by Brian DeChesare Comments (54)

Summer Internship Recruiting: Down, But Not Out

Summer Internship Recruiting: Down, But Not OutSo, do summer interns still get recruited even in the midst of a financial crisis?  Are internship programs being eliminated altogether?  Which offices are actually hiring interns?  Is anyone safe?

I’ve been getting a lot of these questions lately as we move into summer recruiting.

The short answer: most of your fears are overblown, though they are not without merit.

Why?  Well, I hate to sound like a consultant but all comes down to a cost-benefit analysis.

Why Full-Time Recruiting Was/Is Down

This one should be obvious to anyone who has been recruiting over the past year (and just about everyone else).  Things are bad, M&A activity is way down, banks have been failing left and right and many firms – especially bulge brackets – see no need to bring on lots of additional new hires.

Hiring someone full-time is a big risk for most banks because there’s no telling what will happen to the economy in the span of a year.

Just look at 2006 full-time hiring, which saw a record number of new bankers – and then a record number of layoffs 1-2 years later as the credit crunch struck.

Or consider 2002 full-time hiring, when banks hired barely anyone and then scrambled around desperately (and provided huge incentives) in 2003 to find people as deal activity rebounded.

Banks are extremely poor at hedging risk and rarely take the logical approach of hiring a moderate number of people – they tend to use an all-or-nothing strategy instead, which means full-time hiring is even more risky than it should be.

Comparative Costs and Risks of Full-Time vs. Summer Hires

Summer interns incur far less risk than full-timers: there’s no long-term commitment and each intern gets paid a lot less.

At worst, a bank might “waste” 2-3 months of salary on a summer intern.  There’s no bonus, no need to send them to expensive training, and no commitment to anything.

Sure, bonuses may not be what they used to be, but even in a recession they’ll still comprise a good chunk of each junior banker’s base salary.

And don’t underestimate the cost of training: not only in New York (or London for anyone at Barclay’s) over the summer, but also during the first few months when everyone new is ramping up and doesn’t know much yet.

Having a pool of summer interns also gives the bank more options – if they do need more full-timers than anticipated, they could always go back to their summer pool and see who’s still looking for work (of course, this is something HR departments overlook and waste a ton of time/money as a result).

Benefits of Summer Interns

Beyond the lower risk and expenses, summer interns come with many benefits.

In a high-end services industry like banking, having full-time people complete the random tasks that need to get done each week is expensive – from “managing prospects” (updating spreadsheets of who the banker has been talking to lately) to creating profiles of companies to looking up basic information, getting food, coffee and dry cleaning… and the list goes on.

With interns bankers get significant leverage – it’s like they’ve instantly gained an army of assistants.

Interns also keep full-time bankers happy (ok, relatively happy – this is finance, after all) because they provide all this work relief.

Down… But Not Out

As a result, banks almost always do some summer intern recruiting each year, no matter how bad the economy is.  Yes, it was down last year – and it will be down this year as well.

But I doubt that it will be eliminated altogether (as full-time hiring was at many places this fall).

Oh Yeah, That Election

You’ll notice this was a “2008 US election commentary”-free article.

However, I’ve been getting questions on what the results of the US election mean for the financial services industry in the coming years – while I normally stay away from politics, I might just look into my crystal ball next week.  Hopefully this won’t cause half of you to desert the site.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. Dear Inquisitor/Nicole,

    I didn’t manage to land a summer internship this year, my background is 2 placements with a big 4 financial service firm in audit, top in University class and a range of extra-curricular activities.

    Do you think it is the audit background that is limiting me?

    1. M&I - Nicole

      I think banks do prefer people with some sort of deal experience. So in your case, perhaps transferring to TAS within a big 4 will help.

  2. Dear M&I team,
    First of all, thank you for this amazing website!
    I’m currently in my first year of a 2 year master’s in finance and received a summer IBD internship offer at a BB in London. Today I was contacted by HR, who offered me a 3-9 month off cycle internship (SA offer still stands). Which one in your opinion should I take? I would love to work for a longer period, but have heard full-time conversion rates are very, very low for off-cycle interns…

    1. M&I - Nicole

      Yes I think your summer internship experience may be more interesting because you might get to meet more people since there will be the whole summer analyst class there! However you might have more individual “attention” if you take the off cycle internship.

  3. I know not all interns get paid, but if youre a summer analyst in S&T then what would you get paid? and how do they decide WHO gets paid? thanks

    1. M&I - Nicole

      You get paid a base salary. The amt you get paid depends on your firm. No I don’t believe you will be getting a bonus as an intern if this is what you were asking

  4. What kind of work experience, ECs should I try to get involved in that would look good on my resume? Thanks.

  5. Would you consider Indiana’s Kelley School of Business
    “semi-target”? And if I did a finance real estate internship after my sophomore year, would I be too late in the game to get an IB internship?

    1. the internship was done overseas btw.

    2. I know very little about it, but if some banks recruit there then yes. For IB internships junior year matters most, so no, it wouldn’t be too late.

  6. Hey inquisitor…one more question.

    Do you think an internship at a small investment management firm would give me good experience for an internship at the BB firms during my rising senior summer?

    1. Sure, at the very least it’s better than most other options… except for maybe IB/PE/HF but those are tough to get over the summer.

  7. inquisitor

    I am applying for many banking internships this summer through my colleges career service and many ask for cover letters. I have no experience in banking and I had a summer internship at a pathology department last summer. i am a sophomore by the way. What do i need to focus on in the letter? Also many of the banks are smaller banks if that makes a difference.

    1. I wrote an article on cover letters here:

      Emphasize the skills that are transferrable – teamwork, analysis, etc. in the 2nd/3rd paragraphs.

  8. What would you say “target schools” are. Would those include the ones I mentioned above?

    1. Target schools: The Ivy League, Stanford, MIT, Duke, and a few other places like the ones you mentioned above that banks recruit at.

  9. I get a pretty cold impression of the future financial climate, especially with all the doomsday articles floating around. It’s not looking good for undergraduates who will graduate soon.
    If you want to get into IB, PE, or Hedge Fund (BB) jobs after college – do you need to be in a top 5 undergraduate school? (Graduate is a little easier)
    Perhaps this is a topic you should address?
    UPenn-Wharton and NYU-Stern are the obvious top two. There are MIT, Michigan and Berkeley, but already they are iffy. Just past there (such as Emory, U Virginia, Cornell, Georgetown), BB do some small recruiting – but not much. After that it looks like an abyss. The collapses of Lehman and Bear wiped out some of the top recruiters. Now, outside of NYU and Wharton, there is not much recruitment at all, certainly no “safe” zones. The only undergrad. rankings are BW, and they have a tendency to shuffle the rankings around for the “suspense” where there is no room for wiggling. What are your thoughts on this matter? (I am focusing on undergrad. here)

    1. You rarely “need” to do anything in particular, as if you’re persistent enough you can accomplish almost anything.

      I’ve had customers who went to no-name schools get offers at the top banks because they spent tons of time networking and making themselves well-known.

      The main difference is that at target schools you can rely more on recruiting, whereas at non-target ones you will have to spend 10+ hours per week networking and take trips to NYC, etc. to get in.

  10. So I’ve turned to cold calling as a last resort recently and from the several banks I’ve called I keep getting the answer that “we don’t give exploratory interviews” and “apply through our website and we’ll contact you for any opportunities”. Obviously I’m not saying something they want to hear…so how should I approach the remaing firms I’m planning on calling?

    What I told the last 3 was that I’m flying out to NY at the end of Nov and Dec to meet with some folks from UBS and I’d like 15 minutes of your (the recruiter’s) time to drop off my resume and discuss summer internship opportunities…and that’s when I promptly get shut down. I usually mention what school I’m from so I’m not sure whether I should leave that out…heh.

    1. Hard to say without knowing exactly what you’re saying, but you usually shouldn’t mix cold-calling with informational interviews… here is a good script to follow:

      Personally I would not ask to meet when cold-calling – I would just ask about opportunities and then send along my resume.

  11. Curious Monkey

    Hey inquisitor,

    I’ve read many of your posts and you have noted some great groups across the country (UBS LA, MS M&A, Goldman TMT). Would you be able to flush that list out even further? I understand that it may be one man’s humble opinion, but I think it would be very beneficial to understand the prestige/productivity of particular offices rather than looking at the prestige rankings of BBs on the whole.


    1. In general I try to stay away from “ranking” places because:

      1) It changes VERY quickly and the departure of one person can radically change a group.

      2) Where you work specifically has very little bearing on what you do afterwards… most people don’t realize this though.

      3) It encourages people to only aim for 5 groups when in this market they should be taking just about anything that comes their way.

      I’ve mentioned in passing a few things before, but in general this is one of my least favorite topics and something few people benefit from.

  12. While reviewing resumes for candidates from a semi target (UNC Kenan- Flager/ Indiana- Kelley).

    All else equal (ECs etc) who would get a first round: 3.6-3.7 GPA,no-name boutique IB internship after sophomore year or 3.9 GPA, decent finance (say Fortune 500) internship?

    I know it’s hard to predict, but if you are the one reviewing, what would your pick be?

    1. Banking internship any day of the week, unless the GPA were really bad.

      To me there is really not much of a difference between a 3.6-3.7 and 3.9; ok, sure the 3.9 guy put in more effort but it’s not like the difference between a 4.0 and 2.5.

      Banking/PE experience tends to trump all, even if at a smaller place.

  13. Hi inquisitor,

    I’m currently looking into using your resume service, however I was wondering how familiar are you with resumes outside the U.S.? I’m based in the UK and recruiters around here are really big on “skills” and “interests” sections which are a lot different to US resumes.

    Love the site, keep up the good work.

    1. I’ve edited quite a few resumes from the UK over the past year – I’ve also had many customers who have successfully gotten offers and such after I’ve worked with them. You’re right that there are some differences, but from the work I’ve done with previous UK customers, I have a good idea of how to address them.

      Let me know if you have any questions.

  14. A somewhat random and elementary question, but any advice would be appreciated.

    Is a “private real estate investment firm” essentially another name for private equity, real estate?I might have an offer from a boutique firm like this. How much would this help if I’m hoping to obtain a SA position in IBD?

    1. Yes it’s basically the same thing… there is a subtle difference but effectively what you do is the same. It would help quite a bit with SA recruiting.

  15. Yes, it’s going to be a rough ride for a while…but there are some great free ways you can get an edge. I am a student as well and I do get jobs online. You just have to get started with building a professional identity on the web. Since the internet is ‘the medium’ nowadays, you can get a lot of opportunities just by ‘being online’. One free service is which lets you post what position you are looking for as well as get alerts for matching internships and jobs.

    1. This really has nothing to do with finance given what’s on that site and is clearly just an advertisement, but I’m in a good mood today so I’ll overlook it for now…

  16. Dear Inquisitor,
    I have just started my second year of undergrad at UCLA and was wondering what you think my chances are of landing an summer internship this coming recruiting season. My gpa is a measly 3.4 but I’m very far ahead and taking senior level classes. My only work experience is for my father who’s a partner at a real estate firm but really what I do for him is minimal at best. I’m very good at interviews and feel that if I could land an interview I could land an internship. The only problem is that my gpa will not get me noticed. Any advice ?

    1. alumni networking / family friends / other tried-and-true methods for networking.

      3.4 is usually not bad enough to get you rejected from places – your work experience may be more of an issue but as a sophomore its not that big a deal.

      That said I’d still focus heavily on networking at this point.

  17. Anxious Junior

    Unrelated – but…..if I am looking to receive a job offer from a BB bank in Chicago that does their own execution (separate from NY) – how should I evaluate the offer compared to other offers from BB banks in NY and Chicago?

    Thanks Inquisitor

    1. By “own execution” do you mean it’s an M&A group and they don’t do pitching at all?

      In general Chicago is viewed as “worse” to start off in than NY, so if you have comparable offers I’d probably go with NY.

      But personally, in this market I’d be inclined to take almost any offer… especially if it’s at a bulge bracket.

      1. I think there are some decent groups in Chicago, or at least there used to be, who knows who got axed these days. I know Goldman has a big FIG group in Chicago, the head of UBS sits in Chicago (so does their O’Connor arm) though I believe most of the M&A group is in New York, also I think JP Morgan has a decent Chicago presence as well. There’s also some decent billion-dollar middle-market PE shops in Chicago (GTCR, Thoma Bravo, etc.). So, I think there are definently some legit groups based in Chicago, it’s not any worse than say LA of SF.

        I think you would be hard pressed to find a group that only pitched because of not being in NY, in fact I’ve never really heard of this. It would be more a function of how coverage groups functioned bank wide–some firms hand off execution to M&A and Lev. Fin. if they have dedicated product groups, but again that’s more bank specific and could be true even in NY.

        The general perception is that NY is always superior, but that may not be true for certain banks/groups. Conventional wisdom says that you can always move west, but that it’s harder to move east. Personally, while I think this may have been true historically, in the last 10 to 15 years this is not really true anymore. There are plenty of strong regional offices, the most famous of course being any of the ex-DLJ/DBL groups like UBS and CSFB in LA or the ex-Quattrone groups in San Francisco.

        1. The one city that I can think of which is not what it was is Dallas. Dallas always had the “equities in Dallas” perception, but for a while banks had sizeable groups in the city, I think mostly to service the halo from Austin tech corridor during the bubble. After the tech fallout, most banks have significantly reduced, closed up their Dallas shops, or moved the bankers down to Houston. Texas also has fewer PE shops (I can only think of Highland and First Reserve), so it’s not nearly the same as SF/LA/Chicago.

  18. Has S&T SA recruiting been hit more or IBD?

    1. I’m not an expert on S&T but they recruit fewer in the first place… probably about the same hit is my guess.

  19. I think it comes down to IF you can get one of the summer intern spots. I know certain banks are going to campus to maintain their profile, but not looking to actually hire any full-time candidates. Another bank just laid off 1/3 of it’s first year analysts just a few months into their jobs. If you get an intern spot it will likely be easier to get a full-time job somewhere, but it’s likely to be an uphill battle everywhere. Consulting seems to be competitive right now too, I heard that winning bids for interview spots for top 3 consulting were going for 70% of 2nd year MBA students’ aggregate interview points at one top-tier b-school.

    Although many people say it was wise for people to “hide out” in an MBA program for two years while things are bad, I think anyone in school right now is going to have a tough time getting an offer in the next 1-2 years considering that firms hire 9-12 months in advance. I would rather duck and cover through a recession and then go to school in good times and have lots of options to choose from. Your post-MBA role is going to be more important than what you do beforehand. Am I missing something here?

    1. I think that’s accurate – everything has become more competitive, and that includes MBA programs.

      The best option for many people will be to “think outside the box” and go for options like Fulbright and other similar programs which I mentioned before. Or to do something else independently until the market recovers.

  20. Thanks for the advice Inquisitor and Pav.

    I guess I decided pretty late that I wanted to get into finance and I am not helped by the fact that my previous career focus was in marketing but will keep on plugging with the cold calling I guess.

    1. Yup it’s always tough when you decide at the last minute… keep going at it and focus on smaller places.

  21. I’ve commented on this blog before but in response to the questions above about ‘what if I’ve graduated?’. I graduated in June and spent my final year going around the London offices of many banks and asset managers from boutiques to bulge brackets looking for graduate work and would always get turned down in a final round. Most banks culled their usual hire of ‘5 or 6’ from each assessment day (super interview day) down to about 2 or 3. They usually hired the guys who went and did an MBA or MSc in finance rather than the hard-core quant from Physics/Engineering with just a bachelors/basic masters. One bank (an icelandic bank that is no more) decided to even cancel holding a final round all together.
    I applied to a few places for an internship with the intent of taking a Masters in finance. Admittedly my interview technique is now honed down, but I interviewed with one bulge-bracket and got the job straight away for an off-cycle internship. The MDs and executives were all saying that they need interns right now (inferring a lesser need for analysts). There are still a lot of BB’s who still haven’t replied yet either (including some that I got final round interviews with last time), but I guess you just need the one internship offer.

  22. This is slightly off topic but I was wondering if you think that integrating a photo into a CV is likely to make it stand out (not because of one’s looks but because it’s something different) in a positive way?

    1. yikes! No!!

    2. Bad idea unless you want to have your picture and personal contact info. appear on finance news sites and forwarded around to all banks.

  23. Inquisitor,

    I am a sophomore in undergraduate studies, and I have managed to get an internship at a BB for the summer in S&T. However, I would like to try to get an internship for my summer succeeding junior year to be in investment banking. How can I spin my experience in S&T for next year’s interviews to interviewers? Also, for my resume after this summer, what parts of the internship should I be putting into my resume to “bankify” it?

    1. Talk about specific projects you worked on rather than just writing, “Shadowed traders” etc. You need to tell a story about how you want to be advising companies rather than just executing trades and thinking about market movements.

  24. Inquisitor,

    In your experience, are summer analyst and internship roles exclusively for penultimate year graduates? What about someone who has already graduated?

    1. Would be interested in this too. Also do you know what the best way of getting an off-cycle internship is?

      1. Networking/cold-calling

    2. You can try but it’s tough. Easier to do at smaller places that might actually need people and not be getting enough applicants.

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