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Investment Banking Recruiting Pipelines

During recruiting season, investment bankers will receive hundreds if not thousands of resumes from human resources to sift through for students to fill positions for. This tends to happen multiple times a year, with separate processes for:

Having been through a series of these processes and being on the recruiting committee for an investment bank, we are able to share some thoughts on the process.

The key point is that investment banking resume screening process is extremely random.

People who are brought in to interview for Goldman Sachs may not be brought in for an interview with a Tier 2 bank – because the volume of resumes submitted leaves so much room for subjectivity and human error. Also, selection is distorted by hiring mandates around diversity initiatives amongst other criteria.

So to be completely clear, even the best resume does not get every interview and some terrible resumes can slip through the cracks and the candidate can find themselves in front of Morgan Stanley.

The takeaway from this is to build a clean resume that appeals to the most people and to apply for as many places as possible. Apply for all investment banking jobs and only stop taking interviews when an adequate offer is received.

The Initial Human Resources Resume Scan

Investment banking recruiting pipelines are extremely structured. Interviews are conducted at a certain time during the year, although this time continues to be accelerated as banks want to give offers to top talent first and snap them up before other banks, in which case thousands if not tens of thousands of applicants apply.

When a process starts, HR will post on the career centers of target universities while also posting a general job posting on their corporate website. The corporate website process or open process is by far the most difficult to get an interview from.

Keep in mind, not all target schools are equal. Although there will be a posting at a semi-target as well as the main target, the spots reserved for main targets will by far exceed the ones for the semi-targets, although this is changing to some extent.

Since 10,000 people apply for every investment banking spot (and for open invites for roles at Morgan Stanley and Goldman Sachs, this can be 200,000 – do not worry half of them are not qualified or may not even have visas), there is simply no way yours truly can sift through all of these resumes with any sort of reasonable effort, it would be an all consuming task.

If you have the law on your side, pound the law. If you have the facts on your side, pound the facts. If you have neither the law nor the facts, pound the table

This means that there are two initial screens. The first screen is a computer screen. If you are from a target school, your GPA cutoff will be 3.4.

If you are not, the GPA cut off will be 3.5. There may be some cursory AI looking at buzzwords in your resume. If you have a terrible GPA (below 3.4), just omit your GPA and sometimes HR overlooks this!

This will thin the resume stack for HR to look at where they will manually cut out anything below 3.6 unless they see brand names and leadership qualities.

HR is extremely subjective and generally does not look for the same things as the actual investment bankers, so a lot of people will get cut at this level that probably should not.

Finally the investment bankers (usually analyst, associates and VPs) will look at the stack, which we discuss in another post. Over here, friends may have resumes and transcripts dropped in at this point, skipping through the extremely annoying online application entirely. So knowing people is far better than not knowing people.

Competitiveness of Investment Banking Hiring Process

Two things to consider for this topic – # of applicants and # of positions. As with everything else in economics, this comes down to supply and demand.

For the summer process, the number of summer applicants is generally a lot smaller. This process is accordingly not as competitive as the full time process because of the following:

  • Not as many people know about investment banking in their second or third year, leaving only keeners to apply
  • Work experience is generally limited in the first two years of school so anyone with a wealth management internship will be miles ahead of anyone else
  • A lot of people party too much and have poor grades in their first two years and cannot recover enough in third year to get past the hard GPA cutoff

However, the number of roles open is reasonably large – banks will overhire summer interns as:

1) this is an extended investment banking interview where fully derisked candidates will start the next year with no bonus;

2) there are tax refunds for paying them since governments want to incenvitize student jobs.

There will be as many investment banking summer analyst spots as full time spots, if not more as many of the full time spots are filled up by returning summers.

As such, the summer internship program is the easiest place to get into investment banking.

Co-op Investment Banking Analyst

The coop process has a far smaller pool of candidates as not as many people are eligible – they generally have to already be registered in the coop program at school. Also, not all schools have coop programs.

On the supply side, investment banks do not have as many coop spots as summer spots, but there are two coop terms in a year. Investment banks are also happy to hire coops as there are no full time hiring expectations, although for good candidates they may bypass the full-time recruitment process for them. Investment banks may also give coops the opportunity to do more than one coop term.

Coop is the second easiest way to get into investment banking.

Full-Time and Off-Cycle Investment Banking Applications

The full-time process is by far the most competitive. By this time, students know what investment banking is and how much new analysts make, they have settled down, gotten their grades up and are practicing hard on interviews.

The screening process here becomes very narrow because of the need to select 20 people to bring in from an initial 10,000. As such, while students with a 3.5 applying for summer would get an interview, practically everyone without an inside connection will be thrown out without a 3.8 GPA unless they fall into an underrepresented minority position.

The off-cycle hire is relatively easy, but at the same time each process is different. Off-cycle hires are at weird times when analysts or associates quit, so there is not a lot of strong competition because a lot of high GPA students who did not make the initial cut are now comfortable with other roles and a lot of people are tied up for whatever reason.

However, a lot of students that did not have backup plans after graduation are at a supreme disadvantage, as investment banks much prefer to hire candidates already working at a professional firm such as Deloitte/PwC or a client.

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ex investment banking associate

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