How Harvard students are channeled into finance & consulting
Amy Binder has a really interesting new piece in the Washington Monthly on why so many grads of Harvard and Stanford go work for McKinsey or Goldman when they finish. Surprise (well, not really) — it’s organizational.
Based on research she conducted with UCSD grad students Nick Bloom and Daniel Davis, she argues that elite schools have created a “structured pathway that leads straight to them.” In the 80s, banks and consulting firms realized that being able to advertise teams of Ivy League grads was valuable. In her words:
To get to those kids, the nation’s top banks and consulting firms began by competing with each other to become “platinum” members of the career services programs run by the most elite schools. Winners of this pay-for-play competition get the best tables at campus career fairs, access to students’ email in-boxes, entrée to the most impressive banquet rooms for holding information sessions and receptions, bundled delivery of applicants’ résumés, and space and scheduled times to hold one-on-one interviews, among other goods and services known as “recruitment.”
As these careers became the most central and visible on campus, student culture became more and more heavily organized around the search for these kinds of jobs. They’re seen as the high-status thing to do in very competitive campus environments.
What’s ironic is that it’s not so much about the money. It’s partly about status, but it’s also about a clear pathway at a time of uncertainty. Harvard students don’t go to college dreaming of becoming investment bankers. Okay, a few do, but this–all from students who took the finance/consulting track — is more typical:
Most students come to campus with vague plans about their professional lives, along the lines of a Harvard alum named Kevin, who said he planned to “study philosophy and go to law school and have a nice life,” or Olivia, who had chosen Stanford because she dreamed of launching a start-up. Another junior at Harvard laughingly recalled that he “thought careers in finance were like being a bank teller, being an accountant, or something.”
But they have to pick something. And the schools make it easy. From one student:
I guess a good job means consulting or finance because, well, look, that’s what the Office of Career Services has. When I talk to my peers, that’s what my peers are talking about. For someone like me who had very limited professional experience, who didn’t really have any baseline for what one could do, it was like, hey, I just see that these are the things that people from Harvard go do.
Ultimately, Binder’s argument is that the schools bear some responsibility for how large this track has become — 31% of Harvard grads take jobs on this track. Some articles have suggested there’s been a downturn in the numbers in the last five years, but even if that’s the case, it’s still a large fraction.
Harvard and its ilk don’t really need the money from career services booths, though they may like the promise of high-earning alums. But they are doing their students, and the rest of us, a disservice by making these paths so easy to fall into. Sure, there are students who have a passion for finance, and that’s probably where they should be. But for the rest of them, a little more encouragement to explore the road less traveled could be a very good thing.