With the damage done to Wall Street's image following the financial crisis, are the nation’s brightest students eschewing careers in financial services in favor of other industries? That’s one of the questions CME Group Executive Chairman and President Terry Duffy seeks to answer in a Wall Street Journal op-ed this week. He lists some of the numbers — Harvard’s graduates going into Wall Street careers fell from 28 percent in 2008 to 17 percent in 2010. Yale went from 26 percent to 14 percent over the same period. The op-ed also references a story from Marketwatch about high tech firms from Silicon Valley attracting some of the top students who used to seek work on Wall Street. That article quotes a Moody's Analytics projection that high-tech firms will hire 450,000 new workers in the U.S. by the end of 2015, while finance and insurance companies will hire 230,000.
So what can be done? Duffy lists some strengths that financial services can use to recruit some of today's best students:
The industry’s employees have an obligation to show communities and those we recruit from universities the value in what we provide. College students especially merit close attention. Those of us who work in finance should try to show students that the financial-services industry offers meaningful work, with tangible benefits for society, in addition to the possibility of a good career.
Yale Economist Robert Shiller has written a book about the idea that finance can provide societal benefits called Finance and the Good Society. In it, he warns against having a generalized view that all financial services firms bear responsibility for the financial crisis. A review of the book in The Chronicle of Higher Education last year quoted Shiller and explained his view this way:
“I never felt, as did so many, that these problems were a damning indictment of our entire financial system,” he writes. “Imperfect as our financial system is, I still find myself admiring it for what it does, and imagining how much more impressive it can be in the future.” And the best way to make finance more impressive, he argues, is not to restrain innovation or to discourage the invention of new financial instruments, but to encourage further experiments. Such experimentation, he continues, should be tied to a larger goal of making finance more humane, democratic, and inclusive, in support of what he calls the Good Society.
Recent data of Harvard MBA grads – a group traditionally predetermined to head to Wall Street – shows that choosing a financial career is slowly losing out to high-tech and consulting. With data like that,the biggest question seems to be whether the combination of reputational damage and high-paying opportunities elsewhere will be a trend or have lasting effects on the financial industry.
Duffy writes that financial leaders can and should do more to reverse the trend, and that the damage suffered five years ago "can’t be undone simply by waiting for memories to fade and an economic boom to kick in."
Read his full op-ed here.
