Goldman Sachs attracted more than a quarter of a million applications from students and graduates for jobs this summer, suggesting fears of a 'brain drain' in the sector may be exaggerated as banks introduce more employee-friendly policies.
The number of applications from students and graduates globally have risen more than 40 per cent since 2012, according to figures provided to the Financial Times. The data can include more than one application per individual.
The numbers show Goldman Sachs is attracting far more would-be bankers than they could ever employ. The trend is mirrored at several other large banks such as JPMorgan, which said it was hiring only 2 per cent of graduate applicants to its investment banking division, and Citigroup, where the proportion of would-be analysts and associates hired in its global investment banking division was 2.7 per cent.
Several — though not all — other banks also say they are seeing higher application levels and improved retention rates despite the battering the industry's reputation has taken for everything from long hours to causing a crisis that inflicted poverty on a generation.
A separate analysis by the Financial Times showed banking has fallen sharply in popularity among MBA graduates from the world's top 10 business schools.
"The idea that suddenly people don't want to go into banking — or if they do go into banking that they stay for a bit and leave immediately — a lot of that has been exaggerated," said Sam Dean, Barclays' co-head of Emea banking who has special responsibility for talent.
The higher number of applications partly reflects the fact that there are fewer investment banks now, after the collapse of Bear Stearns and Lehman Brothers during the financial crisis.
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Recruitment companies also said investment banking was rebounding as a desirable profession partly because of banks' concerted effort to end their workaholic culture, such as introducing more balanced work-life structures. Last week UBS, Credit Suisse and Morgan Stanley said they had introduced more employee-friendly measures, including hours off for personal matters, free Friday nights and sabbaticals.
"They are trying to replicate the Google model," said Bernie Toole, who heads the investment banking unit at recruitment group Selby Jennings. "Before they used to churn analysts, now they are trying to attract and retain them by introducing a more positive culture, with perks and more flexible working practises."
Goldman said it does not have comparable application figures for before the financial crisis and will not provide figures for how many jobs are on offer to graduates and interns, saying only that it hired 9,700 at all levels last year.
Its 2016 applicants include 223,849 undergraduates applying for summer jobs and new analyst positions, as well as 30,542 MBAs looking for summer jobs and new associate positions. Undergraduate applications are up 46 per cent from 2012 while those holding MBAs are up 15 per cent.
JPMorgan said it got 40 per cent more graduate applications for investment banking this year than in 2014, but would not give an absolute figure. Morgan Stanley said its North American investment banking division was now attracting about 8,000 applications a year, up from "6,000 plus" in 2006-07. Those candidates are competing for slightly more than 100 spots, the same number as in 2006-07.
Bank of America Merrill Lynch said it only offered jobs to 3 per cent of its investment banking applicants — and that 90 per cent of those offered jobs accept them.
Deutsche Bank said its investment bank had a 14 per cent increase in intern applications across the globe this year, and hired 9 per cent more interns than a year ago.