Drowning in Numbers

Too many applications and not enough personnel keep finance companies from finding the right (wo)man for the job!

Wall Street is a numbers game, and so is its recruitment process. Investment banks receive tens of thousands of resumes a year, plus a few thousand internal referrals, and have a single-digit committee meant to sift through it all—numbers that add up to a lot of applications being dumped in the trash. But with the economy so tough, finding the right candidates is more vital than ever. Now is the time to restructure the finance hiring process—to allow companies to consider more candidates and evaluate them in a quicker, more meaningful way.

Think about it like this: If job markets were ranked like universities for difficulty of admission, Wall Street would be a super-Ivy. For investment banking internships alone, Bank of America receives 30,000 applications a year and accepts 100, or 0.3%. For the class of 2014, Harvard Business School went through 9,000 applications, of which it accepted 12%. That means it is 40 times more difficult to get an investment banking internship at Bank of America than to get an MBA from Harvard.

The comparison is more than superficial. Top financial firms often do not have the manpower to look beyond candidates from top-tier schools. Based off industry research from Lauren Riviera, an assistant professor at Northwestern, Business Insider claimed, “Elite law firms, investment banks, and consultancy firms are only looking for recruits from the ‘top 5’: Harvard, Yale, Princeton, Stanford, and Wharton.”

Yet plenty of Wall Street alums admit that top employees do not necessarily hold the most prestigious degrees. “I’ve found the greatest success in employees who are from no-name schools,” Eric Chen, now an associate professor of business administration, told The Grindstone. “These kids did whatever it took to be successful. There was no job they wouldn’t do. You would ask them to jump and they would ask how high.” The current recruiting process leaves both employers and hopeful-employees-to-be in a pickle: The best performers are not always top-tier school graduates, but candidates need to graduate from a top-tier school to be allowed the chance to perform.

A component of this problem is that Wall Street has no universal system to evaluate and rank candidates’ skill sets—its only basis for quick judgment is the name of the school attended. But, as Chen’s quote suggests, an impressive diploma does not necessarily equip candidates with the technical proficiency or on-the-ground resourcefulness that investment bankers really need. As a result, company recruiters end up throwing away hours of their time—on top of those thousands of non-top-tier applications—interviewing hopefuls who really know nothing about the job. And they can only hope to weed out those lacking proficiency during the interview process—and not once the candidate is three months into a new job.

The solution? In today’s economy, every company is making cuts, so increasing the size of HR groups isn’t a likely—or efficient—answer. So let’s return to a proven method in a different industry: the university model. How do college admissions offices handle the applicant deluge? They use standardized test scores to narrow the field of qualified candidates. Perhaps the banking world could employ the same tactic.

Allen Grove, About.com’s college admissions guru, underscores the importance of SAT/ACT scores: “As much as admissions officers say they take an open-minded and holistic approach to their decisions, SAT scores can make or break an application. And let’s face it—it’s easier to compare numerical data than it is to decide whether a semester in France should be ranked higher than a state soccer championship.” When it’s a numbers game—as both the job and college admissions processes inevitably are—standardized tests provide the easiest way to rank candidates and assess how they might continue to perform.