With the toll from the World Trade Center attacks still being assessed and the nation's economy and markets swooning, Wall Street's appetite for the best and brightest is looking a little anemic.
The top MBA programs remain a destination for recruiters, and the very best candidates don't have much to worry about. But interviews with headhunters, college advisers and investment banks show that firms are scheduling fewer visits to campuses this year than last, and that the offers they do make are less attractive. One recruiter estimated that talent hunts in some sectors of financial services, particularly investment banking, are down by more than 30% to 40% compared with last year, while starting salaries could fall by as much as 20%.
"Ivy League schools have connections; they're still going to look at those people," said Karen Druziacko, president of recruiting firm Principle Asset. "But I have applicants come to me and say they had to do free internships, that they're not getting as many calls. Their connections are saying there's not as much they can offer them right now."
Salomon Smith Barney, for example, has cut back on the number of schools it's visiting this year to levels of two to three years ago. And the number of hires -- whether they're analysts, which usually have undergraduate degrees, or associates, which tend to have MBAs -- should be more in line with those last seen in the 1990s, the company said.
With several firms rolling out hiring freezes and others laying off workers, the focus in recruiting is on filling niches, with many firms preferring to develop what talent they can from within.
"Companies are waiting until later to extend their offers, and they're looking to fill much more specific needs, to make more specific placements," said Sheryle Dirks, director of the MBA career management center at Duke University. "Summer interns used to come back in the fall knowing they had a job in hand. Now there are significantly fewer. Companies are waiting until October, November and December," she added.
And if a candidate can't turn an internship into a full-blown job, she might be out of luck. "A definite change is to focus on their first-year interns," said Dirks. "Major Wall Street firms have always had robust internship programs, but there is more focus now on using the internship as a way of filling full-time hiring needs, and less focus on hiring second-years who didn't intern."
Of course, that means graduates are far more aggressive about accepting offers these days, even for lower pay. Salomon says of those who went through the company's summer associate program, 70% had accepted by September, whereas they usually wait until October or November.
But those who don't get offers have to look elsewhere. In the past couple of years, entrepreneurship was a popular alternative to working on Wall Street, but the start-up is a less likely road to riches in the current economic environment. Some MBA students are now opting for further education in other highly paid fields like law or medicine, said Joseph Ziccardi, CEO of Wall Street recruiting firm Cromwell Partners Interactive.
"It's not a very robust market for entrepreneurship," said Ziccardi. "When you're moving into a recession, people start re-evaluating what they went to school for. It's easier to retool your education than your career."
Whether the industry will see the kind of talent squeeze it saw in the mid-1990s is open to debate.
"When the stock market is overvalued, and it pulls back, it often overcorrects. The employment market is very much the same. It goes a little bit too far -- that's what it did in 1990-91. Then when the economy came back, they had to play catch-up. They couldn't hire the kind of talent they wanted to."
But job cuts in the business have not risen to the levels they reached in the wake of the crash of October 1987. "I'm not saying we won't get there. But up to this point, companies are not laying people off in droves. They're just not hiring," Ziccardi said. "Demographically, in a world where talent is needed, if we lay it all off now, then we come back in a year and we're in a pinch."