The Investment Banking Recruiting Cycle
The investment banking recruiting cycle differs by bank but generally happens at the same time every year. The recruiting season also differs greatly depending on whether you are a new hire or a lateral hire. The best way to understand when to start recruiting is to understand when new hires and laterals are on-boarded.
Campus Recruiting Process for New Hires:
Full-time first year Analysts and Associates typically start their career in August and go through a two month training program learning the basics of financial modeling, financial statements, PowerPoint and Excel.
Summer Interns (both undergrad and MBA) are typically on-boarded during June for a 10-12 week internship program. During the last week of the summer internship program the banks will hand out full-time offers. Generally, banks fill a majority (80-90%) of their full-time positions with their summer interns. Even if you don’t want to return to the bank you “summered” at, it is better to receive an offer than not. If you don’t receive a summer offer, it is possible to get a full-time offer at another firm but be prepared to explain what happened (ie why you didn’t get an offer) and go down in brand.
Full-Time recruiting:
Full-time recruiting season generally kicks off in August-Sept for both undergraduates and graduate students. Full time interviewing differs by school. Check with your campus career center often as schedules change and get updated almost daily.
Summer Internships:
Generally Jan-Feb kicks off summer internship interviews for undergraduates and graduate students. Several banks will host informational events and invitational cocktail parties prior to conducting interviews. These events are typically held in the early fall (some even happen the first week of school). These networking events are crucial as they help determine who will be on the bank’s on-campus interview list. I strongly recommend NOT waiting until these events to meet people since they are often like a cattle-call and can be tricky to navigate.
Off-Cycle Recruiting Hires:
Any hiring that takes place outside of the normal on-campus recruiting process is called off cycle or lateral hiring. Most banks hire the majority of new analysts and associates through a regular annual recruiting schedule, but occasionally have the need to staff up outside that schedule, which is where off-cycle hiring comes in.
What can you do if you miss the regular hiring process on campus?
If you miss the regular process, don’t freak out, as banks do post positions to hire off cycle when they need to staff up and can’t wait for the next batch of graduate hires to join.
Here are some ideas on what to do if you miss the regular hiring process and are in your final year of school:
- Target smaller/boutique firms – Smaller boutiques and middle market investment banks usually have a less structured interview process in terms of guidelines and dates. Boutiques in particular will usually hire on a need basis, so interviewing at these firms can happen all year around.
- Network like a rockstar – Start with analysts who went to your school and move on from there. Shoot over a quick note on Linkedin. Worst case is that they don’t respond. Move on. Who cares. Since off-cycle positions that come open are often required on demand, they have shorter recruiting periods and, therefore, already being on people’s radar screens is important.
- Monitor job postings – One tip is to setup a Google Alert for some very specific criteria that trigger an alert when a company posts an analyst/associate job position.
Recruiting for Lateral Hires:
The lateral recruiting season is very different than on-campus recruiting and is largely dependent on when bonus’ are paid. Most banks have a FYE (fiscal year end) of December 31 and pay bonus’ between Jan-March of the following year. Canadian banks and Japanese banks are the exception as they have a FYE of March 31 and their bonus’ are paid the following June. Many experienced bankers looking to make a move will start recruiting in January with the hope of jumping to another platform right after their bonus clears. When you sign-on as a new analyst or associate you typically do not pay attention to the bells and whistles in your contract. You are also NOT able to negotiate. Several banks have bonus claw-backs and “gardening leaves” embedded in their agreements. Some gardening leaves are as long as 6-months and I have seen clawbacks on bonus’ in the 6-figure range. These contractual clauses make it more difficult for experienced bankers to move.
Another issue that plagues experienced bankers is the bonus. If you start much later than Memorial Day you may not be guaranteed a full-year bonus. In a regular recruiting market, lateral hires can expect a prorated bonus. If the hiring bank really wants you, they may offer you a sign-on bonus. In a super-hot recruiting market banks will often offer a sign-on and a guaranteed bonus.
It is important to note that super-hot recruiting markets typically only last for short bursts ie a couple of months. Two factors affect recruiting. First, banks will become more and more reluctant to assure “full year” bonus as start dates get pushed back and gardening leave takes effect. The other reason recruiting may cool in the summer is because a fresh crop of new analysts and associates are starting and they need to train them to become effective.
Net, net recruiting typically slows down after Memorial Day and comes to a grinding halt in August, starts up again in September and October and then shuts down again for the holiday/bonus season.
