Why no one can end the investment banking recruiting war

• Key Insight: Investment banks are now initiating recruitment processes earlier, frequently starting as early as the sophomore year of college.
• What’s at Stake: The fierce competition for young talent ensures that banks are unlikely to relax their recruitment methods.
• Supporting Data: The increase in investment banking jobs has significantly outpaced overall employment growth.

The CEO of Goldman Sachs acknowledges that he can’t alter his firm’s hiring practices, despite his personal reservations.

David Solomon, who serves as chair and CEO at one of the world’s largest investment banks, believes that early recruitment practices by firms such as Goldman occur too soon. However, as banks vie with one another, along with tech firms and private equity companies, for young talent, Solomon stated last week that changing this timeline is unrealistic.

“I believe it would be healthier for everyone if this process wasn’t accelerated,” he remarked during a conversation at Georgetown University. “However, reverting the timeline is quite challenging. It’s a competitive trend that’s evolved. The current system isn’t structured with students’ best interests in mind, and unfortunately, I don’t have the liberty to redesign it.”

Reena Aggarwal, a finance professor at Georgetown and director of the Psaros Center for Financial Markets and Policy, noted in an interview that aspiring investment bankers must begin preparations long before they even arrive on campus.

Yet, this urgency hasn’t deterred many undergraduates from pursuing this career path.

“Students are largely passive regarding this reality; it’s simply, ‘This is how it works,'” Aggarwal explained. “You don’t hear much complaining about it.”

The attractive investment banking sector continues to draw interest from numerous students. Despite signs of a tightening job market, hiring within the sector is thriving in 2025.

Employment in investment banking and related financial positions has risen throughout the first eight months of this year and has trended upward since a decline in 2023 and 2024, based on data from the Federal Reserve Bank of St. Louis.

Internship applications, often leading to full-time jobs post-graduation, can commence in the fall of a student’s sophomore year. Some students may even undergo interviews prior to having taken their first finance class, Aggarwal indicated.

“To enter that recruitment pipeline, you must begin quite early, or else your chances diminish,” she advised.

Competition is also fierce for participation in extracurricular activities and clubs viewed as prerequisites for entry into competitive finance roles, according to Aggarwal.

During the recent conference, Aggarwal, who engaged in discussion with Solomon, expressed her alarm over observing 18-year-olds feeling pressured to gear up for careers before settling into college life.

The recruitment timeline is increasingly shifting earlier, a trend that has accelerated notably over the past six years.

Not only are the timelines for securing these roles starting sooner, but the processes are also rigidly time-sensitive. Banks often impose swift acceptance deadlines on students, after which offers can be rescinded. Solomon conveyed his disapproval of this practice, stating it is “unfair to subject young students to that kind of pressure.”

“This is an issue I’ve felt passionately about, even if I’ve been unable to effect change,” Solomon remarked. “It serves as a reminder that holding a leadership position doesn’t necessarily empower you to alter things.”

Nonetheless, there have been recent shifts in the competitive landscape of investment banking recruitment. Tensions with the private equity sector have arisen as some students and recent graduates have begun employment at banks while holding upcoming commitments at other firms.

Banks have responded to this trend; for example, JPMorganChase CEO Jamie Dimon referred to the practice as “unethical” during remarks at a previous Georgetown conference.

“I prefer to hire patriots, not mercenaries,” Dimon declared, referring to students who join his firm while already secured in another position. “It’s inappropriate to force someone to contemplate their next career move before they’ve experienced what any one company offers.”

Following JPMorgan’s lead, Goldman and other major banks announced measures to mitigate early commitments, which included routinely inquiring with analysts about other job acceptances or terminating employees who had accepted such offers. Consequently, some private equity firms, such as Apollo Global Management and General Atlantic, have decided to refrain from extending offers for positions slated to begin in 2027.

Solomon admitted last week that he is unsure if “we’ve fully resolved” the challenge but does not have a clear solution in mind.