Morning Coffee: 27-year-old students chasing $175k salaries given $20k to do nothing. Kim Kardashian is only interested in one kind of banker
If you suggested to most young consultants at Bain or McKinsey & Co. that they should take up a painting class or become a yoga instructor, they would probably either think that you had gone mad or that you were in the middle of a particularly unrealistic pitch for a corporate wellness app. Management consulting is right up there with banking and law for crazy work hours. And yet, this is literally the advice being given to MBA students with consulting job offers; the consulting firms don’t necessarily have enough work for all of them, so some of Bain’s start dates are being pushed back as far as April 2024. McKinsey is also delaying start dates, with many of its candidates still not having been given anything more than a promise that they have a job and will find out when they start with at least two months’ notice.
This is pretty obviously a way to manage the business cycle; the consultancy firms are offering substantially less than the normal $175k basic consultant salary for the period of the delay, and they’re effectively buying themselves an option on the size of next year’s recruiting class. There’s also potentially a bit more optionality on the part of the employers; although the firms say that they’re “committed” to ensuring that everyone with an offer letter will get a job, the legal position isn’t clear. Bain is apparently offering $40k to candidates who spend the delay period working at a nonprofit, $30k to those who learn a new language and $20k if you want to follow a personal passion product (yoga/painting). Although the company is presumably making all these offers in good faith, it might be considered a bit of a risk to take the low-priced passion option.
Whatever happens, this can’t be seen as anything other than bad news for would-be bankers at business school. As well as potentially indicating a smaller target recruitment next year, this is quite likely to persuade high-achieving MBAs who might otherwise have had their hearts set on McKinsey that they ought to try and interview for a few Wall Street jobs too. When you also take account of the fact that fewer classmates will also head off to Silicon Valley, it looks like the next investment banking recruiting round might have got considerably more competitive.
And that’s without even considering the possibility that the bulge bracket banks might also be scaling back their own MBA recruitment programs if the market turns up, or that the associate class itself might not be quite so thinned out by private equity offers next year. With more top business school graduates chasing fewer opportunities, we might even see more of that comparatively rare occurrence – a Harvard MBA going into manufacturing industry.
Elsewhere, you might have thought that there would be an endless line of finance bros and Litquidity readers, lining up to join Kim Kardashian’s private equity firm. However, Litney Partners might not be getting many of the mandates for this particular client, and nor may the “Anti-Woke Job Board For Christian Nationalists” that Donald Trump Jr is apparently setting up. Out of eight employees of SKKY Partners who have LinkedIn profiles, five are women. According to the WSJ, there are also “two employees who identify as LGBTQ” out of a total of twelve.
So it looks like this is going to be one of the few firms in the private equity and venture capital industry that won’t have a problem hitting diversity targets. It also suggests that if you’re interviewing there, it might be a better idea to play up your interests in the firm’s target sectors of fashion and consumer goods, and talk as little as possible about any passion for lacrosse or cryptocurrency. (Talking about crypto is to be particularly avoided as it might be a bit of a sore point given that the cofounder was fined by the SEC for not disclosing a payment for promoting one).
Meanwhile …
Bank of America cut more than 1,000 positions in the first two weeks of April and plans to eliminate an additional 3,000 jobs by the end of the quarter. (Financial Times)
A downturn for the industry overall can be an opportunity for specialist players and ambitious national champions (and for bankers who are open-minded enough to go and work for them). It’s not clear which of these categories Unicredit might fit into under Andrea Orcel, but its head of ECM, Silvia Viviano, is hiring and wants to “lead deals rather than just get bookrunner roles” (Bloomberg)
“Don’t kick somebody when they’re on the ground” isn’t a saying you’ll see on the wall in many law firms. A rash of new legal claims seem to be growing up around Credit Suisse in its last days, presumably in the hope that UBS will prefer to settle them and move on. Everything from mortgage backed securities to Nazis in Argentina seems to be an opportunity for litigation. (Financial News, New York Times)
Satvinder Singh, a Deutsche and Citi veteran and official “Global Custody Legend” (he won a lifetime achievement award from the trade magazine of that name) is going to be the new head of data & analytics at the LSE Group (TheTrade)
Are bosses opposed to working for home simply because they think it’s for sissies? Could it be as simple and dumb as that? Professor Joan Williams thinks it might – CEOs are “men with very traditional views” who see the office as a male space and “the home as their wife’s domain”. (Business Insider)
“Careers are defined in times of crisis” according to Mark Mason, CFO of Citigroup. In his case, this seems to mean that you should cancel a holiday when the CEO needs you, and be prepared to take on a grueling role managing a “bad bank” without sounding too negative about it. (Fortune)
The new class of graduates entering the workforce aren’t particularly fussed about remote working, but the most important benefit for them is coverage for therapy. (WSJ)
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