Students Survey Options in Thinning Job Market

A year ago, five major independent investment banks dominated the thoughts and efforts of Columbia students aiming to break into the financial sector. Now none remain, a dramatic symptom of the instability students may face after they leave Columbia.

“This is, in a sense, cataclysmic, in that there were five large investment banks one year ago, and now none exist,” said Columbia economics professor Pierre Chiappori.
“Something of this magnitude I’ve never seen.”

Though the long-term trajectory of the American economy may still be uncertain, the ramifications for Columbia students are already becoming clear. At a school known for its success placing graduates on Wall Street—a path that nearly a quarter of graduates go down—this year’s graduates will face a job market wiped clean of familiar companies and even entire sectors. But some experts say that even in the bleak outlook of today, there may be opportunity in finance for students who are willing to seek it out.

The economic reorganization began in March 2008 with the collapse and subsequent sale of Bear Stearns to J.P. Morgan Chase. Since then, Bank of America has bought Merrill Lynch; Goldman Sachs and Morgan Stanley have converted to bank-holding companies in exchange for government protection; and Lehman Brothers has filed for bankruptcy. A commercial bank accepts deposits and makes loans to businesses and consumers whereas an investment bank helps companies and governments raise money by selling securities such as bonds and stocks.

As the investment banks have faded into the past, so have many of the strong connections between Columbia and Wall Street, leaving many undergraduates with dreams of entering the financial market scrambling for other options.

Mike Lee, SEAS ’10 and an operations research major, worries that the economic downturn could lead to a tightening of finance jobs for college students within the next few years. “Not only are we competing with students within our own year, but we’re also competing with these recent graduates,” Lee said.

Interviews with students suggested that the hardest hit are seniors who received offer letters from firms like Bear Stearns, only to have them later rescinded.

Boin Cheong, CC ’10, remembers a career fair she attended in September, when prospects seemed somewhat normal. “There were still all the representatives from all the banks there ... still recruiting,” she said.

At the time of that career fair, the ties between Wall Street and the University, though thinning, remained strong.

A POPULAR PROFESSION

Indeed, the demand for college graduates on Wall Street and enthusiasm from Columbia students has in past years made the financial sector one of the school’s top employers.

The Center for Career Education conducted a survey in 2005 of the graduating students from several Columbia schools including all undergraduates and the Graduate School of Arts and Sciences, School of the Arts, Graduate School of Architecture, and the School of Continuing Education. More students reported that they were seeking work in the finance industry—23 percent—than any other. Education followed with 17 percent. Sixty-four percent of respondents ranked New York City as their ideal job location, and 60 percent landed jobs in the city.

In similar fashion, a quarter of 2006 graduates reported that they were heading into finance, with education and engineering following at 15 percent and 10 percent, respectively. Sixty-one percent sought jobs in the city, and 58 percent got them.
With such a high number of graduates in the field, expectations among each year of graduates rose.

Cheong recalls feeling pressure to select from a limited range of career choices. When she first arrived at Columbia, she had no idea what investment banking was, but after a while, she felt like she either had to go into business consulting or investment banking.

“There was no other third option,” Cheong said.

Against the backdrop of economic turmoil, current students are being forced to consider other industries and locations, often with the encouragement of faculty members and career services.

According to CCE Executive Director Albert Spuler, 1,715 students attended this year’s Fall Career Fair, an 84 percent increase over attendance last year. The rising number of daily walk-in appointments the CCE receives is another indication both of “anxiety” and “renewed vigor in job searching,” Spuler.

“In counseling sessions, we are talking with students about broadening their searches, as well as considering other industries and locations both in and beyond New York City,” Spuler said.

Along with reconsidering their job prospects, many students are also rethinking their majors. “I know a lot of friends in the engineering school who used to be OR [operations research] or financial engineering,” two majors which traditionally lead into finance, Cheong said. They “are considering changing to something else,” she added.

Soulaymane Kachani, a professor in the SEAS industrial engineering and operations research department, said it was “refreshing” to hear students ask about entrepreneurship consulting during the finance boom of the last couple of decades.

Part of the draw of finance has always been staying in New York, Kachani said.
“If you are sitting in New York and seeing all your friends getting these very high-paying Wall Street jobs and living the high life,” he said, “it’s extremely difficult to think about taking a job with a company based in Texas, Pennsylvania, or Michigan.”

Even in the current slump, students might be able to find opportunities in New York finance if they think strategically. According to Chiappori, while some types of financial services like stand-alone investment banking disappear, others might even flourish.

“The kind of expertise they [banks] are going to need are people who have the skills to build risk management schemes,” he said.

“I think there are enormous opportunities, even in the financial sector,” Columbia Business School Dean R. Glenn Hubbard said at a Sept. 25 town hall meeting.

“There is a view that there are wonderful franchise-buying opportunities,” he said, listing a number of alternatives including asset management, financial contracts, and retirement-saving vehicles.

COPING WITH THE CRISIS

To prepare to seek opportunities in a broader range of fields than simply finance, faculty and administrators stress the importance of a well-rounded education and a diverse skill-set.

“If anything, I think, a time of crisis, a time of rapid change emphasizes the kinds of critical skills that the liberal arts education teaches,” said Roosevelt Montás, associate dean for Columbia’s Core Curriculum. “I think one way to name that fundamental skill is judgment—a kind of broad perspective, the ability to make decisions.”

Many faculty members echoed Montás, pointing to the economic crisis as prime evidence of the defects of a technical and overly professionally oriented education, especially for undergraduates.

“This crisis reinforces that it is a liberal arts education that best prepares you to take on the 21st century,” said Kathryn Yatrakis, dean of academic affairs at Columbia College. “It doesn’t really matter which major you are ... because you are coming out with a basic liberal arts degree to think critically, to be able to examine, to synthesize.”

The Business School plans to adopt that approach. The school unveiled its new core curriculum this year with the aim of providing students with a holistic education and career flexibility. At the town hall, Hubbard emphasized the goals of the program, which include refining the ability to pick out opportunities amid uncertain situations and developing oneself as a social leader. Rather than slumping under the credit crisis, business students can learn from it, he said.

“The demand for narrow specialists, people who are extremely sharp on a very narrow topic and can make very sophisticated computations, might decrease a little bit,” Chiappori said. “On the other hand, people who can really see the broad picture and have a general view or a general vision, there might be a demand for those people.”

Chiappori said his “gut feeling is that the undergrads at Columbia are very well-prepared” by their general education curriculum.

But in reviewing their methods and objectives, a few Columbia offices have also realized that expanding services might not be as important as re-evaluating them.

“Our strongest relationships in our career services have been with Wall Street banks,” Kachani admitted. “Now, the Center for Career Education needs to do a better job of reaching out to more companies outside of the financial area and of diversifying away from finance.”

Students say that they are trying to remain hopeful.

Lee said that since a big chunk of the primarily service-oriented U.S. economy is heavily focused in finance, “it will still continue to be a hot field.” He conceded, however, that he’s “keeping his options very open.”

“If nothing works out in New York, I’m going to California,” he said.

Eliot Oh, CC ’10, believes employment opportunities in financial services will be more competitive because there are fewer banks that are hiring less, but “there will be continuing employment and internships.”

“It’s much better that this type of huge business cycle bust happens before you go in because you don’t want to be 40, have two kids, and get high figures, and know that ‘Oh, shit. I’m getting fired.’ There’s going to be a smaller pool for recruiting you,” Oh said.

Some are not so optimistic about the job market.

When reassured by a Boston Consulting Group representative of the stability of the consulting industry, Cheong expressed wariness after weeks of economic instability.

“I don’t know how much of it I actually believe,” he said. “I’d like to believe it’s true.”

david.xia@columbiaspectator.com