Wednesday, September 10, 2008

Finding your first job in finance during credit crunch

I am not sure how you imagine finance, investment banking in particular, but the face of the industry is changing dramatically and will continue to do so for some time to come. For one thing, the current job market is not in the best of its shape. I think career path for some of the roles in the industry will change greatly too. For example, as a result of huge losses in rogue trading scandals and market crashes, trading roles have already become more stressful as banks monitor traders' limit very closely. Huge losses resulting from the credit crunch will make the trading roles even more stressful. Compensation structure will change too (See here for some background). Probably for worse for you, but reflective of the challenges the industry facing.

One of the best ways to position yourself to land your first job in such climate is to understand current state of the industry, background to the credit crunch, implications of the crisis for the economy and more importantly, its implications for the job you are applying. To stay up to date, I usually read,, and; see the sidebar for the links.

Next, network. Basically, you need to be all out. Talk to your friends, talk to your contacts in the industry, talk to your university alumni, talk to recruitment agents, attend career fairs, use online networking platforms. You will probably not be efficient for the first few times, but overtime you will get better and better at it. Networking can be a powerful source to obtain information about various career paths, roles, and the industry in general. It can also help you make valuable contacts in the industry who, if you impress, can refer you to their employers. For online networking platforms I recommend and

Next, show some flexibility. I can understand an ambitious guy wishing to work in M&A or in trading, but there are many different opportunities around that can get you just there. For example, you can work for an audit firm for 3 years and qualify as an ACA or CPA (or whatever the equivalent) and switch into virtually any commercially analytical role, including M&A. Take some time to research and network to find out about various alternative roles that will position you well in the future to get to where you want. You won’t be judged for mistakes you have done in the first 2-3 years of your career in case you feel things went not so great.

Next, target employers. Once you broadly know the type of roles you want to apply for, you need to target the firms. Finding established graduate programs of investment banks, professional service firms, consultancies, law firms and industrial firms are not difficult (you can see for the UK employers and for the US employers), but don’t underestimate smaller firms which do not have structured graduate programs. There are also firms such as hedge funds, independent asset management or research firms, private equity firms which are by definition small and do not have graduate programs as such. On the web you can find various lists of these firms which you can use to define your target group. Sometimes it can be easier to be offered a position with one of these firms due to a relative lack of information about openings. A proven route to these firms is usually through networking as I described above, cold calling or at least by registering with recruitment agents.

Next, work on your story. Hopefully, having spent some time researching the industry and talking to people, you have some idea about what roles suit your strengths and weaknesses. It is important that well before going to interviews you think about your answers to competency based questions. These are usually ‘why this career path?’, ‘why this role?’, background questions (e.g. which subject did you enjoy at University and why?), team questions (e.g. what role do you take in a team environment?), crisis questions (e.g. how would you deal with an underperforming colleague?), etc.

Next, work on your product knowledge. For example, if you are applying for an M&A or similar roles, make an effort to learn about how investment banks add value to M&A needs of corporates and financial sponsors. If you can explain to your interviewer how the M&A industry is currently faring and how it has been impacted by the current crisis, he will be impressed. You would also need to get to grips with tools the M&A analysts use on a day to day basis, such as DCF valuation, comparable transaction multiples (or “comps”), basic understanding of financial statements, etc. For trading and similar roles, your interviewer will probably focus on your basic understanding of equities, equity valuation, bonds, bond pricing, FX forwards, option pricing and so on. It is common for trading interviews to involve brain teasers such as ‘what is 5/16?’, basic probability questions, etc. Check Willmott forum and for plenty of brain teasers; see the sidebar for the links.

Next, work on your recruitment skills. Depending on the role and the firm you are applying for, you may be tested via interviews (phone, face-to-face, panel), competency tests (numerical, verbal, abstract reasoning, mainly), team exercise, presentation, case study, in-tray exercise, trading game and written exercise. What most candidates find hardest is that there are not many ways of practising these skills other than attending a few assessment centres (i.e. testing days). In the past I have arranged ‘Super Saturdays’ where I would invite 4-5 friends seeking job to practise some of these formats. I am inclined to think that this has worked well as all of my friends who attended one of these days got recruited by top firms.

Last but not least, position yourself for growth markets. As it stands, BRIC (Brazil , Russia , India , and China ) countries still seem to be performing reasonably well, with hiring following suite. If there is any way you can show some language skills or at least interest in these countries, then absolutely flag it in your application/CV/Cover letter/interview.

The areas I described above shouldn't necessarily be addressed in the given order, though it is important that you approach them constructively. Unfortunately, very few universities in the world have the necessary resources and prestige to help you get into the cut throat investment banking world (there is still no guarantee that it will get you there!). Most of us have to work extremely hard to get our feet at the doors of these firms. At the time when I was searching for my first job, I felt like doing another masters degree. The good news is, if you persist, you will succeed!


Iqbol Qoraboyev said...

Nice and useful blog. good luck

hihik said...

The timing IS really bad for those who have recently graduated from finance programs and are searching for a job. I am in the market for couple months already and I still don't have a permanent position. I was lucky to get an interesting internship, though. Hopefully it will lead to a full-time hiring.
Almost all the job search techniques were covered in the post, so you just need to master them. Looking for a job in the current state of the market is a pain but don't give up. Be consistent and be persistent. Networking pays of and one way of doing that is contacting your fellow YUP!Net groupmates. There are people in the group who have pursued great careers and achieved excellent results. I contacted several of them and they were very helpful. We discussed there career path, their current job, they would advise me how to proceed with my search, etc. Maybe in his/her next posts the author might want to touch upon how one should approach that kind of communication.
To those in active search I'd recommend reading Its forum is a great source of information on the industry with huge emphasis on getting a job with personal interview experiences, sample questions, company and position info, even resume critique. Lately from the vast choice of jobhunt websites I am favoring I like it because it collects job ads not only from other online job boards but also from corporate websites and as it was mentioned in the post not all vacancy ads make it to the public attention. Fun stuff to read -


botirvoy said...

Thanks for sharing your experience.
Internships are easier to get, and a great way to position yourself for a full time role. When I get a chance, I will blog separately on the value of internships and how to get them.
Good luck in your job search!

Anonymous said...

I agree that it is hard now. I got to the final round with Deutsche but they took only 6 people throughout 6 Assessment Centres and it was not me( although I found the whole process really pleasant and people were very nice. I got an offer from an engineering company for Finance graduate programme, though. I wonder to what extent it is different to do a finance programme not in financial services and what are the career prospects? I heard from some people from the financial sector that work at an enterprise gives a more comprehensive understanding about the business but it is very specific. It would be interesting to know your opinion.

botirvoy said...

Katya, the fact that you reached Assessment Centre with DB means you can get whatever job you want once things improve. Right now focus on your Finance program. Such programs are different compared to the ones in IBD - which is just a reflection of the objective of each role. However, industry experience can get you into i-banking and once you get there, you will pleasantly discover that (as you pointed out) you are better positioned to understand various businesses. The most important thing right now is to focus on your job and pick up the skills. Good luck!

Anonymous said...

Thank you very much.You made my day. Will, definitely, focus on the programme