Wall Street is starting to lose a war it has long dominated: The battle for talent. Elite schools that once sent hordes of brainy undergrads to big banks aren’t sending quite so many these days. A growing number of America’s top students are joining tech companies to seek their fortunes, or choosing to improve others’ fortunes in the non-profit world.
There’s a snapshot of what’s happening nationally at Princeton University, one of Wall Street’s favorite hunting grounds. As one of the America’s most selective schools, the university has already done some of recruiters’ work for them by bringing the nation’s brightest to campus. Year after year, banks and consulting firms arrive on campus to make their pitch. Students don ties and pantsuits for interviews, and not just economics majors. The banks pull from across campus.
Any bank recruiter would love to snag senior Malik Jackson. Wall Street prizes Ivy League athletes and Jackson plays quarterback. That means there’s a front row seat reserved for him on the train that has long carried Princeton grads to banking.
But he’s not taking it.
He’s going back to his hometown of Jacksonville, Florida to teach middle school social studies via Teach For America.
“As a student body, we all have such distinct interests,” Jackson explains. “It would be a disservice if all those interests were only focused on one field.”
He’s one of a growing number of students resisting the lure of finance and choosing to work in the non-profit sector, a big change from years past.
“I saw just about everyone headed to banks and consulting firms,” says Wendy Kopp, who graduated from Princeton in 1989.
Seeing so many of her classmates students sucked into finance frustrated her. She felt their talents could be put to better use elsewhere. That led her to starting Teach For America, the non-profit which steers talented undergrads to teach in needy classrooms. The program has grown rapidly, drawing heavily from Princeton and other selective schools. Kopp is now CEO of Teach For All, a global network of educational non-profits.
Non-profits got a big assist from Wall Street during the financial crisis. Banks blew up, cut jobs, and students questioned working for the firms that wrecked the world’s economy. Occupy Wall Street grew popular on campuses. When JPMorgan’s recruiters came to Princeton in 2011, a group of Occupy protesters disrupted the meeting. It wouldn’t be the only such protest.
“When I was a freshman, a lot of my upperclassmen friends would tell me about how their friends were going into finance and consulting,” says junior Damaris Miller, one of the Occupy protesters disrupting that recruiting session. “I find that a lot of my friends are not.”
Among Princeton’s 2006 graduates, 45 percent with full-time jobs worked in finance, according the Princeton University Office of Career Services, which surveys where students land a few months after graduation. That number nosedived after the financial crash. By the time the class of 2013 had entered the world, only 24 percent of those with full-time jobs were in finance. (The University’s data include finance and insurance in one category.)
[Note: For the Classes of 2006-2010 there was a 3-month survey follow-up period following graduation. In 2011, the follow-up period was changed to 6-months after graduation.]
Figuring out what students want and how to get them there is the challenge for Pulin Sanghvi, who runs Princeton’s career services office. A veteran of both Morgan Stanley and McKinsey, he understands that today’s students aren’t as easily swayed by the giants of banking and consulting that have traditionally had dibs on elite graduates.
He says today’s students want jobs that have meaning to them. That can mean non-profits, but not necessarily. The day Sanghvi showed me around his offices, Kayak was there interviewing students. Tech companies and startups are scooping up many who might have gone to Wall Street. The percentage of grads finding work at tech companies is soaring as the numbers for finance sag.
“Many [students] are getting excited by the opportunity to disrupt industries, and create new enterprises, and build organizations that may create thousands of jobs,” Sanghvi says.
Part of the reason banks had such a tight grip on elite schools for so long was their hefty recruiting budgets. Many students who weren’t sure what to do just defaulted into finance. Now, they’re going elsewhere.
Plenty still go to Wall Street, of course. Those who are most certain about it gathered recently for an evening meeting of the Princeton Corporate Finance Club. Sophomore economics major Darwin Li is president. Though most undergrads do just one finance internship after junior year, he did his first straight out of high school. He’s now looking ahead to his third, and says he already has a summer offer from a hedge fund.
Li doesn’t come across as careerist or greedy, just genuinely passionate about finance. Someone who should be a banker.
“Growing up I’ve been very numbers oriented, competing in math competitions. I’ve had a very quantitative mindset. I played chess,” he says. “The thought process to accomplish those things is pretty much the same thought process used in a lot of financial fields.”
The campus doesn’t give the impression of disdain for students who go to work for banks. It’s more of a suspicion of those who seem to be doing it for the wrong reasons.
“I wouldn’t say that people are very antagonistic toward people who are pursuing careers in finance, but are more antagonistic to people who originally give the impression that they wanted to work for a non-profit and then switch over,” explains Prianka Misra, an associate editor of the student paper’s opinion section. “It seems like their intentions are entirely at odds with each other.”
Soon-to-be teacher Malik Jackson has no problem with friends going into finance, tech, non-profits or whatever, as long as they’re following a passion, not just a routine.
“You could be a company man and that is totally cool,” he says. “Or you could maybe start your own company. Or you could maybe just try to make the world better. There are so many ways to do it.”
Wall Street is freaked out about elite students passing it by. Banks are changing their recruiting pitch and work environments to compete. But it may be the students they can easily get are the ones who really want to do banking. That could be good for the banks. It certainly seems good for the students.
“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VABEFORE YOU GO