Education

Grads with a golden touch

A commerce degree is a ticket to the big leagues—on both sides of the border

John Schofield May 10 1999
Education

Grads with a golden touch

A commerce degree is a ticket to the big leagues—on both sides of the border

John Schofield May 10 1999

Grads with a golden touch

A commerce degree is a ticket to the big leagues—on both sides of the border

Education

Cover

BUSINESS

He is a master of the universe in the making, a crown prince of capitalism. And for two delicious months last fall, North America’s most prestigious consulting and investment banking concerns were tripping over themselves trying to hire Paul Farr, a 21-year-old Montrealer graduating this spring with a bachelor of commerce from McGill University. The wooing was shameless: plush hotels, theatre tickets and tête-à-têtes with top executives over gourmet cuisine. For one so-called sell weekend, Bain and Co., a première strategy consulting firm, flew Farr and a select group of candidates to its Boston base, put them up at the Four Seasons, and whisked them around in a stretch limo. In the end, Farr opted for a $75,000-a-year job on Wall Street with high-powered investment banker Goldman Sachs, plus a $7,500 signing bonus. It was heady stuff for an undergraduate who ran a pool-cleaning business during his school years. “When I started recruiting, I couldn’t believe all the people I was competing against,” recalls Farr, who boasted a 3.9 grade point average. “But once you got the offers, you could play hardball.”

And why not, when you own one of the hottest tickets in

todays job market? The demand for those with bachelor degrees in commerce is brisk, and competition for top grads is downright fierce. In an increasingly global market for mind power, corporate recruiters are going all out to attract the best and the brightest, and Canadian firms are finding it harder to compete. This year, starting salaries for business undergraduates joining Canadian investment banking houses or strategy consulting firms are rising as high as $72,000, and signing bonuses are standard, averaging $5,000 for undergrads.

Some major firms confine their search to only a handful of schools. Heavy hitters in consulting and investment banking—Bain, Goldman Sachs, McKinsey & Co. and others— limit their campus visits to the University of Western Ontario, Queens University, McGill, the University of Toronto and, in some cases, the University of Calgary. Cost is pardy to blame. Yellowbrick Consulting, a San Francisco-based firm that has helped such companies as J. P. Morgan, Bank of Montreal and Nortel improve their on-campus recruiting, estimates that corporations spend between $30,000 and $100,000 to lure each candidate. “Its a fairly significant investment,” says David Tait, a principal in the Toronto office of A. T. Kearney Inc., a leading management consulting firm based in Chicago. “That’s why we’ve been selective.” And as Larry Tapp, dean at Western’s Richard Ivey school of business, warns: “It’s not the human resources departments doing this. If you want the best grads, you send your A-team.”

Where the A-teams go, the money often follows. Last year, those with an honours business administration degree from Ivey earned an average starting salary of $42,000, compared

with $32,000 for Calgary’s bachelor of commerce graduates. “There are guys from other universities who work at the top firms,” says Jason Bouvier, a Calgary grad who fielded three offers from Canadian banks last year, deciding on an analyst’s position with TD Securities. “But they’ve got to really work at it to get in.”

Academic leaders in the West and Atlantic Canada say recruiters risk missing top talent if they stick to Central Canada. Regional employers already know they have a good thing going. More than two-thirds of the business grads at the

University of Calgary are hired locally, many in the vibrant oil and gas industry. Saint Mary’s University in Halifax feeds a variety of local companies, including the region’s burgeoning offshore natural gas sector. Colin Dodds, vice-president academic at Saint Mary’s, says narrow recruiting reflects the business elite’s bias. “There is an ignorance of what is available here,” he says. “I find it a little incestuous.”

Some schools are fighting back. Concordia University in Montreal is aggressively encouraging companies to scout its talent. Last fall, 79 firms showed up during recruiting season, compared with 41 in 1997. “Students want to see companies on campus,” says Jerry Tomberlin, associate dean for external affairs in Concordia’s commerce and administration faculty.

Business schools are going to great lengths to groom students as well. Counsellors offer regular seminars and workshops on job-hunting skills, along with individual coaching on covering letters, résumés and interviewing techniques. Earlier this year, Saint Mary’s became the first business school in Canada to contract out a corporate headhunter to help MBA students find the best jobs. Western’s Ivey school has developed its own career development program called In Focus, which will be sold to the public in book form beginning this summer. The program advises job-hunters to market themselves like a product, starting with an analysis of their strengths, weaknesses and goals.

The recruiting game is cleverly calculated to flush out candidates with the elusive right stuff. Good marks are a given, but the best companies want personality, too. Take investment bankers: 60to 100-hour work weeks are typical, and new recruits have to be team players. That calls for first-class communications skills. Add to the list creativity, initiative and proven leadership ability. Ultimately, only a select few are blessed with multiple offers. Making the choice is an extremely personal de-

cision, says Ian Purdell-Lewis, a Western MBA who turned down four offers last fall in favour of Nortel’s two-year leadership development program. “It comes down to the best overall fit,” says the 30year-old from Dundas, Ont. “You have to decide what you really want.”

For many, the predicament is whether to stay in Canada. At Ivey, about eight per cent of undergrads will go to the States this year, compared with three per cent five years ago. Some Canadian recruiters feel they are fighting a losing batde. “We try to sell Toronto as a great city to live in,”

says Gemma Miranda, director of recruiting at Scotia Capital Markets, Scotiabank’s investment banking arm. “But if they have the opportunity to go to Goldman Sachs or any of the big U.S. firms, it’s hard to persuade them to stay here.”

Paul Farr’s highest homegrown offer, from Bain and Co. Canada, amounted to nearly $50,000. Within the next two years at Goldman Sachs, he stands to make as much as $ 150,000 annually, including performance bonuses. “The competition between Canadian firms and U.S. firms is severely out of whack,” says Farr. “I laughed when I saw the Canadian offers.” For the moment, at least, the big money is beckoning.

John Schofield

with

John DeMont

in Halifax

The bottom line

Average Canadian starting salaries for business undergrads, 1998

Investment banking

Consulting

Marketing

Commercial banking Accounting

SOURCE: McGILL UNIVERSITY

$72,000

$48,000

$40,000

$33,000

$29,000