Treasurers looking to hire freshly minted B.A.s and M.B.A.s as treasury analysts will find them raring to go and generally better prepared for strategic assignments than in the past. And while young finance graduates are notoriously ambitious and impatient, that assertiveness has been tempered by the economic realities of a deep recession.
"Five or six years ago, an M.B.A. from a top school was a license to mint money," says Robert Whitelaw, chairman of the finance department at New York University's Stern School of Business. "There were lots of jobs and signing bonuses. They were masters of the universe. Now they have a sense of fragility about the economy and their own prospects."
That change has made corporate treasury positions more attractive to new graduates.
"Before the crisis, there was a preference for investment banking, hedge funds and private equity," Whitelaw says. "Now students are more aware of opportunities with companies that make real products. They're sensitive to the tainted reputation of investment banking. There's more cachet today to being in treasury at a manufacturing company."
While the severe recession has tempered young finance pros' impatience to move quickly into executive positions with executive compensation, that attitude is still a factor, says Phil Capodice, a consultant with Treasury Strategies in Chicago. "They want responsibility from day one," he says. "It's sometimes a challenge for employers to find challenging enough work to keep them satisfied."
But Capodice reports that young executives are better prepared these days for strategic assignments.
"University programs increasingly emphasize forward-looking, strategic skills like scenario analysis and market dynamics," he says. "They offer courses in negotiation and group project work. A student can take a concentration now in strategic execution and analysis. It's finance, but with an eye to what creates and destroys value. Some schools teach behavioral finance, which blends finance with psychology." Such courses are not quite mainstream but definitely catching on in academia, Capodice notes. "And it's not just curriculum. The way classes are organized and conducted is changing as well, part of the trend to strategic business thinking."
What's lacking, according to treasury executives and bankers who have hired recent graduates, is skill in data organization and management.
"Treasury departments have to sort and present a lot of complex data. Many young people coming out of academic programs struggle with such tasks today," Capodice says. While M.B.A. programs typically offer a basic course in information management, the training often is not sophisticated or specific enough to meet treasury needs, he notes. Such training may be too nerdy to appeal to ambitious financial aspirants, or it may be that treasury requires data skills that are too specific to be part of academic training, he suggests.
M.B.A. programs are trend-driven and quick to pick up hot topics. Since the economic collapse, risk, leverage and crisis management are hot, so recent grads will be primed in those topics, Whitelaw says. "The crisis marks a turning point," he notes. "It changed how we train and what we teach." The interplay of finance and regulation is also getting plenty of attention, Whitelaw adds.
Expect recent grads to have a sophisticated knowledge of derivatives products and how they integrate with the capital markets, he adds. "They understand how CDOs can affect the cost of capital of companies, how investors will react to bonds or loans that can be pooled and retranched."