Master of Finance degrees and the job market

The Cambridge MFin careers report came out a few weeks ago. It showed that for the class of 2011/12, 11% were without jobs as of January 2013, four months after the end of the degree programme. Actually the figure should have been shown as 7%, because two students had jobs that they hadn’t actually told us about. So, out of a class of 45 students, three students were without jobs at the end of January. We know of one of those who has got a job since, so that makes it 4% still looking for work. Sometimes a person is looking for something very specific and is willing to wait until they achieve it. Other times a person is just unlucky – it can take several months to get a job from a standing start and some people don’t start until after the end of the programme, having given priority to study followed by a good holiday.

I obviously would prefer that the number seeking work was zero, as it has been in previous years, but the figures are not bad relative to other degrees worldwide. The one which is most similar to the Cambridge MFin is the London Business School Masters in Finance (MiF). For the class of 2011/12 they reported 81% had jobs four months after the end of the programme, so 19% didn’t. I would expect that number to have fallen each month afterwards, as ours has.

It’s not clear that you can compare these figures directly or even take them at face value. People do masters degrees for all sorts of reasons. Some conclude that they need to take a different direction in life and that means they won’t necessarily be immediately looking for work. Others fix a very specific goal, which is worth taking a long time to achieve. Higher job seeking numbers may reflect more ambitious or thoughtful candidates.

Or low job seeking numbers may reflect a programme only taking the most qualified and easy to hire students. That’s good forĀ  outcome statistics but not helpful to any unusual candidates or those looking to make a difficult but not impossible career transition.

But the general backdrop is clearly that the finance job market is tough and still getting worse in the main western financial centres. It isn’t so great in Hong Kong either at present, partly owing to overcapacity in the securities industry at a time when the mainland China IPO market is shut. But that should be temporary. The malaise in London and New York is more lasting.

Cambridge MFin actions

What can we do on the MFin to respond to this? There isn’t that much but we’re doing the following.

1. We’ve increased the careers-related services each year and it’s hard to think what more could be added now. There are several workshops, covering each aspect of the careers process: assessing yourself and your aptitudes, skills and interests; techniques for assessing the market, working with headhunters, writing CVs and cover letters, networking, negotiating and interviewing; and opportunities to meet industry practitioners, most of them Cambridge alumni, who are sympathetic and helpful. Unfortunately some students still ignore a lot of the advice we give. I heard only today from a recruiter about students writing over-long, unfocused emails, not checking their eligibility for a position and generally giving a weaker impression than they should. But eventually most get the message.

2. Challenge people in interviews to make sure they really want to do the degree. Nobody should take this course thinking that it automatically gives them an easy career path. A Cambridge qualification is great, but in London there are very many, highly qualified people looking for each investment banking job. An excellent academic background is the minimum required to be considered. I would not want anyone to spend the time and money on the degree unless they are sure it’s the right thing for them to do, right now. If in doubt, defer. Increasingly people do defer their offers and many then choose not to take them up. It’s disappointing to see really good, interesting candidates decide to pass, but I completely understand their risk aversion in this difficult market. Equally, anyone who is excessively anxious about careers outcomes and shows signs of hoping for miracles would not receive an offer – it’s too risky for them and for us.

3. Be even more strict on entry criteria. We have not changed any formal criteria since we started the MFin five years ago. But at the margin we now err more on the cautious side, on academic and on English standards (though on the latter Cambridge University has also tightened its rules). I want every candidate to be absolutely sure they are competitive in the job market, even if they still have a lot of work to do to overcome the very tough hiring headwinds. This slightly more stringent policy has led to few outright rejections but it has led to some candidates being given offers conditional on improving their English scores. As for the academic scores, it’s essential to have a good first degree as well as achieve a masters. I know from my own experience that recruiters will look at the candidate’s overall achievement, not just the most recent degree. And since the great majority of people in the City did not do an MBA, they therefore have no idea what a GMAT score is and will look only at the person’s academic grade.

There are one or two straws in the wind suggesting that the investment banking industry is close to reaching a new sustainable capacity level. In modern history the industry has never before had to shed capacity on a significant scale. But even the banks that survive face a much tougher profit outlook, as a recent, excellent report from former colleagues at JPMorgan’s equity research team argued.

And in the majority of the world economy finance remains a growth industry, probably one of the very largest areas of growth opportunity, on the back of rising mass prosperity leading to higher demand for personal loans, credit cards, mortgages, pensions and life insurance. It’s only in the rich countries, now barely half the world economy (at PPP), that finance is a mature sector. And even there growth of some sort will return, when the Eurozone eventually pulls out of recession, as the US already seems to be doing.

I hope that means that in a few years we have a rise in applications matched by an easier job market. But I need to be patient.

Leave a reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

We are using cookies on our website

Are you happy to accept our analytics cookies, which help us learn about our website visitors and their use of this site? Learn how to disable all cookies.