuses in France and Singapore, saw its recruiting season dominated by technology firms last year including Amazon, Microsoft, Google and Samsung.
This run to new career paths mirrors banks’ battles with technology groups. The largest such as Apple have been moving into banks’ territory with financial technology in payments and money transfers, while asset managers and peer-to-peer lenders have cropped up, disrupting the traditional finance market.
“We are seeing a massive step change in growth of contactless [payments] in the last couple of years,” says Michael Saunders, managing director of digital consumer payments at Barclaycard. “It is reaching a tipping point here in the UK,” he adds.
Careers departments cite several reasons for the growth of interest in the technology sector at business schools.
Aside from banks’ damaged reputations, one is that MBAs are less concerned with earning huge salaries.
A survey of 5,600 business school applicants by QS found that the percentage of those pursuing an MBA to boost their salaries has fallen to 33%. The biggest percentage – 64% – want to improve career prospects.
Bonuses in financial services can still make banks the best-paying employers, according to recent surveys, but MBAs from a top-ten school will still earn a basic salary of $118,000 immediately after graduation in any sector, according to data from The Economist.
Still, the banking industry remains attractive to a variety of candidates. Ahneeshkumar Pujari spent nine years working in the IT industry but looked to an MBA to switch from a technical role to a functional one – in finance.
“I was always interested in the financial domain and wanted to learn the finer aspects from a business school,” says Ahneeshkumar, who enrolled at St Gallen HSG in Switzerland.
His career goal is to head the IT division at an investment bank. “The MBA has certainly given me a boost in that direction. It has been helpful to hear from C-level executives during company presentations,” he says.
Students like Ahneeshkumar increasingly see MBA programs as a way to switch careers, and many of them already come from a finance background. At Harvard, 17% of the latest MBA class came from a private equity or venture-capital firm.
“Whether its sector, industry, function, country or region, [switching careers] seems to be driving a greater proportion of candidates,” says Isabella Pinucci, career services coordinator at SDA Bocconi School of Management.
Conor McVeigh spent eight years as a trader with leading financial services groups but enrolled at London’s Cass Business School last year to move away from finance.
“Although it had been very rewarding financially… I had an appetite for further learning and a new challenge in a more diverse environment,” he says.
Financial services companies have also cut back on campus hiring, and are relying more on recruiting undergraduates – who are seen as better value to develop as junior analysts – rather than MBA graduates who will demand higher salaries.
JP Morgan stopped recruiting from campuses in EMEA for its investment bank earlier this year, while most finance recruiters focus their efforts on select business schools, according to Francesco Saita, dead of Bocconi Graduate School. “Most of the top recruiters have become more selective,” he adds.
The large technology companies recruit heavily on campus and many groups such as Amazon offer internships for MBAs, which greatly enhance a student’s chance of securing a full-time career.
“Our internship program generously seeds our on-campus hiring,” says Miriam Park, Amazon’s director of university recruiting. The e-commerce giant's internships last about 12 weeks and are offered to MBAs in technical roles as well as in the operations and finance functions.
“MBAs are very strong problem solvers and analytical thinkers, which makes them a really great leadership pipeline,” says Miriam. She adds that Amazon has increased its hiring of MBAs every year for the past five years. “[We] hire in the hundreds globally.”
Like Amazon, Microsoft takes 75 MBAs a year onto its internship program, and recruits about 300 students into full-time roles.
Microsoft’s quest for the MBA graduate is reflected in employment data. In a recent survey of 5,600 employers who hire business school graduates, QS found that high-tech and electronics companies hired 11% more MBAs in 2014.
Big technology groups have also opened up their recruiting to offer roles to candidates with a wider variety of backgrounds. Infosys has changed the way it goes to market, according to Julia McDonald, head of talent acquisition for EMEA.
“Traditionally we may have focused on a background in tech. But we’re really opening it up now. We’re saying you don’t have to [have a technology background],” she says.
Infosys plans to hire about 200 MBAs globally in 2014. “We can give you the right skills and training,” says Julia.
It is a similar story at Gartner, according to Marie Sullivan who is a company talent sourcer. The IT research and advisory firm does not have a formal internship program, but offers a variety of positions that require an MBA or other advanced degree.
“There’s a fast pace; fast progression. The companies [in IT] are growing at a huge rate and the service providers are growing at a huge rate,” says Marie.
“There’s always a new service or product – something that will be more innovative,” she adds. “The people that get it right will be successful and [will] have a job for years [to come].”
Bayes Business School
Best Journalism school in Europe
When I first stepped onto the campus of City, University of London, I knew I was in for a ride - and not just on the Tube! With its vibrant energy and an impressive repertoire of programs, City U became my home away from home. The Journalism program was kind of a big deal. Rumour was that we were the best in Europe! The lecturers were not just experts in their field; they’re practically journalistic royalty. They were invested, passionate, and had a knack for turning the most flat press release into a riveting news story. With their guidance, I’ve learned to navigate the chaotic world of media like a pro. The campus was a melting pot of every culture, being that we had such a diverse international crowd. Being in the heart of London, I had the world at my fingertips - there was always a new corner to explore, a hidden gem of a cafe to discover, or a street performer! City, University of London wasn't just a university; it was a chapter in my life story that I’ll never forget.
The teacher-learner ration is manageable, giving each learner a chance to gain personal attention. It is also easier following up on the progress of a student, as the numbers per class is not large. the conducive environment for learning includes clean classes, standard desks, world class instructional facilities and the opportunity to engage lecturers even after their sessions. The team spirit at City is above board, with learners getting chance to learn both from instructors and colleagues. This is the university of choice; the place to be.
I liked that each class had a manageable number of learners, making the professor-learner ratio favor knowledge acquisition. I also liked that study schedules were manageable, and not overwhelming. The focus on talents and gifts even within the learning environment makes it possible for learners to achieve the best of their potential, and this has worked to the advantage of those that have schooled at City, University of London
The diversity at City University facilitates interactions and is a direction toward the unity of the world. The classes are well built to match the number and needs of all students regardless of the elements of diversity that set people apart. The use of technology in delivery makes learning even more interesting and achievable. At City University there is no distinction pegged on the issues that make people unique.
The team of lecturers at the Uiversity are well experienced. Their level of insight and the methodologies of delivery works for the interes of the leaeners. My learning experience was largely boosted by the level of knowledge of the professors at the institution, and their passion to transfer the same to learners. I appreciate every class I attended because of the level of insight I was able to gather
The best university I’ve been to
The campus and the people I've met have made it a wonderful experience. I was reared in a small town with a graduating class of only 88 individuals, so moving to City University was a huge adjustment for me. My dorm has more residents than my whole high school combined! I enjoy the atmosphere here, and everyone is so friendly. Outstanding academic options and a stunning campus. Really great from beginning to end. The educators genuinely love what they do, and the students are ready to learn. On or around college, there is always something to do with friends, and the social scene is particularly warm.
Bayes Business School
As a student at City university attending Bayes Business School I would totally recommend choosing this university as the experience is exceptional with great social networking opportunities . Professors are significantly helpful, delivering with excellence and professionalism. Everyone is happy to help and make you feel welcomed in such an esteem university as City, offering exceptional development and guidance through out the course.
Economics and Politics
Incredibly amazing university, the way they polish students and help them boost their morale and think intellectually is worthwhile. Many universities have international partnerships to allow exchanges between their students. The most obvious subjects for these opportunities would be those that involve languages, and the study of people and places.