Increasingly, graduates find themselves at the receiving end of company marketing campaigns. Corporate branding ensures that we all know the Big 4, the Top-Tier Consultancies and the Bulge Brackets and have at least toyed with the thought of applying there.
Generally, the bigger the company, the more sophisticated the courting. From entertaining final year students at luxurious dinners (including champagne) to inviting the brightest sparks for a weekend trip to the Swiss mountains, to offering advice for assessment centres to mini-bios about chirpy second year analysts who jet around the world, advise CEOs on how to reshape strategies while enjoying life to the fullest - who wouldn't want to work there?
In all this, the simple and most fundamental business truth is that companies do only devote their time and interest if they expect financial return from it. If they think they can get more from hiring you than the other way round. They expect to sign on a great deal - but will you?
The war for talent
The origins of the luxuries of today's careers fairs have their roots in the nineties: In 1997, McKinsey and Co. published their study "War for Talent" - a guide of how to best stay competitive in the new millennium. The answer: through their employees. The authors go at great length to show that companies' employees will be the most precious asset for the next twenty years.
Companies wanted the superbrights - and their rationale was as follows:
The fact that there are only a limited amount of superbrights available also fulfils a branding function: If companies manage to attract the brightest of the bright they can differentiate themselves from each other in the same way as universities do: as soon as you know that the brightest sparks work for the Blue Chips, you've created a prestigious brand which will source people of the same calibre. Marketing to the brightest people is seen as the best way to carve out a competitive edge for further growth and profit. The result is the salmagundi of career fairs, job presentations and workshops in the top 10 universities.
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To source the brightest of the bright, companies have been on a mission to perpetuate a steady rise in graduate salaries. Take Allen and Overy, they increased the starting salary for trainees from £28,500 to £35,000 within four years. This is part of an overall national trend within the private sector, most notably driven by investment banks, to offer higher financial rewards for students opting for the private sector. According to the HESA's Destinations of Leavers from Higher Education Institutions Longitudinal Survey, overall median graduate salaries increased from £16,000 in 2002 and 2003 to £22,000 in 2006/2007, and it's a fair bet that increases were highest for grads coming from the top rated universities.
What do grads earn now?
There are differences in sector as well as in the skill-set required for the job. Brand strategies, PR and marketing tend to be lowest paid: depending on the type of job, you can expect to earn between £19,000 and £22,000. When you decide to work as an analyst for a boutique TMT, healthcare or energy consultancy, you can expect to earn about £24,000 - £26,000. Top-tier consultancies usually pay more, with packages above the £30,000 range. Best paid are investment bankers and lawyers: median starting salaries for investment bankers and fund managers are £35.500, lawyers can expect to make approximately £35,000 in their first year, which progresses to £65,000 when fully trained. Accountants start on approximately £24,000, progressing to about £46,200 once qualified (according to Robert Half Finance and Accounting).
On top of the base salary, you can expect perks and bonuses. Depending on the company, this may be a pension scheme (95.7% of employers), being able to train for a professional qualification (86.5%), private healthcare (64.4%), free or subsidised sports or leisure facilities (58.2%), sabbaticals or sponsorship (58.2%), shares (39.4%), and depending on the job, a company car (9.6%). Bonuses vary according to the industry, and have been as high as 150% (in 2007) for investment banking - a figure that is unlikely to be reached this year.
Putting a value on money
It is not only about the starting salary but also about progression, trade-offs and reading between the lines at the careers fair. Whilst you may naturally be tempted by the chance to earn more than your parents in your first year of employment, it is really important to do your research and to know what you are getting yourself into. In investment banking and consultancy, for example, while you are paid highest, the hours are also longest. In consultancy, you can expect to work 60 hours a week, in a bulge bracket up to 90 which brings down your hourly salary compared to your peers.
It depends very much on what you want. It is important to understand the sectors: read through how these companies make their money. For example, Accenture is predominantly an IT Consultancy, with their main focus on implementing and improving IT systems. They do have a strategy team, but it is comparably small. When you sign up for the IT roles you will be implementing systems and devising cost-cutting options rather than dreaming up the next best gadget to beat the i-Phone.
There is a similar case for Deloitte and PricewaterhouseCoopers: they are accountancies, making a substantial amount of their profit through valuing companies. They also have a strategy team, but again, it is rather small. When you sign up to be an accountant or advisory role, the truth is that you will stay on in that sector no matter what the strategy team does. You need to decide whether this is something you would actually enjoy, more than whether you like the portfolio of the company.
As far as strategy consulting is concerned, it is a question of lifestyle: do you enjoy travelling every week or every second week? Are you comfortable with the day-to-day work? Consultancy involves an awful lot of number crunching, you will have to sit in front of Excel for a good share of your time, building up the skills which enable you to do the more glamorous work in a couple of years time. You may be lucky and land a high-flying assignment and be able to do more of the exciting work more quickly, but don't be put off if that doesn't happen within the first two years.
A similar thing is true for a career in the Bulge Bracket: you will start at the bottom, doing all the work other people want to do least.
The war for talent - gone wrong?
It remains to be seen whether the financial crisis will have an impact on the philosophy of attracting the brightest of the brightest. For years, investment bankers were recruited from the Harvards and Oxfords around the globe. Instead of taking finance further they have partly annihilated themselves and the industry.
It is too early to say whether McKinsey's war for talent has gone wrong. But it is interesting to see that the brightest sparks of a generation are the generation who will be remembered for their implication in the credit crunch. Time will tell if the if the top firm's strategy of actively recruiting the brightest of the bright will prove successful, ultimately, because the simplest and most fundamental business truth holds true - companies invest, analyse and change their strategies if they expect financial gain from it.