How Elite Firms Hire: The Inside Story
I highly recommend Lauren Rivera’s “Ivies, Extracurriculars, and Exclusion” (Research in Social Stratification and Mobility 2011). Not only is the piece careful, edifying, and interesting; it’s even emotionally affecting. Learning more about elite hiring actually replaced my apathy toward elite firms with sour grapes: “I never wanted to work for you anyway!”
I examined hiring processes in three types of elite professional service firms: investment banks, law firms, and management consulting firms. These types of firms share important similarities, allowing for a robust comparison.
From 2006 to 2008, I conducted 120 interviews with professionals directly involved in undergraduate and graduate hiring decisions in top-tier firms in each of the three industries under study (i.e., 40 per industry). Participants included hiring partners, managing directors, and mid-level employees who conduct interviews and screen resumes as well as human resource managers.
To supplement interviews with behavioral data, I conducted fieldwork within the recruiting department of one elite professional service firm over a period of nine months. My role was that of a participant observer. Given my prior professional experience at a peer firm and in event planning, I was brought on as an unpaid “recruiting intern” to help plan and execute recruitment events… I shadowed recruiters through the recruitment process for full-time and summer associate candidates from a single, elite professional school, debriefed interviewers on job candidates immediately following interviews, and sat in on group deliberations where candidates were discussed and ultimately selected.
1. Most applications practically go straight in the trash.
Because professionals balanced recruitment responsibilities with full-time client work, they often screened resumes while commuting to and from the office and client sites; in trains, planes, and taxis; frequently late at night and over take out… [E]valuators tended to do so very rapidly, typically bypassing cover letters (only about fifteen percent reported even looking at them) and transcripts and reported spending between 10 s to 4 min per resume.
2. Evaluators have a lot of slack.
[M]ost firms did not have a standard resume scoring rubric
that they used to make interview decisions, evaluators reported “going
down the page” from top to bottom, focusing on the pieces of resume
data they personally believed were the most important “signals” of candidate quality. (emphasis mine)
In fact, evaluators explicitly select candidates similar to themselves in school rank, grades, etc. For example:
[R]oughly one-third of evaluators did not use educational prestige as a signal. One of the
primary differences between these two groups was their own educational history, with those who had attended “top” schools being more likely to use educational prestige as a screen than those who had attended other types of selective institutions.
3. Super-elite credentials matter much more than your academic record:
[E]valuators drew strong distinctions between top four universities, schools that I term the super-elite, and other types of selective colleges and universities. So-called “public Ivies” such as University of Michigan and Berkeley were not considered elite or even prestigious…
4. Super-elite schools matter because they’re strong signals, not because they’re better at building human capital:
Evaluators relied so intensely on “school” as a criterion of evaluation not because they believed that the content of elite curricula better prepared students for life in their firms – in fact, evaluators tended to believe that elite and, in particular, super-elite instruction was “too abstract,” “overly theoretical,” or even “useless” compared to the more “practical” and “relevant” training offered at “lesser” institutions…
[I]t was not the content of an elite education that employers valued but rather the perceived rigor of these institutions’ admissions processes. According to this logic,
the more prestigious a school, the higher its “bar” for admission, and thus the “smarter” its student body.
In addition to being an indicator of potential intellectual deficits, the decision to go to a lesser known school (because it was typically perceived by evaluators as a “choice”) was often perceived to be evidence of moral failings, such as faulty judgment or a lack of foresight on the part of a student.
5. At least in this elite sample, I’m totally wrong to think that extracurriculars don’t matter:
[E]valuators believed that the most attractive and enjoyable coworkers and candidates would be those who had strong extracurricular “passions.” They also believed that involvement in activities outside of the classroom was evidence of superior social
skill; they assumed a lack of involvement was a signal of social deficiencies… By contrast, those without significant extracurricular experiences or those who participated in activities that were primarily academically or pre-professionally oriented were perceived to be “boring,” “tools,” “bookworms,” or “nerds” who might turn out to be “corporate drones” if hired.
But they have to be the right kind of extracurriculars. You have to signal that you’re not signaling!
Across the board, they privileged activities that were motivated by “personal” rather than “professional” interest, even when activities were directly related to work within their industry (e.g., investing, consulting, legal clinic clubs) because the latter were believed to serve the instrumental purpose of “looking good” to recruiters and were suspected of being “resume filler” or “padding” rather than evidence of genuine “passion,” “commitment,” and “well-roundedness.”
Don’t imagine, though, that you should merely follow your bliss:
[T]hey differentiated being a varsity college athlete, preferably one that was also a national or Olympic champion, versus playing intramurals; having traveled the globe with a world-renowned orchestra as opposed to playing with a school chamber group; and having reached the summit of Everest or Kilimanjaro versus recreational hiking. The former activities were evidence of “true accomplishment” and dedication, whereas the latter were described as things that “anyone could do.”
6. Grades do matter somewhat, but mostly as a cut-off. They’re a signal of work ethic more than IQ:
[M]ost evaluators did not believe that grades were an indicator of intelligence. Rather, they provided a straightforward and “fair” way to rank candidates, particularly those within a given school… [G]rades were used to measure a candidate’s moral qualities. An attorney (Asian-American, male), believed that grades were an indication of a candidate’s coping skills, “It tells me how they can handle stress; if they’d had their feet to the flames before. If they’ve gotten good grades at a very competitive school, they’re probably pretty sharp and can take care of themselves.”
If labor economists want to understand how real-world labor markets actually work, these are the kinds of pieces they’ll be reading – and eventually writing.
Nov 17 2011 at 11:05pm
I think elite firms need their own version of Moneyball.
Nov 17 2011 at 11:38pm
“I examined hiring processes in three types of elite professional service firms: investment banks, law firms, and management consulting firms. ”
I think its important to remember Bryan that these firms are not typical of high paying private sector jobs. I work for an actuarial consulting firm and our hiring processes are in fact opposite of those mentioned above. our hiring process is a highly structured and monitored affair that places an emphasis on job experience and “non ivy league” elite schools such as Umichigan. The turnover rates for starting i-bankers, management consultants and corp lawyers is in the 80% range. our turnover rates are extremely low. I would also like to mention that the jobs above involve short term interactions with clients that face “very” low barriers to entry. this means that the only way that clients can distinguish between the types is based on their degree. this is why banks like to hire MIT physics PHD’s for risk management. they sound smart and are not nearly as troublesome as a Economics/Finance Phd would be.
Nov 18 2011 at 1:32am
Well I have a fair bit of experience in the world of “super-elite” career paths. I graduated a few years from one of the “top ivys” and have been working as a quant trader at a “top tier” hedge fund since.
First the article is pretty much spot on about schools. What school you came from is everything. If you’re not from Harvard, Stanford, Princeton, Penn, Yale or Columbia, good luck. Even within school your major or subdivision can make a huge difference.
For example a math major at Harvard is much more respected than a math major at Stanford, but an electrical engineering major at Harvard is much less respected than an electrical engineering major at Stanford. At Penn whether you have a Wharton degree is a huge difference. Also what makes a big difference is where you intern at. A student lucky enough to get a prestigious internship can get a dozen other highly prestigious offers for full time.
The reason school is so heavily filtered on is because there’s such crushing demand for the top tier entry level jobs. Even being from the best schools is no guarantee of getting a top tier job. Many of my classmates ended up taking jobs where they have state school co-workers. Students at ivy league schools have nervous breakdowns during on-campus recruiting season.
So why bother even looking at a school like Duke, and potentially getting a dummy, when you can guarantee filling the job with someone from Harvard? Also there’s a sense of why would someone smart enough to get into Harvard choose to go to Duke. It’s not only an intelligence issue, the bright Duke student isn’t perceived to be as ambitious.
As for the extracurriculars, the article has not reflected my personal experience. I think it really has to do with how client-facing the job is. Extracurriculars matter a lot more for investment banking than they do for trading, even though trading is a more prestigious and lucrative career path. Especially trading on the buy-side or quant trading, extracurriculars don’t matter at all. I never even pay attention to that section of candidate’s resume.
Two big omissions from the study: standardized test scores and interview brain teasers. Test scores are really really important. Every job I applied for required candidates to submit their SAT scores. Also GRE/GMAT if taken. Also what helps a lot, especially for quant jobs is placing well in (inter)national math competitions like the AIME or the Putnam.
Finally interview brain teasers are absolutely a huge piece of the puzzle. Your resume will only get you in the door and there for an interview. Usually the way it works is there’s a first round interview on campus. Typically 30-60 minutes. Half of it standard interview stuff, the other half is brain teasers. They could be abstract (some examples):
“Two players are playing tennis, and it’s 40 all. Player A has lost the last server. Player A has a 2/3 chance of winning a serve if he lost the last server, but only a 1/2 chance of winning a serve if he won the last serve. What’s the chance that player A wins the game”
“Estimate the gross tonnage of a 747”
“A frog is standing on top of the a set of N stairs. Every step he can either jump down 1 or 2 stairs. How many possible paths can he take”
Or the interviewer can look at your resume, see what classes you took and where you interned and ask you questions specific to that subject material like:
“How can you dynamically construct a digital American option out of only vanilla European options assuming you have access to any possible strike or expiration?”
“Write an algorithm to find the median value of a linked list in linear time”
“For what class of error distributions is ordinary linear regression the maximum likelihood estimator. Prove it.”
The point of brain teasers is to be just hard/complex enough that the candidate doesn’t know it off the top of his head, but complex enough that he can reason through it in 5-20 minutes. The point isn’t to get the answer right, but to see how the candidate reasons through the problem. Hence why its done orally instead of as a written exam.
After the first round, there’s usually a “super-day.” Either a Friday or Saturday where candidates are flown into the corporate office. They’ll spend the day going from interview to interview of pretty much nothing but brainteasers. They’ll have 6 to 18 interview of 30-60 minutes. At many firms some candidates are sent home halfway through the day, so as not to waste any more time.
Nov 18 2011 at 4:27am
Thanks, most informative.
For non-client jobs, a written test would likely be better than these oral brain teasers, simply because a firm can ask an adequate sample size of questions without burning up the time of expensive executives.
When I showed up in 1982 for an interview at the hot marketing research firm of the 1980s, I spent a half hour talking to a mid-level executive, then he thought I sounded good so he passed me on to the co-founder, a professor of marketing research, for 15 minutes, then he told his secretary to give me the Hiring Exam. This was the professor/co-founder’s Quantitative Methods in Marketing Research 402 final exam. It was a brutal 3 hour exam, but it didn’t take any executives’ time. The people who were hired through it in the early 1980s went on to revolutionize the marketing research industry. Then the EEOC complained that it hadn’t been validated, and the firm dropped it.
In contrast, when McKinsey called me in for an interview, the head of the LA office chatted with me for 15 minutes, then spent ten minutes posing a consulting problem they were currently working on and asked for my advice. I gave the wrong advice and that was it. Personally, I think having the head partner give me a single oral question was too small of a sample size. Judging from my subsequent career where I served as an in-house consultant on whatever was a difficult problem for the company, I would have been a decent McKinsey consultant. If they had a six question written test, I might have gone 5 for 6.
To my surprise, when I Microsoft flew me out to Seattle for a day of interviews, I didn’t get any brain teasers from a company that was then famous for asking them. I mostly got the same inane “What do you expect to be doing in five year questions?” as everywhere else.
Nov 18 2011 at 4:30am
“and having reached the summit of Everest or Kilimanjaro versus recreational hiking”
That’s worth knowing, because Kilimanjaro, the highest peak in Africa at 19,500 feet, is tremendously easier and less dangerous to climb than Everest or most other continental summits other than the wimpy one in Australia. It’s just a long slog, with a little snow at the top.
Nov 18 2011 at 4:31am
“I think elite firms need their own version of Moneyball.”
Nov 18 2011 at 6:23am
I’m sure the hiring process of Economics departments would have its warts, and you are simply to inside to give us that look (being frank burns too many bridges).
Nov 18 2011 at 7:31am
“For non-client jobs, a written test would likely be better than these oral brain teasers, simply because a firm can ask an adequate sample size of questions without burning up the time of expensive executives.”
Yes, I don’t disagree with you. Some firms I know of do give written exams as part of the interview process in fact. (The written exams tend to be more pure in subjective matter, e.g. a programming exam or a pure math exam.) But they definitely aren’t as prominent. In addition to the EEOC reason, I see a couple of other factors at play.
1) (Over)confidence in one’s ability to analyze candidate’s intelligence by conversing with them. The downside to an oral exam is fewer questions, but I think most proponents would counter that it’s made up by gaining more insight into how the candidate reasons through the problem.
You simply don’t get inside someone’s head to the same degree by looking at someone’s written answer (even if they show their work). I think though most people overestimate how good their ability to probe people’s minds are though.
2) Grading an exam is low-status, whereas being an interviewer is high status. As well as being a lot more enjoyable. You get to come up with your own collection of brain teasers, and feel smarter than the candidate’s who don’t get them. The hiring committee listens to the interviewers subjective opinion of how the candidate answered.
This is a lot higher status and makes you feel more important than simply reporting an exam score. Not many people are going to volunteer to grade written exams, whereas lots of people are always jumping at the chance to interview people.
3) The problem of wasting senior executives time can be ameliorated by a multi-stage filter process. As I previously mentioned some firms even send washed out candidates home in the middle of their scheduled interview appointment. Generally the lowest level people handle the early rounds, and as candidates progress they talk to more and more senior people.
When you do 10 or more rounds of interviews the problem of small sample size tends to diminish.
Nov 18 2011 at 7:52am
We’ve only had to hire one employee since I started at my firm and I was involved in the hiring. I helped set up a rubrik and I whittled some 50-100 resumes down to a reasonable number for interviews using it. Ultimately, I put some weight on school or major or grades, but I didn’t think it was insanely important. Too many of our candidates were basically the same in terms of those things so it was hard to account for that. I tended to put some weight on school research projects that I was interested in talking to them about. Before we did the interviews, I got them all to provide a writing sample. Since we do a lot of writing, I ended up putting a massive amount of weight in my final decision on that.
Nov 18 2011 at 8:44am
You probably shouldn’t sour-grapes them based on this. Why should these firms recruit differently? The impact players at law firms are lawyers, not undergraduates, and most of the top earners at banks and consultancies usually didn’t start off as analysts – they come in through the side door after years in “industry.” This is more true in consulting than banking, but it applies to both. Point being that to diligently screen kids from all over the world is a huge increase in overhead with a marginal return at best.
Nov 18 2011 at 9:26am
One man’s signalling is another man’s submission.
Nov 18 2011 at 9:33am
This fits in nicely with another blog post I remember reading. Basically, we’re impressed by people that do things that we can’t imagine ourselves doing, not by people who work hard or show dedication:
Glen S. McGhee
Nov 18 2011 at 9:47am
The better article in that volume is Hal Hansen’s comparison of Germany’s dual system with our own.
Nov 18 2011 at 10:04am
What Doug said.
I went to a super-elite school and have worked exclusively at super-elite firms. I thought it was pretty funny yesterday when Bryan suggested consulting problems were less intellectually fulfilling than the problems he sees in academia.
The one thing I’d add is that a major reason for screening schools (for entry level positions) is simple lack of bandwidth. When hiring for a group of a few hundred people, you might send people to visit five or ten schools. Second-tier schools like Berkeley just don’t make that cut. You pick the handful where you have a decent chance of finding somebody great.
School is less important for referrals and experienced professionals.
Nov 18 2011 at 11:01am
“If labor economists want to understand how real-world labor markets actually work, these are the kinds of pieces they’ll be reading – and eventually writing.”
Some of us are: http://www-personal.umich.edu/~bjhersh/Hershbein_JMP.pdf
Abstract: Recent studies have found a large earnings premium to attending a more selective college, but the mechanisms underlying this premium have received little attention and remain unclear. In order to shed light on this question, I develop a multi-dimensional signaling model relying on college grades and selectivity that rationalizes students’ choices of effort and firms’ wage-setting behavior. The model is then used to produce predictions of how the interaction of the signals should be related to wages. Using five data sets that span the early 1960s through the late 2000s, I show that the data support the predictions of the signaling model, with support growing stronger over time. I also discuss alternative explanations, including dierent types of human capital models; provide robustness checks; and relate the findings to both the returns-to-college-quality and employer learning literatures.
Nov 18 2011 at 11:10am
These sectors are all heavily regulated or created by government. Try looking at top engineering teams managing offshore rigs, or research groups, or high end tech/software groups… You know, people who actually do “work” on “stuff”.
The kind of incestuous ego that says only “elite” schools count is typical of politics. Its who you know and who you can count on to scratch your back, not what you can actually do.
Those brain teasers are pathetic. Totally trivial for any undergrad math major at a decent school. If this is what they’re using to filter candidates, then a large bulk of the applicants must be pretty inept.
I’m finding that a consistent trend among the “highly educated” is extreme denial and cognitive dissonance about self competence. They think they’re smart because its too hard to tell them that they’re not smart. They’ll fight back and say they went to school X and got a 4.0 and did research under Professor Y and scored well on standardized tests and accomplished a bunch of things that sound impressive. But you can never verify the significance of their achievements because you lack the specific knowledge of their endeavors. Even coming out of the same department.
Because of information asymmetry, you can never build a good inductive case that someone is really incompetent. But the lingering suspicion remains…
Nov 18 2011 at 12:36pm
I went to a supposedly elite school, but not one according to Doug’s list or the Chronicle of Higher Education.
Anyway, Doug’s problem:
This was a significant problem in computer science and it took some major brains several years to figure out the answer. Knowing how to select a median in linear time means quicksort no longer has O(n^2) worst case. (Do they still teach kids that canard?) Someone who can figure this out in 5-20 minutes without seeing it before is beyond genius level.
Nov 18 2011 at 1:10pm
> I went to a supposedly elite school, but not one
> according to Doug’s list or the Chronicle of
> Higher Education.
Clearly it depends on what you’re hiring for. Harvard and Princeton are pretty clearly not elite for, say, engineering, but they likely are elite for math.
Similarly, one might ask “What’s an elite firm?” Is Google an elite firm? Is a top-5 consulting firm an elite firm? Can a law firm be elite? Are we just talking about Goldman here?
Nov 18 2011 at 3:49pm
Sorry. Should clarify on that one. Should have had put expected linear time. You are right if you’re not aware of the median of median algorithms you certainly couldn’t recreate it in 5 minutes. However doing quicksort with random pivots is fairly simple.
I agree the definition of elite is fuzzy and it definitely depends based on your chosen field. Also depends from firm to firm. Certain firms get in a hiring pattern of recruiting from a set of schools and pretty much just stick to them, because they know what to expect.
E.g. a number of firms I know do no recruitment at Yale, while some firms heavily recruit from there. Carnegie Mellon is another good example. Some places hire a lot of CMU graduates (particularly computer science), whereas many firms have no recruiting presence there.
Pretty much who you hire one year is going to dictate what schools you prefer to hire from the next year. You build up localized knowledge about schools, like what programs have the brightest students there, what specific classes actually teach, etc. If you’re recruiting from a school you’ve never gone to before you start out at significant disadvantage.
Nov 18 2011 at 5:29pm
Nice post. One theory I hold is that folks hire from elite schools to CYA.
Hire someone from an elite school and they don’t work out, you can just shrug your shoulders and say, “who knew?” and that is acceptable.
Hire from another school and they don’t work out, and your own a is on the line.
Nov 18 2011 at 7:40pm
I suspect the rise of brain teasers in interviews is fairly recent. I first read about it in regard to Microsoft in the mid-1980s and was disappointed when I didn’t get any during a full day of interviewing at Microsoft in 1987. My impression of investment bank interviewing in the early 1980s was they mostly wanted to know how greedy you were. (Best answer: I’d sell my sister into white slavery to be rich.)
In 1986 I began using brain-teasers on people I was interviewing who wanted jobs with me. Looking for a PC technician I made up six questions about how to go about fixing problems (e.g., “My printer won’t print!”). The one guy I interviewed who didn’t have a college degree (he’d gone straight from high school into the Navy’s nuclear sub program) blew everybody else away on answering these questions, so I hired him. A decade later, he was living in a big house on Chicago’s North Shore next to Scottie Pippen.
In the 1990s, I continued to use challenging objective questions in interviews, much to the shock and dismay of my interviewees, who were clearly unfamiliar with the very idea of them.
Nov 19 2011 at 2:13pm
[Comment removed for supplying false email address. Email the firstname.lastname@example.org to request restoring this comment and your comment privileges A valid email address is required to post comments on EconLog and EconTalk. Yes, really. –Econlib Ed.]
Nov 19 2011 at 11:19pm
The “lack of bandwidth” point is important. When I worked for one of the “top 3” consulting firms, I exclusively recruited from my alma mater. Why? Because by increasing the number of people hired from my alma mater, I raised its prestige. As we increased our hiring there, the institution gained prominence both in our firm and among their prospective students, by citing the number of their graduates my firm had hired. It fed a virtuous cycle that benefited me as a degree-holder from that school. And because the firm could find enough high-quality people at basically three schools (Wharton, Harvard, and Columbia), there was no reason to look any further. If you wanted a job at our firm in New York, you needed to go to these schools. I was not about to be the guy saying, “gee, let’s not hire the person from my alma mater and take the chance on the kid from Whatasamatta U.”
Nov 19 2011 at 11:26pm
I guess high school performance matters much, much more than I ever thought it could.
Wouldn’t you think that such specialised people as Olympians would be rather boring? If you spend 6 hours a day swimming laps, you’re not reading the Econ Log.
Nov 19 2011 at 11:31pm
So here’s a follow-up question: why do these recruiters believe that well-roundedness, IQ, and so on, will add (marginally) so much to the bottom line?
Put another way: couldn’t McKinsey hire two Purdue grads for every Harvard JD MBA cum world violinist at much less than half the price?
Nov 19 2011 at 11:41pm
From the abstract:
Is she talking about, like, lacrosse? fencing? rowing? Or does “climbing Kilimanjaro” count as resource-intensive, because you have to get from the US to there and back?
Translation: if your parents aren’t rich and make you an after-school-activity zombie, then even if you get into Harvard, you won’t work at Goldman?
Nov 20 2011 at 12:47am
Interesting stuff – makes me feel quite lucky! I landed an internship at a “top-tier” firm, albeit in another industry, because their regional recruiters decided to try a top-rated professional program at a non-Ivy – and an unusual program at that. Heaven knows if it’ll turn into a job, but it’s heartening to read about the real importance of internships in the comments here.
Nov 20 2011 at 2:25am
Great… So what advice to you guys have for somebody not going to a top tier school for their undergrad, and is looking to get into a top tier investment firm after their MBA.
Should I intern in between undergrad and grad school? I should obviously try to get into a top tier school to get my MBA. Any other tips much appreciated…
Nov 20 2011 at 10:22am
> Great… So what advice to you guys have for
> somebody not going to a top tier school for their
> undergrad, and is looking to get into a top tier
> investment firm after their MBA.
Get a job as an analyst at a consulting firm with a reputation for analytical rigor. They’ll expose you to lots of different problems, they’ll work you hard, and they’ll have the connections to get you into a great b-school. Those firms move a lot of people from places like Bates to places like Harvard.
Make sure you impress people all the way along.
Nov 20 2011 at 4:48pm
Could have just reworded the article as saying, ‘rich white people have access to elite firms and here’s why’
Nov 20 2011 at 5:28pm
It seems the people who are reading this article and posting comments, are the exactly the kind of people I am looking for advice from-those involved in the application process at investment firms. So please excuse my questions. I am not aware of any other way to voice these concerns to such specific individuals.
Thank you for the advice. So I should definitely intern for a few years before business school. I’m a bit worried that getting a job at an consulting firm, even if I would be starting as just an analyst, would be very challenging, especially since I would not be coming from a top tier school.
Any other advice/opinions much appreciated!
Nov 20 2011 at 7:50pm
Find an academic at your school who is affiliated with a consulting firm. Perhaps an economist works as an expert witness and has a firm that does his support?
Work for that guy. Surely he has research assistants? It’s not that hard to get a research job within you own school. Work for free if you have to, but you shouldn’t have to. Express your interest in working for the consulting firm he is affiliated with. Get him to make a phone call for you.
Make sure you are worth the phone call.
Nov 20 2011 at 8:00pm
By the way, these are entry-level positions at the consulting firms, they aren’t internships. Some consulting firms offer internships. That’s a different (but still useful) thing.
One gets an analyst job, works for 2-4 years, and then goes to grad school. It’s not really intended as a permanent position. Do particularly well and they will pay for grad school and offer to bring you back after.
Nov 20 2011 at 8:24pm
I wrote about Rivera’s paper earlier this year. I make the distinction between “hard” (quant hedge funds, google, tech-heavy startups, etc.) and “soft” (consulting, i-banking, law) elite firms, which have different requirements and hiring strategies.
I’m curious what Bryan thinks (thought) about Dale and Krueger in light of this information.
Here’s a useful metric to consider: probability of earned net worth > $(5-10) million by age 40. This rules out almost all doctors and lawyers, but leaves really big winners like startup and finance guys (let’s explicitly leave out sports stars). I suspect that even after controlling for SAT score, attending HYPS and maybe MIT/Caltech increases this probability by a factor of at least several times over attending a public or less elite private school.
Nov 21 2011 at 11:16am
Joe, you’re exactly right. But it is slim pickings for people who want to find work based upon their productivity, as opposed to status, in obamerica.
Nov 21 2011 at 3:05pm
[Comment removed for supplying invalid email address, crude language, and other policy violations. Email the email@example.com to request restoring your comment privileges. A valid email address is required to post comments on EconLog and EconTalk.–Econlib Ed.]
night school @JHU
Nov 21 2011 at 8:58pm
Interesting post, even more interesting discussion.
Agree with the “rich westerners have access to elite firms” conclusions –though I am neither, I am pretty ok clearing six figures with slack working hours at age 27 (at an institution mostly made up of economists, though). I did math at McGill for undergrad, never bothered with iBanking, but got my CFA (which I dont use) and wrote GMAT in 97th percentile (also never used). No connections, family or otherwise, in any of my professional career moves –though I’ve been working through college, since HS (thus a below 3.0 GPA -ghasp!); recently decided to work on a part-time grad degree from Hopkins (NOT SAIS) just for kicks and I am pretty sure I am better off –financially and mentally– than the kids taking on huge loans or wasting their years “building up cv’s” to the detriment of their personal growth. The trust-fund kids not relying on loans are not in my pool of competition anymore.
Interesting point on non-elite grads being viewed as “less ambitious” –the preference towards more ambitious hires smacks of the risk-mismanagement and our current economic troubles. I do clearly project personal competitiveness in my CV and during interviews –ambition can be substantiated with many more useful things than an over-inflated expensive degree. (Kinda like the point about many better peaks to climb than Kilimanjaro)
Clear preferences towards top-school over-educated hires result in frustratingly few colleagues actually capable of doing anything other than network and look good in meetings. I agree with the earlier point that these tend to have huge turnover rates. When you change the focus from STATUS to MEANINGFUL CAREER, the risks of useless elite ‘education’ become more clear.
On interviews: best ones are the ones that assess candidate’s fit within company/team culture; you can teach a monkey how to trade and do matlab, but if you dont build up a relationship of trust, all you’ll have a matlab monkey, as opposed to a real resource. Brainteasers are fun, too– especially the ones that manage to get the candidate outside their comfort zone.
Oh yeah, and I am a Millennial female, so I am supposed to burn out by 30, too –with my over-achieving and all.
[Link modified to direct url rather than through twitter–Econlib Ed.]
Nov 22 2011 at 1:20am
Its sad that this same elite class gave us repeated corporate greed through Goldman, Morgan, Enron, Madoff among others. Brain teasers does not equal getting to XX mil the right way I guess. These types, your types, never create value, or solve problems, help people but merely milk off opportunity created by others when magnified or shrted by market factors. Yes, the milk does taste good. But only when you have a hand in true creationism do you really feel fulfillment.
Nov 22 2011 at 9:40am
[Comment removed pending confirmation of email address and for crude language. Email the firstname.lastname@example.org to request restoring your comment privileges. A valid email address is required to post comments on EconLog and EconTalk.–Econlib Ed.]
Nov 22 2011 at 10:59am
As one who has been on the hiring end at a representative firm of this nature, I think this is generally accurate. The only differnce I see is that at least for my firm, we would not devalue the “public Ivies” at all. In fact, we probably go down one tier below them in our recruiting.
I am not sure that the reasons offered for selection of schools are true and complete. Rather, a big factor is that evaluators have only so much time, and it is not realistic to start every hiring season from square one and consider every possible hire equally. The rationale that the most selective schools have the smartest students is not necesarily what the evaluators all think, but what they say to avoid saying, “I’m only going to put so much time into this because it’s pretty random and here is a cover story for why I make this choice.”
And you go back to the same schools every year partly for that reason. You want a critical mass of people who say “X firm was great to work for.” It creates a pipeline. One class recruits another and spares you having to work from square one every year. If instead you wind up with one or two students from 50 schools, you lose that. It is “organizational capital” in a sense.
And there is a herd mentality because services businesses are hard to compare & no one wants to give their competition a negative angle to tell the potential clients.
I choose personally not to assign much weight to extracurriculars, although I think the median evaluator probably does more than me. There are a few reasons to value them: if someone gets good grades in real subjects while heavily involved in extra-curriculars, it supports a favorable inference about intelligence and efficiency; two, usually extra-curriculars put one in a setting in which teamwork is required and that is a good value in a professional setting. In a competitive world, extroverts are also preferred; I have learned that a B+ student with good personal skills is probably a better hire than a straight A student without them.
Nov 22 2011 at 12:50pm
Sailer suggests that they could devise better tests for “non-client jobs,” but such jobs are of little value to these companies (the other Doug’s discussion of quants is another matter). The salesmen generate the real value at these companies. The potential salesmen do all the non-client work so that they know about the business and while they develop their network and sales ability.
Nov 25 2011 at 11:29am
[Comment removed pending confirmation of email address. Email the email@example.com to request restoring this comment. A valid email address is required to post comments on EconLog and EconTalk.–Econlib Ed.]
Joshua Simeon Narins
Dec 9 2011 at 1:34pm
I’d add one last thing, looks.
I worked at Morgan Stanley and saw the 1st day trainee traders/sales traders one day. Beautiful people. Great skin, light hair, tanned.
I worked on the equities trading floor. A very, very handsome lot. A couple of outliers, who were mostly good looking, but with an odd feature or two. Who wants to work around ugly people, if they don’t have to?
I went to a school few have ever heard of, but I look fairly decent and dress well.
Comments are closed.