Why no one can end the investment banking recruiting war

• Key Insight: Recruitment processes at investment banks have shifted earlier, often beginning during college students’ sophomore year.
• What’s at Stake: The intense competition for young talent has made it unlikely that banks will ease up on recruitment practices.
• Supporting Data: Investment banking jobs have increased at a far faster clip than overall employment.

The CEO of Goldman Sachs can’t change his company’s hiring practices, he says, even though he wants to.

David Solomon, chairman and chief executive at one of the largest investment banks in the world, thinks that recruiting by firms like Goldman starts too early. But as the banks compete with each other, along with private equity firms and the tech industry, for young talent, Solomon said last week that it’s not feasible to pull back that timeline.

“I think it would be healthier for everyone if this all wasn’t accelerated,” he said during a fireside chat at Georgetown University. “But I think it’s very hard to pull back. It’s one of those competitive things that evolved in a direction. The way it exists today is not the way I would design it — with students’ best interests in mind — if I had the latitude to individually design the system. But unfortunately, I don’t.”

Many students must start taking action early in their undergraduate careers, or even before they step onto campus, if they want to pursue a career in investment banking, said Reena Aggarwal, a finance professor at Georgetown and director of the school’s Psaros Center for Financial Markets and Policy, in an interview with American Banker.

But the process also isn’t persuading many undergrads to ditch the industry.

“They’re passive, in the sense that this is how it works,” Aggarwal said. “You don’t hear students complaining about it that much because it’s just, ‘OK, this is how it is.'”

The lucrative investment banking industry remains compelling to many students. Even as the overall job market is showing signs of strain, investment banking hiring is on a roll in 2025.

Employment in investment banking and related financial activities has increased across the first eight months of this year, so far, and has been on a steady incline since a lull in 2023 and 2024, according to data from the Federal Reserve Bank of St. Louis.

Internship applications, which often lead to full-time, post-graduate jobs, can start in the fall of a student’s sophomore year. Some students may have interviews before they’ve ever taken a finance class, Aggarwal said.

“If you want to get into that pipeline, you have to start pretty early, otherwise you don’t have a chance,” she said.

Students are also having to compete to participate in extracurricular activities and clubs that are seen as training grounds for some of the sought-after finance jobs, according to Aggarwal.

Aggarwal, who conducted the conversation with Solomon during last Friday’s conference, said she brought up the issues related to on-campus recruiting because of her concerns about seeing 18-year-olds scrambling to prepare for careers before even settling into campus life.

The process has been shifting earlier and earlier, she said, and that acceleration seems to have picked up even more in the last six years or so.

Not only have the timelines for landing these roles started earlier and earlier, Aggarwal said, but the processes themselves are rigidly time-sensitive. Banks often give quick-turnaround acceptance deadlines to students, after which the offers are revoked. Solomon said he doesn’t like the practice, adding that he doesn’t think it’s “fair to put that kind of pressure on young students.”

“This is something that I’ve been unsuccessfully passionate about,” Solomon said. “It just goes to show you, even when you’re in charge, you can’t necessarily change things.”

But the intensifying scramble of investment banking recruiting has changed, at least in part, recently. Competition with the private equity industry has created friction in recent years, as some students and early graduates have started jobs at banks after having already accepted future positions at other firms.

Banks have fought back against the practice. JPMorganChase CEO Jamie Dimon, during remarks at Georgetown’s conference last year, said he thought it was “unethical.”

“I want patriots, not mercenaries,” Dimon said at the time, referring to students who join his bank with their next job already secured. “And I think it’s wrong to put you in the position you have to kind of decide the next career move before you’ve had a chance to see what one company’s like.”

After JPMorgan, Goldman and other megabanks said they would take measures to combat the early commitments — including by routinely asking analysts if they’ve accepted other jobs or firing employees outright who had — some private equity shops have eased up. Apollo Global Management and General Atlantic, two of the largest private equity firms in the country, said they wouldn’t extend offers this year for jobs that start in 2027.

Solomon said last week that he doesn’t know “if we’ve completely taken care of” the issue, but he doesn’t have a great solution in mind.