Easing Up on the Rat Race

Two major banks decide to no longer offer internships to sophomores for their junior year, a change that institutions say alleviates students' anxiety around entering the field quickly.

November 27, 2018
 

The long-standing advice for students (even in high school) is that they should secure an internship as soon as possible to gain experience in their field.

This makes the move by two top Wall Street investment banks -- Goldman Sachs Group Inc. and JPMorgan Chase -- to postpone their internship recruitment timeline seemingly all the more counterintuitive. But it’s a change institutions are welcoming because they say it will help alleviate student anxiety.

“It put a lot of pressure on students, which just wasn’t great,” said Barbara Hewitt, executive director of career services at University of Pennsylvania, a major feeder for the two banks.

Goldman Sachs and JPMorgan will no longer interview or extend internship offers to college sophomores for certain internships. Even when the companies were interviewing sophomores, they weren't offered the internships until the summer after their junior year anyway, which meant they were agreeing to a position roughly 15 to 16 months in advance. This meant sophomores would sometimes be trying to learn concepts for the internship that might be taught in an upper-level course their junior year, Hewitt said. She said that she’s never known another field to be quite as competitive and have the same sorts of early timetables as the banks.

“A lot of the banks told me they wouldn’t be giving technical interviews, but students would go on interviews, and be asked technical, financial questions, so they needed to prep and learn material they probably were learning the following year,” Hewitt said.

Hewitt said that sophomores tend to work with smaller employers with less structured internship programs that don't tend to recruit as early as some of the larger employers. While the sophomores may be doing some networking right now, they usually land the internships across industries in the spring semester, she said.

As The Wall Street Journal reported, the banks initially started earlier recruitment periods in an attempt to appeal to the contingent of students who had not considered banking careers and diversify their ranks from largely white, affluent men.

But the opposite appeared to happen -- with stiffer competition, students with existing connections to the finance world started to use them to get internships.

Executives from both Goldman Sachs and JPMorgan told the Journal that they acknowledged how disruptive the early timetable was for many students. One representative from JPMorgan said that it felt “felt obligated” to follow the market.

JPMorgan also asked the National Association of Colleges and Employers to recommend that all banks delay recruitment until junior year to create the level playing field, but NACE does not prescribe such time frames -- it only maintains a broad set of ethical principles for employers.

Mimi Collins, a spokeswoman for NACE, said that in the 1990s, the association would recommend that students be given at least two weeks to consider a job offer, but that was changed because it seemed ultimately two prescriptive and wouldn’t fit many industries, Collins said.

Collins said that because NACE does not suggest recruitment timelines for companies, it was not necessarily endorsing the change by the banks, though she did acknowledge that the previous was system was likely “not a good practice.”

“I think what the banks have done reflects the reality that giving at a least a year may not be the wisest use of recruitment efforts,” Collins said. “I think that what they’re doing if you have an experience that’s going to start a whole year later, students are going to change their minds, so it’s being realistic.”

But Stephanie Marken, executive director of education research at Gallup, said in an interview that she was concerned whenever companies choose to delay internships until junior or senior years (Goldman Sachs does still offer internships for the summer after sophomore year).

Having an internship either the first or second year of college can help students decide whether they want to pursue a job in a particular career without them getting too far into a particular major, Marken said.

While first- and second-year students may not developmentally be as prepared to take on the same type of internship at a high-profile investment bank as juniors and seniors are, Marken said that the companies can adjust the experience for the younger students.

“These companies sense great value in internships, and there’s such a great focus on providing them that I think that this customization is possible,” Marken said.

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