The percentage of MBAs at elite business schools like Harvard and Stanford GSB drawn to tech businesses, many in Silicon Valley, has surged by about 50% over the past four years.
The world’s biggest banks, among them Goldman Sachs and Citi, continue to be displaced by groups like Amazon and Apple as business graduates shun a finance sector facing multi-billion-dollar losses, pay cuts and scandal.
The number of job offers by the tech sector at Harvard, whose alumni include Jamie Dimon, chief executive of JPMorgan Chase, has reached 20% of the class — a level not seen since the dotcom bubble in 2000, up from 11% in 2011. The percentage flocking to Wall Street investment banks has fallen by 50% over the same period.
It is not just the Valley giants like HP or eBay snapping up Harvard MBAs, but start-ups hoping to capitalize on the tech frenzy. “It’s not just the big companies that hired this year,” said Kristen Fitzpatrick, Harvard’s director of careers, adding that one-third of the start-ups are tech companies, predominantly in the Bay Area.
At Stanford in California, the percentage of MBAs employed by tech companies such as Facebook and Google, has surged by 15% over four years to reach 28% of the class in 2015, new data show.
“Tech is very strong and attractive,” Maeve Richard, director of Stanford’s Career Management Center, told BB, adding that that tech valuations have been “very strong” for the past three years.
She said that Silicon Valley is particularly robust for tech recruitment: “It’s a destination that has been attracting people for some time.”
One of the most aggressive tech recruiters has been Amazon. At Michigan Ross this year, the e-commerce group took on 59 MBAs, despite its Midwestern location. “It’s become a virtuous cycle: the more alumni there are at Amazon, the more interest there is in hiring our students,” said Damian Zikakis, director of Ross’ career services.
Overall, tech companies hired 18% of Ross MBAs this year, up from 12% in 2011. Damian put this down to the “constant drum beat” in the media, and student awareness of tech working culture — in which jeans and jumper have displaced the suit and tie.
Salaries and other perks offered by tech are also attractive. “Perks have become more of a given,” said Julia Min Hwang, assistant dean for careers at Berkeley’s Haas School, be it food and on-site services, or telecommuting and flexible hours.
More than 43% of Haas’ MBAs were hired into the tech industry last year, by the likes of Bay Area giants Adobe Systems and Microsoft.
The 2015 careers reporting season shows similar trends across a bevy of top schools. “There is significant interest on the part of the first-year MBAs in technology,” said Susan Kline, co-director of the Career Development Center at MIT Sloan School, where 20% of the MBA class this year were hired by software and internet groups including Dell and PayPal. This compares with just 11% for investment banking.
Some schools say banking recruitment has recovered from the financial crisis. “In New York, the banks have come back,” said Roxanne Hori, associate dean of career services and corporate relations at NYU Stern, which expects 27% of its MBAs to join investment banks this year.
But it appears that overall finance is unable to stem the talent drain to tech. Angel Araujo Herrera left a career managing €95 million in funds with Renta 4 Asset Management. After getting an MBA at Hult International Business School he was lured to Google in Madrid. “You can imagine how shocking it was for me to step into in a company where nobody judges you by your appearance, your suit or your tie,” he said.