The Wall Street Journal reports that the number of top MBA students entering careers in finance is dropping as grads are passing up jobs on Wall Street. This could prove a significant blow for an industry that has long relied on a steady stream of talented recruits. But with salaries stagnating and banks pushing longer hours onto entry-level workers, finance doesn’t look so posh anymore:
A Wall Street gig “isn’t as prestigious as it used to be” because the future—promotion opportunities, salary gains, even basic job security— is so unclear, says Mark Brostoff, associate dean and director of the career center at the Olin Business School at Washington University in St. Louis. Though the share of Olin students going into finance increased to 22% of job seekers this year from 15% in 2011, many of those gains came at boutique and regional Midwestern financial firms rather than on Wall Street.
One factor affecting student demand: Banks expect young staffers to pick up the slack left by masses of laid-off midlevel employees, without necessarily offering more generous pay packages in return for the long hours. At Harvard Business School, for example, students heading into investment banking—7% of job seekers who accepted jobs, down from 10% in 2011—reported median salaries and signing bonuses were flat with last year, at $100,000 and $40,000, respectively, while other guaranteed compensation fell to $8,750 from $40,000.
This is bad news for the financial industry, and for New York, but it is good news for the rest of us. The best of our talent should not be flocking to Wall Street. When would-be finance wizards apply their talents to a wider range of industries, many more will benefit from their expertise.
But there is a second, even more important point here. Swiftly disappearing are those “escalator jobs” that guarantee a smooth, swift rise to the top within a corporation. It’s getting harder to succeed simply by following the conventional high-achiever path and doing what you are told, even on Wall Street. The careers of the future will be a much bumpier ride, but they will also be more exciting.