For fourth-year students preparing to leave the ivory tower, the rising unemployment rate is a pressing concern. The current economic crisis has reshaped the financial world, and with it, the job market that many University students had been planning to enter this coming year.
Wall Street has been a major source of employment for recent College graduates. According to the University’s Career Advising and Planning Service (CAPS) exit survey data for the class of 2008, of those who had accepted full-time jobs upon graduation, about 19 percent indicated that they planned to work in banking- or finance-related fields. In 2007, 22 percent accepted jobs in banking and finance.
But many of these jobs no longer exist. In past years, major banks recruited new employees on campus, streamlining the application process for would-be financiers. And although banks that have survived the economic crisis, such as Goldman Sachs, J. P. Morgan, Credit Suisse, and UBS, will continue on-campus recruiting for their summer internship programs, they are “scaling back” hiring for full-time positions, according to Lucy Gee, associate director of employer relations at CAPS. After purchasing Bear Stearns in April, J. P. Morgan informed CAPS that it would not be conducting on-campus recruiting at any schools, as it would be busy managing the influx of new employees from Bear Sterns. Banks like Morgan Stanley and Credit Suisse, which are still recruiting, are filling fewer positions than in past years.
While past economic recessions have disproportionately affected unskilled workers, the reverse could be true in the current downturn. In a September post on The New York Times blog “Economix,” Princeton economist Alan Krueger noted that those with bachelor’s degrees or higher have been the hardest hit by the financial crisis. Citing the Bureau of Labor Statistics, Krueger pointed out that from March to August 2008, the seasonally adjusted share of employed college graduates fell by 1.6 percentage points, while the share of employed high school graduates and high school dropouts rose by 0.6 and 0.2 percentage points, respectively.
Students who had hoped to embark on careers in finance are hastily reevaluating their plans.
“The financial crisis has definitely changed the way I’m searching for jobs. I’ve realized that I need to keep my options open and not necessarily only focus on the type of jobs I had originally planned on,” fourth-year Anne Scherer wrote in an e-mail interview.
Gee noted that while job opportunities in finance still remain, job searches will become increasingly difficult and require more personal initiative than in past years. She advised interested students to consider career opportunities with smaller firms, nonprofits, and in industries that have not directly suffered repercussions from the financial crisis, like health care.
Nevertheless, many students remain worried about their job prospects and plan to compensate by casting a wide net.
“I’ve been applying for jobs since the first week of classes, and I visit the CAPS website about 15 times a day to check for interview invitations,” fourth-year Joanna Puchalski said.
Puchalski was initially interested in a career in investment banking, which she now says is “out of the question.” Instead, she is applying for jobs in consulting, wealth management, and is now considering a career in communications and public relations.
Puchalski is not alone, as many of her fellow fourth-years are similarly broadening the scope of their job searches to include consulting options in addition to more traditional finance careers. Gee said that student interest in consulting has been on the rise among students for years, and she expects that trend to continue, considering that many consulting firms have not yet scaled back hiring.
Although CAPS representatives emphasize that there is no need to panic, the job search has become increasingly trying for students who expected a relatively straightforward process.
“It’s very frustrating because originally I believed econ was the way I could get into the business world without much trouble. However, that is completely not the case now,” Scherer said.
Fourth-year Rafi Nuhlman, who also plans to go into consulting, echoed Scherer’s sentiment.
“I know there’s no one thing to do to set you up for an easy life for the rest of your life. But there was a certain promise of hard work today equals a job tomorrow. Maybe that’s not the case today,” he said.
CAPS is “very aware of what’s going on,” Gee said, and is looking for ways to “ease panic.” The CAPS blog has addressed questions about consulting and finance positions, and CAPS will be sponsoring events to encourage networking—a skill that Gee says will be especially important this year. CAPS has also started offering office hours in downtown Chicago and New York City for alumni who face job losses.
Although many remain cautiously optimistic about their prospects, students recognize their vulnerable position in this year’s market.
“My game plan is to get any paying job for the time being, and hopefully the economy will turn around in a few years and my career choices will broaden,” Puchalski said.