7 ms·

25% of Yale goes to Consulting, Finance

94 points by jrosenblatt 15y ago

samgro 15y ago
That's all? At Princeton I'm pretty sure it was closer to 50%.
- peterzakin 15y ago
  haha. I don't think it's that high. But I do think it's higher than 25%.
  - samgro 15y ago
    This isn't an apples to apples comparison, but according to the Prince, 41.5% of the graduating seniors my year (2008) "who had accepted full-time employment offers by graduation" were employed in the "financial sector" (http://www.dailyprincetonian.com/2010/03/08/25465/ http://www.dailyprincetonian.com/2010/03/08/25465/). Not an apples to apples comparison with the Yale article, but my reaction is still surprised that the number is that small at Yale.
    - crazygringo 15y ago
      Yale and Princeton student cultures could not be more different. Yale attracts a more ultra-liberal, save-the-world student body, whereas Princeton attracts a more ultra-conservative, make-the-money student body. It doesn't suprise me that the original posted article came out of the Yale's student newspaper, instead of a Princeton one.
      - peterzakin 15y ago
        I think you're stereotyping too strongly here. The difference in character between Princeton and Yale is marginal.
- sabraham 15y ago
  It's around 40%.
jasonshen 15y ago
It goes to show that what scares high achieving people the most is the risk that they may no longer continue to be high achieving. This happened a lot at Stanford too. Smart people are scared of uncertainty in their career because they feel they have more to lose.
kapilkale 15y ago
I don't regret going to management consulting after college. In my opinion, it's the best possible career choice for people who don't know what they want to do. In my time in consulting, I was exposed to people in every corporate function possible, and had the chance to see what their jobs were like. I worked for tech companies, PE firms, corporations, and government-regulated entities. I spent 6 months in growth equity and got to learn what the buy-side is like. If I had known then what I know now, then I would have told my 21 year old self to go work at FB or Amazon or some small startup. But the value proposition for the firm I went to was unequivocal. We will pay you a lot. The opportunities you have when you leave will pay you even more. You'll get to work with other extremely smart people. You will see a ton of industries. You will be able to go to whatever b-school you want when you're ready to apply. And if you get good at your job after a couple years, your hours will go down substantially.
- wagermethis 15y ago
  i was in consulting too. i played a lot of ping pong and was grossly underpaid. but life was pretty good.
- jimmyhwang 15y ago
  I agree with you. I just recently quit my consulting gig and I would tell my 21 year old self to work for a company that creates "real value." But the experience I gained during my 2 1/2 years exposed me to multiple industries and I starting thinking much more "strategically" when analyzing businesses. Also, I worked with probably some of the smartest people you could assemble (less a few "odd" ones). Also, the expense account was nice and fed me well.
- bocmaxima 15y ago
  FB and Amazon turned out just fine without your help, the only reason you wish you had worked there was in order to extract and benefit from the great pool of wealth and prestige. Your value to society is nil for as long as you spend more mental energy consuming more than you create. Remember that all highly educated people bear a responsibility much greater than ourselves, and this responsibility is fulfilled only by sacrifice and discomfort.
stfu 15y ago
This is not really that much surprising. Taking a look at the comments from someone with years of Ivy business school placement experience ( http://poetsandquants.com/2011/06/23/handicapping-your-shot-at-a-top-school/ http://poetsandquants.com/2011/06/23/handicapping-your-shot-... ) all that diversity, creativity and a personality talk seems just a fluffy facade. In fact most likely the only troubling aspect for Yale is that they couldn't rise the number above 25%.
jessriedel 15y ago
Honestly, should the consulting thing confuse or worry anyone? First, my understanding is that the term "consultant" has become so broad that it basically just means "contractor" for intellectual jobs; it covers coding, management, business strategy, and a million other things. Second, even if we stick to a slightly more narrow definition, consulting essentially boils down to smart people going around to existing businesses and telling them how to do their jobs better (hopefully). (Presumably, these businesses don't need the smart people most of the time, which is why they don't have them as employees.) At least superficially, this seems like an appropriate use of smart people: target them at the problems where they are needed, which are dispersed across many businesses. Now, if finance and consulting are actually sectors that aren't contributing to society (a net drain), then there's a real problem. But if so, the fact that so many smart people are going into them to make money is just the symptom, not the problem,
- Bartlet 15y ago
  In this context, I think "consulting" means Management Consulting, i.e. working for McKinsey, Bain, BCG, etc. Corporate recruiting at top schools is heavily dominated by finance and management consulting firms.
- pigbucket 15y ago
  >Honestly, should the consulting thing confuse or worry anyone? I think the author did a pretty good job of explaining why she is worried, and while your two points are compelling, neither really addresses that explanation. You've got people who wanted to be artists, or public servants, or writers, or filmmakers, or non-profit workers, giving up their dreams for the sake of the security offered seductively by professional recruiters. That's a trade off for them, and perhaps liable to elicit a general shrug, but it's hardly a radical position to view so many making that trade off as potentially a loss for society or, say, humanity. Maybe the Shakespeares of this world always end up being Shakespeares. But maybe every once in a while they end up in finance or consultancy. I think it's fine that they have to freedom to do that. I think it's a shame that so much of the risk is on the side of "I'm going to be the next Shakespeare."
  - 15y ago
wng 15y ago
the consulting/banking industries create such a high opportunity cost that doing something else seems senseless. it's unfortunate that recent grads are stuck in this high level corporate rat race, with promises of high bonuses but mostly pretty boring careers. I think one solution would be to limit the access these firms have with students, and to curb their "predatory" hiring. But alas, these firms are large donors to universities, and their executives are as well. Alas, American politics AND education are birds of the same feather. Both sing the same tune of ethics, ideals and values; and both are preyed on by the same corporations.
sethbannon 15y ago
What this article doesn't mention is the burgeoning Yale Entrepreneurial community, which has been experience a great boom as of late.
- deleted 15y ago
  [deleted]
- turing 15y ago
  This is true. Both the Yale Entrepreneurial Institute and the Yale Entrepreneurial Society are doing great things. In fact, two businesses opened in downtown New Haven this fall that were the direct result of YEI's programs. The fact that the upcoming "HackYale" web entrepreneurship course attracted 600 interested students is also comforting.
turing 15y ago
I was actually discussing this with a fellow Yale student over dinner tonight. We both came to the same, largely negative, conclusion as the professors interviewed in the article: "it’s an unproductive use of Yalies’ time." These students are given opportunities most people only dream of. We are exposed to leaders in our fields every day. We are blessed with a $20 billion endowment that enables nearly anything we can envision. Many of us receive tens, hundreds of thousands of dollars in financial aid. The fact that so many choose to go on to careers that do so little to give back is, in my opinion, shameful.
- jrockway 15y ago
  Maybe Yale should use that endowment to pay people to give back to society? In the end, people don't become bankers or consultants because they are looking for the easiest way to be a drain on society. They do it because society gives them a lot of money for doing it, and they have to pay off their $100,000 student loans and raise a family.
  - turing 15y ago
    They do in many ways, at least indirectly. One possible outlet we discussed for encouraging students to forgo careers in banking and consulting was financial aid. Suppose Yale instituted a policy that accepting financial aid required an agreement to forgo consulting and banking positions for at least 2 years after graduation. This would decrease the number of students who choose such careers "just because." Other students who intend to go into such careers would surely be drawn away to other fields during the waiting period. Of course, those who do not qualify for financial aid, and those who can afford to deny the aid they are offered, would not be affected by such a measure. This would warrant a consideration of whether the class divide on post-graduation freedom is undesirable. Then again, I don't think it would be unreasonable for Yale to say: "We are offering you the opportunity of a lifetime, an education at an amazing school you would otherwise not be able to afford. The only condition is that you must do something productive with it." There's also the possibility of positive reinforcement as opposed to the negative scenarios outlined above. What if Yale offered additional financial aid to those who agreed to teach/do research/pursue charitable work for two years after graduation?
rayiner 15y ago
I mean, if you had the opportunity to earn six figures at graduation, wouldn't you go into these fields too? 75% of Yalies are normal people (the other 25% come from money). They're the children of working professionals, federal government employees, etc. They have had comfortable upbringings, but their families don't have "fuck you" money. They've been pushed and prodded all their life by parents who, like everyone else without "fuck you" money, are desperately afraid of falling out of the middle class. Most of the kids don't know it yet, and maybe the parents don't consciously acknowledge it, but it's a major force underlying the thinking of every parent who sends his kid to an SAT prep class so he can get a high score and go to Yale. At the same time, regular jobs suck. Thanks to the consultants, they're overly structured, have shitty benefits, and workers are managed by PHB's who don't know jack-shit about the jobs that the workers do. Upward mobility is curtailed, because many F500's prefer to hire managers from the ranks of consultants, instead of promoting people from within. The risk in potentially more interesting jobs is high: fail to make it big, and you could be stuck in a job where you get yelled at for punching in a couple of minutes late and to the extent that you're lucky enough to get health insurance, it'll be on a shitty plan. Thankfully science/tech is mercifully insulated from this phenomenon (so far), but many students don't have the particular aptitude or desire for those fields.
- david927 15y ago
  I imagine the question isn't, "Why are they going into this lucrative industry?" as much as it is, "why is this industry so exceptionally lucrative?" To me, the financial industry looks like every other bubble right before the pop with everyone trying to pile in to the money machine, but any close examination of the machine reveals an empty ruse. Maybe you're right and they were pushed into it. But it's short-term thinking and I am not going to cry when the bubble pops and leaves them holding a big sack of dead end.
  - bane 15y ago
    "To me, the financial industry looks like every other bubble right before the pop with everyone trying to pile in to the money machine, but any close examination of the machine reveals an empty ruse." And I don't think I've ever heard a kind word about management consultants. A field dominated by 20 somethings with 0 professional work experience brought in to tell executives and managers of highly successful multi-million/billion dollar companies how to run their businesses... A question each and every person that hires a management consultant should ask themselves, "would I hire this 20 something to run my organization?" If the answer is no, then why are you paying them to tell you how to run it? It's a bit like bringing in a random, just out of school, development consultant and giving them charge over major development teams. Oh wait, I've seen that happen too, each project then proceeded to go several times over budget and were delivered broken and late and eventually scrapped. "why is this industry so exceptionally lucrative?" The honest to god real reason these guys are hired, and how the system ultimately works, is for a couple of really quite bad reasons a) The CEO ends up in a bind with no good ideas, or knows that no matter what happens, they're screwed. It could be lack of product, or a better competitor, etc. b) The CEO doesn't want to appear weak so that people will still follow him/her while the ship sinks. So they bring in management consultants, sold as "experts". Having a bunch of Ivy Leaguers helps with that image. The entire problem, including the blame for when it inevitably fails, is intended to go onto the Consultants. Their job is to appear busy and smart, then take the blame (and the large consultancy fee) when it all falls apart. This leaves the CEO in a good position "I brought in experts and even they couldn't make it work!". And that's it. That's the entire management consultancy industry in a nutshell. Blame for pay. A great article on the phenomenon that describes a life I've had confirmed by several friends in the field who've all since gotten out: http://tech.mit.edu/V130/N18/dubai.html http://tech.mit.edu/V130/N18/dubai.html (they were all also shocked at how hard it is to actually run a company vs. what their years in management consultancy led them to believe)
mebesilly 15y ago
That is shocking. I am amazed that Yale places so poorly. I know that Harvard, Princeton and Oxford place much better, around the 40% mark.
sudonim 15y ago
I almost went the consulting route. It seemed so appealing. Good pay, lots of variety in projects. In the end I didn't. As a result, I've gotten real experience working at real jobs. I didn't consult on how to improve sales. I sold stuff. And now, I don't consult on how to implement sharepoint at megacorp. I make software. The salaries are still higher in banking and consulting. But they aren't high enough to compensate for the utter lack of value I'd be providing to society.
dummy3account6 15y ago
I'm very surprised it's that low. From talking to guys here you'd think it's more like half. Original source that they don't link to: http://www.yale.edu/oir/open/pdf_public/YC%2010%20Sr%20Study%20Report.pdf http://www.yale.edu/oir/open/pdf_public/YC%2010%20Sr%20Study... If you look at the original source, you'll find that 1) it's only 25% if you don't count Yalies who went to grad school, about a quarter of the class, and 2) there was a HUGE (50%) falloff from 2008 to 2010 due to the crash, so in 2010 it was more like 12-15%, not 25%. (Yale senior here)
qq66 15y ago
I now run a startup (http://getliveloop.com http://getliveloop.com) but started out of college with 2 years at McKinsey. I can't compare it against anything else as a job right out of college, but I learned a lot about various types of businesses, how to communicate to executives, and the general polish that I needed to get from MIT to a fundraising meeting on Sand Hill Road. I also got to work and live for a few months in 9 different cities around the world, which gave me a great perspective on what I care and don't care about in terms of where I live, where I work, and who I associate with. I found it very useful to me, I didn't have to come up with convoluted justifications for why I did it, and I'd do it again if I was in a similar situation.
capkutay 15y ago
The fact that I know too many people under the age of 22 with no degrees (not to say they're unintelligent), running their own successful "consulting" companies makes me question the industry on its own. Don't get me wrong, it's a great career path for some. But I would hope that any venture I'm apart of won't need it...better options would include corporate law firms that double in business development or having investors with experience and know-how in your field...
- dsandrowitz 15y ago
  I think there is a big difference between Bain or McKinsey and some social media consultancy started by a kid who believes that prolific tweeting is the future of marketing. Both paths might lead to varying degrees of economic vampires, but at least the freelances are trying to build their own business instead of joining the overlords.
georgieporgie 15y ago
On a vaguely related note, the latest Planet Money podcast, "How Money Got Weird," was interesting. Satyajit Das talked about how a large airline was essentially turned into a bank by ever more creative accounting and finance practices. It gets into the rise of finance in traditionally unrelated fields. http://www.npr.org/blogs/money/ http://www.npr.org/blogs/money/
tikhonj 15y ago
One of the things I love about being in CS is that there is much less pressure to go into management consulting or finance--straight out of college, tech companies offer similar stability and pay (perhaps more stability and less pay, but it's close) coupled with very nice working conditions and actual, nontrivial engineering problems. For me and my EE/CS friends there are three options that come before finance (I don't think anybody even considers management consulting): grad school, FB/Google/MSFT...etc or a start up. I only know one person eager to enter finance, compared to many people interested in, and usually already working towards, either an academic path, a stable programming career or founding their own company. That said, there is some very serious selection bias in my group of friends, so this is probably not indicative of my university at large. Particularly, almost everybody I know is in some sort of engineering, and the school I'm at is particularly strong in engineering (especially EE/CS). I suspect if I had more friends from the business school I would have a very different picture.
- Maro 15y ago
  The point is, they can go into M/C/F, make 6-figure salaries at age 23, then go from there. They'll be making a whole lot more than the vast majority of engineers even at Google, without taking risks. By the time they're 35, they'll be very wealthy, about as wealthy as you'd be if you start a startup and sell at a $10M valuation (and keep $1-2M), but they don't have to take any risks. But you have to work very hard (all the way from High School), tread along a well defined path, and it'll work out. It's a standardized, reproducible variant of the American Dream of living a wealthy life.
jgfoot 15y ago
A revealing part of the article comes when Yale Prof. Hicks says that, rather than develop skills with consulting firms, "There are a half-dozen more life-affirming ways you can acquire those same skills, including taking a class at night at a junior college while you do something more interesting." This is not a good advertisement for Yale. In addition to costing a lot of money, Yale costs four years of lifetime. Yet, after all that, students are left in a position where if they want business skills, they have to hold down a job and go to night school at a junior college?
- crazygringo 15y ago
  Yale is, by design, a non-professional school (for undergraduates). Its philosophy is that it focuses entirely on a liberal arts education to make you a better, more-informed, deeper human being. (In fact, it won't even calculate your GPA for you.) Because of this, it does not have business classes. You cannot major in communications or public relations. It doesn't have an official pre-med program. The idea is, you've got the rest of your life to do all that. Whether you think this is a smart philosophy, of course, depends on your point of view. And of course, after you graduate from undergrad, then you can try Yale's graduate programs, among which you'll find some of the top professional schools in the country.
bane 15y ago
While it's not jail (they are staying off the streets and out of gangs), it'd be nice if they were going into fields that actually contributed to society.
bane 15y ago
I might point out, after reading many of the comments here, that people who are currently or have done management consulting in the past all say essentially the same thing about the experience -- it was great for them, they saw lots of stuff, traveled a bit, made some money. But none of them say they actually helped a single employee of a single organization actually accomplish anything in particular for all the fees and free experience being paid to them so they could gain this wide experience, travel and fat paycheck. And if it's not clear, this is precisely what we're talking about with the field not being a net contributor to society. (also interestingly, to the person, every single person I've ever known who worked in the field all say they would have done something different if they could go and tell their 21 year old self one thing)
- ryanlchan 15y ago
  Strategy consultants are extremely highly paid, extremely specialized temp workers. We only create as much value as the client asks us to get. It's a time-money play. We do the work that creating or scaling a corporate strategy group would do if you had the 6-12 months to go out, hire a team, train them together, create the necessary links to the organization, and go do the work. With consultants, you can hire and fire us at any time, no severance, pensions, or hard feelings. Once our work's done, we leave. I'm not saying it's the best thing since sliced bread. But zero net contributor it isn't.
  - bane 15y ago
    We do the work that creating or scaling a corporate strategy group would do if you had the 6-12 months to go out, [a] hire a team, [b] train them together, [c] create the necessary links to the organization, and [d] go do the work. note: [a]-[d] inserted for reference And here it is, I would argue that consultants offer (to each reference point): a faster time to [a], you hire them as a group instead of sourcing each worker separately no [b], after all, they are ~20 year old "experts" led by an experience consultant manager or firm partner who's sole job is to stash the squadron of kids at the other company and check up on them every so often, then give a grand presentation at the end of the contract term. Why would they need to understand the particulars of how a company works or how to move them to a path to success? After all, probably nobody on the team has actually run a successful company. And businesses all fit into nice b-school categories anyways. no [c], it's like a group of shock troops falls out of the sky on an organization and commences to create chaos. I've never seen something so disruptive to a company as a consulting team inserting themselves into the day-to-day of an organization. They don't know anybody, they don't want to know anybody, and it doesn't help them to know anybody beyond charting out the organization and work structure of the company. a debatable [d]. Oh, okay, I'm being harsh about [d]. All of my friends who work in mgmt consulting work their gosh darn asses off, generating thousands of powerpoint slides and binders full of diagrams. Does it amount to much? I dunno. There's some value from a Knowledge Management perspective for an organically grown organizations to understand how information and communications occur in their company. Mapping out de facto business processes I guess is helpful. Does it require a team of consultants to come in and do this? Nah, most companies could do this with one or two dedicated hires for far cheaper and far less disruption. In my personal, admittedly anecdotal experience, these things could be useful if they were done properly. But I've never actually seen a consultant team actually interview the line workers who would actually know this stuff. It's like it's beneath them, and too time consuming to figure out that the blue form #4 doesn't go from department x on floor 5 to department c on floor 6, but actually goes from John in department x to Lisa in admin, who then brings it to her boss Karl who then collects them in a stack to give out at the weekly management meeting to Jessi who works on floor 6, but not in department c, but who is married to John (no relation to the previous John), and gives it to him at night over dinner in department c, who works for the ultimate recipient of the form, John's brother Jake who is supposed to manage the department and initiate processing the forms, but has a drinking problem and only shows up to work in the middle of the week to do so. Why this convoluted process? Why not just have blue form #4 go from x->c like the manager in x believes happens (but doesn't because she doesn't follow the de facto processes enough to know this)? Who knows? The consultants don't know that's for sure because they never investigate this Rube Goldberg machine. And when analyzing why it's so slow and convoluted, they analyze it to death and might just decide that department c is the slow boat in the fleet and its more cost effective to eliminate that department by merging them with x and eliminating redundancies when really they just need to replace Jake and make the form electronic so the form is emailed between floors. You think I'm making the previous example up, but I'm not. And what actually happened is that when they merged the department they fired John (#2) which sparked Jessi to desire to leave the company, and she brought along half of her department which didn't need to have that happen. Within a year 12 other key people left out of bad blood with the company sparked by this initial round of redundant layoffs. And oh yeah, Jessi, who left with her team, started her own company with her husband John and that staff, who ultimately ended up contracting back at their old company, to do their old jobs, at 3x the hourly charge rate. And Jake still works there, whenever he feels like coming in. But to make up for his personal failures, the company has had to hire a fleet of subordinates. End result? 3 failed multi-million dollar projects, not late, failed. Rehiring the same employees at 3x the charge rate as contractors, and to support Jake they had to increase head count to the point that it's virtually unchanged from before the entire merger of department x and c. And oh yeah, the company is out a $2 million dollar consulting fee.
michaelochurch 15y ago
There's a lot that can be said about this, so I'm just going to focus on what I think is the nub of the disconnect here. Studying philosophy, art, history, religion, science and the classics (that is, education as opposed to mere training) is supposed to bring people in touch with their humanity and, more relevantly, their mortality-- the fact that we'll all die and that it can happen at any time. The first 5 to 15+ years in the professional and corporate life (and not just in the demonized investment banks and consulting firms, because this is a common trait of human organizations and every bit as entrenched in academia and mainstream corporations) are about denying said mortality. You're expected to focus on a far-off distant future that may never come and, in the mean time, "pay your dues"-- that is, work in conditions that no one would accept unless harboring a delusion of infinite time, a misguided belief that the present doesn't matter because the future will be flush with riches, prestige, and make all those present-time sacrifices irrelevant. I don't support war or conscription in general, but it's no coincidence that the "yuppie" phenomenon was born after the abolition of The Draft. Once kids lost awareness of death (not that it exists, but that it will happen to them at an inconvenient time; it's always "inconvenient") they could treat their own time as limitless and without value, so they relaxed their demands for autonomy, rewarding work, and mentorship in exchange for a 10 or 20 percent bump in immediate prosperity. I would call this a failure of the educational system, but I don't think it is. We have a deeply deluded culture focused on the transient and on seduction and I don't think (even if individual professors do a great job) this is something that schools can fix.
kosei 15y ago
Just a note - it's 25% of employed graduates that go to consulting/finance. Not of all graduates. This is a significant difference.

94 points by jrosenblatt 15y ago

samgro 15y ago

That's all? At Princeton I'm pretty sure it was closer to 50%.

peterzakin 15y ago
haha. I don't think it's that high. But I do think it's higher than 25%.
- samgro 15y ago
  This isn't an apples to apples comparison, but according to the Prince, 41.5% of the graduating seniors my year (2008) "who had accepted full-time employment offers by graduation" were employed in the "financial sector" (http://www.dailyprincetonian.com/2010/03/08/25465/ http://www.dailyprincetonian.com/2010/03/08/25465/). Not an apples to apples comparison with the Yale article, but my reaction is still surprised that the number is that small at Yale.
  - crazygringo 15y ago
    Yale and Princeton student cultures could not be more different. Yale attracts a more ultra-liberal, save-the-world student body, whereas Princeton attracts a more ultra-conservative, make-the-money student body. It doesn't suprise me that the original posted article came out of the Yale's student newspaper, instead of a Princeton one.
    - peterzakin 15y ago
      I think you're stereotyping too strongly here. The difference in character between Princeton and Yale is marginal.
sabraham 15y ago
It's around 40%.

jasonshen 15y ago

It goes to show that what scares high achieving people the most is the risk that they may no longer continue to be high achieving. This happened a lot at Stanford too. Smart people are scared of uncertainty in their career because they feel they have more to lose.

kapilkale 15y ago

I don't regret going to management consulting after college. In my opinion, it's the best possible career choice for people who don't know what they want to do. In my time in consulting, I was exposed to people in every corporate function possible, and had the chance to see what their jobs were like. I worked for tech companies, PE firms, corporations, and government-regulated entities. I spent 6 months in growth equity and got to learn what the buy-side is like. If I had known then what I know now, then I would have told my 21 year old self to go work at FB or Amazon or some small startup. But the value proposition for the firm I went to was unequivocal. We will pay you a lot. The opportunities you have when you leave will pay you even more. You'll get to work with other extremely smart people. You will see a ton of industries. You will be able to go to whatever b-school you want when you're ready to apply. And if you get good at your job after a couple years, your hours will go down substantially.

wagermethis 15y ago
i was in consulting too. i played a lot of ping pong and was grossly underpaid. but life was pretty good.
jimmyhwang 15y ago
I agree with you. I just recently quit my consulting gig and I would tell my 21 year old self to work for a company that creates "real value." But the experience I gained during my 2 1/2 years exposed me to multiple industries and I starting thinking much more "strategically" when analyzing businesses. Also, I worked with probably some of the smartest people you could assemble (less a few "odd" ones). Also, the expense account was nice and fed me well.
bocmaxima 15y ago
FB and Amazon turned out just fine without your help, the only reason you wish you had worked there was in order to extract and benefit from the great pool of wealth and prestige. Your value to society is nil for as long as you spend more mental energy consuming more than you create. Remember that all highly educated people bear a responsibility much greater than ourselves, and this responsibility is fulfilled only by sacrifice and discomfort.

stfu 15y ago

This is not really that much surprising. Taking a look at the comments from someone with years of Ivy business school placement experience ( http://poetsandquants.com/2011/06/23/handicapping-your-shot-at-a-top-school/ http://poetsandquants.com/2011/06/23/handicapping-your-shot-... ) all that diversity, creativity and a personality talk seems just a fluffy facade. In fact most likely the only troubling aspect for Yale is that they couldn't rise the number above 25%.

jessriedel 15y ago

Honestly, should the consulting thing confuse or worry anyone? First, my understanding is that the term "consultant" has become so broad that it basically just means "contractor" for intellectual jobs; it covers coding, management, business strategy, and a million other things. Second, even if we stick to a slightly more narrow definition, consulting essentially boils down to smart people going around to existing businesses and telling them how to do their jobs better (hopefully). (Presumably, these businesses don't need the smart people most of the time, which is why they don't have them as employees.) At least superficially, this seems like an appropriate use of smart people: target them at the problems where they are needed, which are dispersed across many businesses. Now, if finance and consulting are actually sectors that aren't contributing to society (a net drain), then there's a real problem. But if so, the fact that so many smart people are going into them to make money is just the symptom, not the problem,

Bartlet 15y ago
In this context, I think "consulting" means Management Consulting, i.e. working for McKinsey, Bain, BCG, etc. Corporate recruiting at top schools is heavily dominated by finance and management consulting firms.
pigbucket 15y ago
>Honestly, should the consulting thing confuse or worry anyone? I think the author did a pretty good job of explaining why she is worried, and while your two points are compelling, neither really addresses that explanation. You've got people who wanted to be artists, or public servants, or writers, or filmmakers, or non-profit workers, giving up their dreams for the sake of the security offered seductively by professional recruiters. That's a trade off for them, and perhaps liable to elicit a general shrug, but it's hardly a radical position to view so many making that trade off as potentially a loss for society or, say, humanity. Maybe the Shakespeares of this world always end up being Shakespeares. But maybe every once in a while they end up in finance or consultancy. I think it's fine that they have to freedom to do that. I think it's a shame that so much of the risk is on the side of "I'm going to be the next Shakespeare."
- 15y ago

wng 15y ago

the consulting/banking industries create such a high opportunity cost that doing something else seems senseless. it's unfortunate that recent grads are stuck in this high level corporate rat race, with promises of high bonuses but mostly pretty boring careers. I think one solution would be to limit the access these firms have with students, and to curb their "predatory" hiring. But alas, these firms are large donors to universities, and their executives are as well. Alas, American politics AND education are birds of the same feather. Both sing the same tune of ethics, ideals and values; and both are preyed on by the same corporations.

sethbannon 15y ago

What this article doesn't mention is the burgeoning Yale Entrepreneurial community, which has been experience a great boom as of late.

deleted 15y ago
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turing 15y ago
This is true. Both the Yale Entrepreneurial Institute and the Yale Entrepreneurial Society are doing great things. In fact, two businesses opened in downtown New Haven this fall that were the direct result of YEI's programs. The fact that the upcoming "HackYale" web entrepreneurship course attracted 600 interested students is also comforting.

turing 15y ago

I was actually discussing this with a fellow Yale student over dinner tonight. We both came to the same, largely negative, conclusion as the professors interviewed in the article: "it’s an unproductive use of Yalies’ time." These students are given opportunities most people only dream of. We are exposed to leaders in our fields every day. We are blessed with a $20 billion endowment that enables nearly anything we can envision. Many of us receive tens, hundreds of thousands of dollars in financial aid. The fact that so many choose to go on to careers that do so little to give back is, in my opinion, shameful.

jrockway 15y ago
Maybe Yale should use that endowment to pay people to give back to society? In the end, people don't become bankers or consultants because they are looking for the easiest way to be a drain on society. They do it because society gives them a lot of money for doing it, and they have to pay off their $100,000 student loans and raise a family.
- turing 15y ago
  They do in many ways, at least indirectly. One possible outlet we discussed for encouraging students to forgo careers in banking and consulting was financial aid. Suppose Yale instituted a policy that accepting financial aid required an agreement to forgo consulting and banking positions for at least 2 years after graduation. This would decrease the number of students who choose such careers "just because." Other students who intend to go into such careers would surely be drawn away to other fields during the waiting period. Of course, those who do not qualify for financial aid, and those who can afford to deny the aid they are offered, would not be affected by such a measure. This would warrant a consideration of whether the class divide on post-graduation freedom is undesirable. Then again, I don't think it would be unreasonable for Yale to say: "We are offering you the opportunity of a lifetime, an education at an amazing school you would otherwise not be able to afford. The only condition is that you must do something productive with it." There's also the possibility of positive reinforcement as opposed to the negative scenarios outlined above. What if Yale offered additional financial aid to those who agreed to teach/do research/pursue charitable work for two years after graduation?

rayiner 15y ago

I mean, if you had the opportunity to earn six figures at graduation, wouldn't you go into these fields too? 75% of Yalies are normal people (the other 25% come from money). They're the children of working professionals, federal government employees, etc. They have had comfortable upbringings, but their families don't have "fuck you" money. They've been pushed and prodded all their life by parents who, like everyone else without "fuck you" money, are desperately afraid of falling out of the middle class. Most of the kids don't know it yet, and maybe the parents don't consciously acknowledge it, but it's a major force underlying the thinking of every parent who sends his kid to an SAT prep class so he can get a high score and go to Yale. At the same time, regular jobs suck. Thanks to the consultants, they're overly structured, have shitty benefits, and workers are managed by PHB's who don't know jack-shit about the jobs that the workers do. Upward mobility is curtailed, because many F500's prefer to hire managers from the ranks of consultants, instead of promoting people from within. The risk in potentially more interesting jobs is high: fail to make it big, and you could be stuck in a job where you get yelled at for punching in a couple of minutes late and to the extent that you're lucky enough to get health insurance, it'll be on a shitty plan. Thankfully science/tech is mercifully insulated from this phenomenon (so far), but many students don't have the particular aptitude or desire for those fields.

david927 15y ago
I imagine the question isn't, "Why are they going into this lucrative industry?" as much as it is, "why is this industry so exceptionally lucrative?" To me, the financial industry looks like every other bubble right before the pop with everyone trying to pile in to the money machine, but any close examination of the machine reveals an empty ruse. Maybe you're right and they were pushed into it. But it's short-term thinking and I am not going to cry when the bubble pops and leaves them holding a big sack of dead end.
- bane 15y ago
  "To me, the financial industry looks like every other bubble right before the pop with everyone trying to pile in to the money machine, but any close examination of the machine reveals an empty ruse." And I don't think I've ever heard a kind word about management consultants. A field dominated by 20 somethings with 0 professional work experience brought in to tell executives and managers of highly successful multi-million/billion dollar companies how to run their businesses... A question each and every person that hires a management consultant should ask themselves, "would I hire this 20 something to run my organization?" If the answer is no, then why are you paying them to tell you how to run it? It's a bit like bringing in a random, just out of school, development consultant and giving them charge over major development teams. Oh wait, I've seen that happen too, each project then proceeded to go several times over budget and were delivered broken and late and eventually scrapped. "why is this industry so exceptionally lucrative?" The honest to god real reason these guys are hired, and how the system ultimately works, is for a couple of really quite bad reasons a) The CEO ends up in a bind with no good ideas, or knows that no matter what happens, they're screwed. It could be lack of product, or a better competitor, etc. b) The CEO doesn't want to appear weak so that people will still follow him/her while the ship sinks. So they bring in management consultants, sold as "experts". Having a bunch of Ivy Leaguers helps with that image. The entire problem, including the blame for when it inevitably fails, is intended to go onto the Consultants. Their job is to appear busy and smart, then take the blame (and the large consultancy fee) when it all falls apart. This leaves the CEO in a good position "I brought in experts and even they couldn't make it work!". And that's it. That's the entire management consultancy industry in a nutshell. Blame for pay. A great article on the phenomenon that describes a life I've had confirmed by several friends in the field who've all since gotten out: http://tech.mit.edu/V130/N18/dubai.html http://tech.mit.edu/V130/N18/dubai.html (they were all also shocked at how hard it is to actually run a company vs. what their years in management consultancy led them to believe)

mebesilly 15y ago

That is shocking. I am amazed that Yale places so poorly. I know that Harvard, Princeton and Oxford place much better, around the 40% mark.

sudonim 15y ago

I almost went the consulting route. It seemed so appealing. Good pay, lots of variety in projects. In the end I didn't. As a result, I've gotten real experience working at real jobs. I didn't consult on how to improve sales. I sold stuff. And now, I don't consult on how to implement sharepoint at megacorp. I make software. The salaries are still higher in banking and consulting. But they aren't high enough to compensate for the utter lack of value I'd be providing to society.

dummy3account6 15y ago

I'm very surprised it's that low. From talking to guys here you'd think it's more like half. Original source that they don't link to: http://www.yale.edu/oir/open/pdf_public/YC%2010%20Sr%20Study%20Report.pdf http://www.yale.edu/oir/open/pdf_public/YC%2010%20Sr%20Study... If you look at the original source, you'll find that 1) it's only 25% if you don't count Yalies who went to grad school, about a quarter of the class, and 2) there was a HUGE (50%) falloff from 2008 to 2010 due to the crash, so in 2010 it was more like 12-15%, not 25%. (Yale senior here)

qq66 15y ago

I now run a startup (http://getliveloop.com http://getliveloop.com) but started out of college with 2 years at McKinsey. I can't compare it against anything else as a job right out of college, but I learned a lot about various types of businesses, how to communicate to executives, and the general polish that I needed to get from MIT to a fundraising meeting on Sand Hill Road. I also got to work and live for a few months in 9 different cities around the world, which gave me a great perspective on what I care and don't care about in terms of where I live, where I work, and who I associate with. I found it very useful to me, I didn't have to come up with convoluted justifications for why I did it, and I'd do it again if I was in a similar situation.

capkutay 15y ago

The fact that I know too many people under the age of 22 with no degrees (not to say they're unintelligent), running their own successful "consulting" companies makes me question the industry on its own. Don't get me wrong, it's a great career path for some. But I would hope that any venture I'm apart of won't need it...better options would include corporate law firms that double in business development or having investors with experience and know-how in your field...

dsandrowitz 15y ago
I think there is a big difference between Bain or McKinsey and some social media consultancy started by a kid who believes that prolific tweeting is the future of marketing. Both paths might lead to varying degrees of economic vampires, but at least the freelances are trying to build their own business instead of joining the overlords.

georgieporgie 15y ago

On a vaguely related note, the latest Planet Money podcast, "How Money Got Weird," was interesting. Satyajit Das talked about how a large airline was essentially turned into a bank by ever more creative accounting and finance practices. It gets into the rise of finance in traditionally unrelated fields. http://www.npr.org/blogs/money/ http://www.npr.org/blogs/money/

tikhonj 15y ago

One of the things I love about being in CS is that there is much less pressure to go into management consulting or finance--straight out of college, tech companies offer similar stability and pay (perhaps more stability and less pay, but it's close) coupled with very nice working conditions and actual, nontrivial engineering problems. For me and my EE/CS friends there are three options that come before finance (I don't think anybody even considers management consulting): grad school, FB/Google/MSFT...etc or a start up. I only know one person eager to enter finance, compared to many people interested in, and usually already working towards, either an academic path, a stable programming career or founding their own company. That said, there is some very serious selection bias in my group of friends, so this is probably not indicative of my university at large. Particularly, almost everybody I know is in some sort of engineering, and the school I'm at is particularly strong in engineering (especially EE/CS). I suspect if I had more friends from the business school I would have a very different picture.

Maro 15y ago
The point is, they can go into M/C/F, make 6-figure salaries at age 23, then go from there. They'll be making a whole lot more than the vast majority of engineers even at Google, without taking risks. By the time they're 35, they'll be very wealthy, about as wealthy as you'd be if you start a startup and sell at a $10M valuation (and keep $1-2M), but they don't have to take any risks. But you have to work very hard (all the way from High School), tread along a well defined path, and it'll work out. It's a standardized, reproducible variant of the American Dream of living a wealthy life.

jgfoot 15y ago

A revealing part of the article comes when Yale Prof. Hicks says that, rather than develop skills with consulting firms, "There are a half-dozen more life-affirming ways you can acquire those same skills, including taking a class at night at a junior college while you do something more interesting." This is not a good advertisement for Yale. In addition to costing a lot of money, Yale costs four years of lifetime. Yet, after all that, students are left in a position where if they want business skills, they have to hold down a job and go to night school at a junior college?

crazygringo 15y ago
Yale is, by design, a non-professional school (for undergraduates). Its philosophy is that it focuses entirely on a liberal arts education to make you a better, more-informed, deeper human being. (In fact, it won't even calculate your GPA for you.) Because of this, it does not have business classes. You cannot major in communications or public relations. It doesn't have an official pre-med program. The idea is, you've got the rest of your life to do all that. Whether you think this is a smart philosophy, of course, depends on your point of view. And of course, after you graduate from undergrad, then you can try Yale's graduate programs, among which you'll find some of the top professional schools in the country.

bane 15y ago

While it's not jail (they are staying off the streets and out of gangs), it'd be nice if they were going into fields that actually contributed to society.

bane 15y ago

I might point out, after reading many of the comments here, that people who are currently or have done management consulting in the past all say essentially the same thing about the experience -- it was great for them, they saw lots of stuff, traveled a bit, made some money. But none of them say they actually helped a single employee of a single organization actually accomplish anything in particular for all the fees and free experience being paid to them so they could gain this wide experience, travel and fat paycheck. And if it's not clear, this is precisely what we're talking about with the field not being a net contributor to society. (also interestingly, to the person, every single person I've ever known who worked in the field all say they would have done something different if they could go and tell their 21 year old self one thing)

ryanlchan 15y ago
Strategy consultants are extremely highly paid, extremely specialized temp workers. We only create as much value as the client asks us to get. It's a time-money play. We do the work that creating or scaling a corporate strategy group would do if you had the 6-12 months to go out, hire a team, train them together, create the necessary links to the organization, and go do the work. With consultants, you can hire and fire us at any time, no severance, pensions, or hard feelings. Once our work's done, we leave. I'm not saying it's the best thing since sliced bread. But zero net contributor it isn't.
- bane 15y ago
  We do the work that creating or scaling a corporate strategy group would do if you had the 6-12 months to go out, [a] hire a team, [b] train them together, [c] create the necessary links to the organization, and [d] go do the work. note: [a]-[d] inserted for reference And here it is, I would argue that consultants offer (to each reference point): a faster time to [a], you hire them as a group instead of sourcing each worker separately no [b], after all, they are ~20 year old "experts" led by an experience consultant manager or firm partner who's sole job is to stash the squadron of kids at the other company and check up on them every so often, then give a grand presentation at the end of the contract term. Why would they need to understand the particulars of how a company works or how to move them to a path to success? After all, probably nobody on the team has actually run a successful company. And businesses all fit into nice b-school categories anyways. no [c], it's like a group of shock troops falls out of the sky on an organization and commences to create chaos. I've never seen something so disruptive to a company as a consulting team inserting themselves into the day-to-day of an organization. They don't know anybody, they don't want to know anybody, and it doesn't help them to know anybody beyond charting out the organization and work structure of the company. a debatable [d]. Oh, okay, I'm being harsh about [d]. All of my friends who work in mgmt consulting work their gosh darn asses off, generating thousands of powerpoint slides and binders full of diagrams. Does it amount to much? I dunno. There's some value from a Knowledge Management perspective for an organically grown organizations to understand how information and communications occur in their company. Mapping out de facto business processes I guess is helpful. Does it require a team of consultants to come in and do this? Nah, most companies could do this with one or two dedicated hires for far cheaper and far less disruption. In my personal, admittedly anecdotal experience, these things could be useful if they were done properly. But I've never actually seen a consultant team actually interview the line workers who would actually know this stuff. It's like it's beneath them, and too time consuming to figure out that the blue form #4 doesn't go from department x on floor 5 to department c on floor 6, but actually goes from John in department x to Lisa in admin, who then brings it to her boss Karl who then collects them in a stack to give out at the weekly management meeting to Jessi who works on floor 6, but not in department c, but who is married to John (no relation to the previous John), and gives it to him at night over dinner in department c, who works for the ultimate recipient of the form, John's brother Jake who is supposed to manage the department and initiate processing the forms, but has a drinking problem and only shows up to work in the middle of the week to do so. Why this convoluted process? Why not just have blue form #4 go from x->c like the manager in x believes happens (but doesn't because she doesn't follow the de facto processes enough to know this)? Who knows? The consultants don't know that's for sure because they never investigate this Rube Goldberg machine. And when analyzing why it's so slow and convoluted, they analyze it to death and might just decide that department c is the slow boat in the fleet and its more cost effective to eliminate that department by merging them with x and eliminating redundancies when really they just need to replace Jake and make the form electronic so the form is emailed between floors. You think I'm making the previous example up, but I'm not. And what actually happened is that when they merged the department they fired John (#2) which sparked Jessi to desire to leave the company, and she brought along half of her department which didn't need to have that happen. Within a year 12 other key people left out of bad blood with the company sparked by this initial round of redundant layoffs. And oh yeah, Jessi, who left with her team, started her own company with her husband John and that staff, who ultimately ended up contracting back at their old company, to do their old jobs, at 3x the hourly charge rate. And Jake still works there, whenever he feels like coming in. But to make up for his personal failures, the company has had to hire a fleet of subordinates. End result? 3 failed multi-million dollar projects, not late, failed. Rehiring the same employees at 3x the charge rate as contractors, and to support Jake they had to increase head count to the point that it's virtually unchanged from before the entire merger of department x and c. And oh yeah, the company is out a $2 million dollar consulting fee.

michaelochurch 15y ago

There's a lot that can be said about this, so I'm just going to focus on what I think is the nub of the disconnect here. Studying philosophy, art, history, religion, science and the classics (that is, education as opposed to mere training) is supposed to bring people in touch with their humanity and, more relevantly, their mortality-- the fact that we'll all die and that it can happen at any time. The first 5 to 15+ years in the professional and corporate life (and not just in the demonized investment banks and consulting firms, because this is a common trait of human organizations and every bit as entrenched in academia and mainstream corporations) are about denying said mortality. You're expected to focus on a far-off distant future that may never come and, in the mean time, "pay your dues"-- that is, work in conditions that no one would accept unless harboring a delusion of infinite time, a misguided belief that the present doesn't matter because the future will be flush with riches, prestige, and make all those present-time sacrifices irrelevant. I don't support war or conscription in general, but it's no coincidence that the "yuppie" phenomenon was born after the abolition of The Draft. Once kids lost awareness of death (not that it exists, but that it will happen to them at an inconvenient time; it's always "inconvenient") they could treat their own time as limitless and without value, so they relaxed their demands for autonomy, rewarding work, and mentorship in exchange for a 10 or 20 percent bump in immediate prosperity. I would call this a failure of the educational system, but I don't think it is. We have a deeply deluded culture focused on the transient and on seduction and I don't think (even if individual professors do a great job) this is something that schools can fix.

kosei 15y ago

Just a note - it's 25% of employed graduates that go to consulting/finance. Not of all graduates. This is a significant difference.