ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, December 29, 1996 TAG: 9612310012
SECTION: BUSINESS PAGE: 1 EDITION: METRO
COLUMN: Banking
SOURCE: MAG POFF
A decade or so ago, landing a job at the bank - any bank - was the springboard to a long, stable and successful career in business.
That's no longer true, especially in an era of mega-mergers, layoffs and stiff competition among a variety of institutions offering financial services. At least that's the conclusion among recent winners of master's degrees in business administration from the nation's top graduate schools.
A study conducted by Duke University's Fuqua School of Business found that only 1 percent of 584 MBA respondents at 11 top business programs had accepted jobs with commercial banks.
Nearly one third of them, or 31 percent of last year's class, accepted positions with management consulting firms, the single most popular job choice, the Durham, N.C., university found.
Marketing, investment banking and finance also were popular job areas, attracting 16 percent, 14 percent and 13 percent respectively.
Investment banks differ markedly from more common commercial banks. Investment banks, located primarily in the nation's major markets, underwrite securities. Their customers are corporations that issue stocks and bonds, which they then distribute to investors.
Why would so many business specialists with graduate degrees turn their backs on banking?
The reason, said one banker, is neither the recent wave of mergers nor simply trendiness.
Jim Hatch, senior vice president and corporate controller for First Union Corp. in Charlotte, N.C., said the cause is more basic.
It's money.
Hatch, a native of Lynchburg and holder of an MBA degree from Virginia Tech, said a graduate business degree can command a starting salary of $50,000 to $60,000, "a difficult reach for many banks."
People with an undergraduate degree in business can be hired for $30,000 to $35,000, he explained, and the advanced degree isn't worth that much more to a bank. "Compensation is an issue," Hatch said.
First Union looks for sets of special skills rather than a graduate degree, according to Hatch. That might be expertise in accounting, computer science, economics or risk management.
Banks today need people who can qualify for licensing to sell mutual funds. Hatch said the banks look for college graduates who can sell a wide variety of financial products.
But Hatch said the situation might change soon. If so, the MBAs should follow the jobs.
"There is clearly opportunity," he said, especially in capital markets, a field that First Union entered a year or so ago. This involves financing of business deals through innovative methods, such as matching high-powered investors with growing businesses.
Another promising field is capital management, which covers mutual funds, trust services, brokerage and insurance.
First Union has been able to recruit MBAs from investment banks on Wall Street to handle these products, Hatch said. Those fields may soon attract recent graduates.
The Duke survey found that the MBAs started work at an average salary of $69,387, up more than $7,000 from the 1994 figure, the last time the biennial survey was conducted.
Plus, 80 percent of the graduate students received additional compensation in the form of signing bonuses, averaging $13,493. That's a total average first-year package of $82,880.
The graduates averaged more than two job offers each.
Of those with multiple offers, 46 percent selected the position with the highest first-year compensation package for salary, bonus and relocation costs.
For the majority, however, job responsibilities, long-term career opportunities and company culture outweighed the money.
Female MBA graduates experienced a far greater net income gain from their degrees than did their male counterparts.
Before entering an MBA program, the women surveyed earned a mean annual salary of $40,254 compared with $48,860 for men, a difference of 21 percent. Starting salaries for the MBA class of 1996 were equal for men and women.
Fourteen percent took jobs in New York City, but Duke found that increasing numbers headed to Chicago and Washington.
They really want to go to San Francisco, however. More than 22 percent of the MBA class of 1992 hope eventually to live and work there, the survey found.
The most-admired company among these graduates was Microsoft Corp.
Another high-tech company, Hewlett Packard, stood in second place, followed by Coca-Cola Co., General Electric Co. (number two in the 1994 survey), Walt Disney Co., Proctor & Gamble Co. and Nike.
Tobacco producers were the least-admired industry. Ninety-one percent of the MBA students said they would refuse to work for a tobacco company for ethical reasons.
LENGTH: Medium: 91 linesby CNB