Harvard MBAs give up on Wall Street

Ruined weekends, PowerPoint drudgery and overnight shifts in Manhattan skyscrapers once were a point of pride for the Harvard Business School graduates who went to Wall Street.

Now young stars hold heads high about how lucrative and healthy their lives will be -- elsewhere. “People used to brag and say, `Oh yeah, 21-hour days, seven days a week for eight months,’ that was a badge of honor,” said Kiran Gandhi, who like others in this year’s class applied to technology companies. “The humble brag is now, `Oh yeah, I work 9 to 5, I get paid a ton of money, and I have a great life.”

The allure of Silicon Valley, where hip startups are minting billionaires, is eclipsing that of staid investment banks under pressure to cut risks and costs. This year, a long slide in the number of Harvard MBAs joining banks may hit a new low, even after many of the biggest firms adopted policies to become more hospitable to new recruits.

In 2007, about 13 per cent of the school’s graduates who landed jobs went into investment banking or trading, according to Harvard’s reports. By last year, that fell to about 5 per cent. Now a preliminary survey of this year’s grads shows only 4 per cent intended to join a bank after getting degrees in May.

Among the class’s 46 Baker Scholars -- a designation Harvard grants the top 5 per cent of MBAs -- only one expressed interest. Those are the findings of Keima Ueno, who got his MBA from Harvard this year.

As a student, he served as a peer mentor and wrote a blog on what life is like at the school. So when Harvard sent his class data from a pre-commencement survey, he used it to figure out where the Baker Scholars wanted to go. He wasn’t surprised by the results.

“When we hear that our classmates managed to acquire a position with an investment bank, we say `Congratulations,’’’ he said. “But we are thinking, `I’m sorry to hear that.’’’ Ueno spent three years in Morgan Stanley’s investment bank before returning to school to earn his MBA. Now he’s in Japan, running his family’s health-care business and a startup internet retailer.

Technology companies have been luring more top graduates with the promise that they’ll not just make gobs of money, but also have a happier life, even if the hours are still long, according to students and recruiters. Last year, about 17 per cent of Harvard’s business school graduates poured into the industry, up from 7 pe rcent in 2007, its figures show.

Banks lost more recruits than any other sector. And average pay at investment banks has shriveled since the financial crisis because of a drop in revenue and a greater focus by regulators and shareholders on bonuses. Goldman Sachs per-employee compensation expense fell to $373,265 last year from $661,490 in 2007.

The tech boom is luring away entrepreneurs seeking to strike it even richer -- à la Harvard College dropout Mark Zuckerberg. While Harvard alumni Jamie Dimon, 59, and Lloyd Blankfein, 60, have amassed fortunes in their decades at Wall Street's biggest banks, such opportunities have diminished following 2008's financial crisis and pale to the quick riches possible in Silicon Valley.

Dimon, a Baker Scholar, and Blankfein, who earned degrees at Harvard College and Harvard Law School,  are each worth about $1.1 billion, according to the Bloomberg Billionaires index. Zuckerberg, the 31-year-old who built Facebook Inc., is worth about $41.2 billion.

At Harvard, it can’t help that the pressure on junior bankers has become fodder for coursework, where students are briefed on real-life corporate dilemmas and debate strategies. “There are several case studies dealing with investment banks wherein students discuss the brutal work environment and incredibly out-of-whack work-life balance,’’ Ueno wrote in an e- mail. “The banks’ efforts -- their success or lack thereof -- to bring about change have not been discussed, but what is consistently highlighted is the dark side of investment banks.’’

Bloomberg