Universities across the country are facing budget cuts, hiring freezes, and now, significant declines in on-campus job recruiting by Wall Street firms, as the effects of the financial crisis continue to ripple through the economy.
According to Michael A. Sciola, director of the Career Resource Center, the large investment banks and firms that typically come to campus—such as J.P. Morgan Chase and Goldman Sachs—have radically modified their recruiting practices in response to the financial meltdown.
“We caught wind last January that things were really tightening up with job recruiting,” Sciola said. “So we headed into last summer knowing that there would be less recruiting on campus…but no one could predict what happened next…it got really scary, really fast.”
While the markets began experiencing volatility during the summer months, these events did not deter the Wall Street recruiters scheduled to come to campus in the fall semester—even by August, representatives from investment banks and firms were still set on coming to campus.
However, in September, as the economy began its rapid decline and the prospects for a quick recovery dimmed, these investment banks and firms suspended on-campus job recruiting nationwide.
As Sciola explained, given the economic turmoil, many firms assessed, and ultimately decided to reduce, the number of job openings they intended to offer.
“With the reduction in job availability, many firms see no reason to attract more students through on-campus job recruiting,” Sciola said.
According to Challenger, Gray & Christmas, a national job placement company, financial companies cut over 153,000 jobs in 2007; this year, roughly 130,000 jobs in the financial sector have already been cut. The major players on Wall Street—including J.P. Morgan Chase, Goldman Sachs, Lehman Brothers, and Merrill Lynch—announced layoffs of 1,500 to 5,000 employees per firm between August 2007 and October 2008. For this same period, Citigroup announced layoffs of nearly 20,000 employees.
According to Associate Professor of Economics Wendy Rayack, several seniors have already approached her with concerns about the shrinking job market. While she maintains that a Wesleyan education offers students a competitive advantage in the job market, Rayack also recognizes the financial crisis’ impact on employment opportunities.
“I’m of the belief that Wesleyan students still have a significant advantage in the labor market,” Rayack said. “I’d recommend that people still go along with their plans. At the same time, students should be willing to accept conditions that they wouldn’t have considered in a different economic environment.”
According to Sciola, while the final number of hires for these banks and firms has yet to be determined, the Career Resource Center maintains active contact with alumni on Wall Street.
“Our goal is keeping students’ applications active and getting students hired,” he said. “The traditional path of being hired through the front door, where companies come on campus to recruit you, has been greatly reduced, and is few and far between. However, there are lots of jobs for seniors, especially smart, articulate Wesleyan grads. Students need to start early and be persistent, organized, and leverage the Wesleyan connection.”
Given the fragile economic environment, students are also encouraged to take creative approaches to finding and applying to jobs, particularly those in the financial sector.
“Students should certainly apply to other firms that are out there, ones where they will be better qualified candidates in the applicant pool,” said Associate Professor of Economics Christiaan Hogendorn.
In addition, graduate school and public service are recommended as alternatives to entering the job market upon graduation.
“A tried and true strategy is to go to graduate school,” Hogendorn said. “You can also try to find other types of training experiences—such as the Peace Corps—that will actually contribute to your human capital and may even allow you to defer your student loan payments.”
As Rayack noted, for students interested in graduate school, now is the best time to apply.
“If people have the resources to continue their education in economics or another field, this would certainly be a good time to do that…so as to wait out the downturn,” she said. “Students could also consider doing Teach for America, City Year Program or the Peace Corps. There are also many private, charitable nonprofits in need of assistance.”
Ultimately, students will have to reassess their plans to find a trajectory that best aligns with the current job market.
“As a graduating senior, you can get paralyzed and stressed out, or you can manage your time by putting in five to eight hours a week to reach out to alumni,” Sciola said. “The key to success is being intentional about your career search, not accidental…Go deeper than just the name brands. There are plenty of opportunities out there.”