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Career Options after MBA Finance

admin — Sat, 20 Aug 2016 22:31:21 +0000

Figure 1: Glasbergen cartoon on money

“Once upon a time in MBA Finance”

Three finance professionals, Mr. QuickMath, Mr. Stats and Mr. Banks came happened to be travelling together and got into a discussion about their jobs and education.

“I am a trader at HugeMoney, and I’m an expert at currencies! I started my journey with an MBA Finance degree from WOW College”, said Mr. QuickMath

“It started with an MBA Finance degree for me as well!” exclaimed Mr. Stats, who was a risk analyst at GiganticFin Inc.

“I knew I wanted a high profile bank job, and therefore I worked hard to get into Fantastic Finance Institute for an MBA, and I landed a wealth management job at BankoftheWorld. This is not surprising, a number of my friends such as Mr. Policies, Mr. Projects and Mr. CorpFin all started out with a management degree in Finance”, concluded Mr. Banks.

The moral of the story is that an MBA in Finance is a great start, but not everything you ever need.

The meaning of “MBA Finance”

There are a number of certifications/degrees out there for one aspiring to be a finance professional. Why should you choose to be an MBA Finance? Why not a CA, CFA, FRM, etc.?

The best way to resolve this quandary is to use the allegory of a lake. There are lakes that are very wide, but not too deep, and there are lakes that are not so wide but very deep. Choosing to be an MBA Finance is choosing to be a wide lake with limited depth.

Is that a bad thing? Absolutely not! The right way to look at it is this, while a CA might have tremendous knowledge of accounts, taxation and auditing domains, an MBA has a limited but diverse exposure to these as well as numerous other domains such as financial operations, mergers & acquisitions, capital markets, international finance, wealth management, trading, financial operations, policy making and regulatory compliance to name a few.

A discussion with an MBA is more likely to have a management perspective, with a focus on how things are organized and executed in practice, rather than just the technical aspects of the various branches.

Further, getting the degree is just the beginning of the journey. It opens a number of gateways for you to explore and you can choose a domain of your choice and pursue further education, specialized and relevant to that domain.

PRAQTISE Fact File: More than 50% of finance students in top b-schools prepare for certifications such as CFA, FRM, CMA in parallel to their regular curriculum. This is essential for landing a job as per one’s preference.

The recruiter’s perspective – a hard reality

A PRAQTICAL Look- Reality Check 1: A number of premier global organizations, across investment banks and accounting/audit firms offer better jobs (in terms of both profile and pay) to IITians and engineering grads from similar revered institutes than they do to MBA Finance grads.

Yes, something that they should have told you before you registered for an entrance exam for MBA. One can verify this easily by talking to students on the verge of graduating from IITs. The companies even pamper them with the option of sponsoring their higher studies. The simple reason is that they value numerical ability over all else. In an IITian, or a similarly qualified engineering graduate, they get a person with supreme quantitative aptitude.

A PRAQTICAL Look – Reality Check 2: Many reputed companies arrive at the campus with decent offers, but they are not really finance jobs, not the ones you thought you would get while you were studying your course.

True, as far as the recruiter is concerned, the pool of applicants comprises of people who have been introduced to the broad contours of the financial world, with a coursework having management at its core and not specific technical expertise. Therefore, the jobs are more likely to be in financial operations, sales, information management for market information providers such as Bloomberg, etc. The syllabus studied by a finance student is not always essential or relevant to these jobs.

PRAQTISE Fact File: Most of the iconic organizations like JP Morgan, Deutsche Bank, Barclays, etc. visit campuses with jobs for MBA that invite applications from all streams (MBA in IT, operations, etc.) and not just finance.

A PRAQTICAL Look – Reality Check 3: Those recruiters who do offer core finance jobs at b-schools usually pick candidates who have/are working towards certifications such as CFA, FRM, etc.

Indeed, when a recruiter is genuinely looking to hire for roles such as equity research, corporate finance or M&A advisory, they seek out candidates with subject matter expertise. Students having the above mentioned certifications, or even those who are working towards them (those who have cleared the initial levels) definitely have an edge over those who relied on the college finance syllabus to get through. The screening tests are sophisticated enough to require in-depth knowledge, one that is difficult to achieve by simply sticking to the average MBA syllabus.

The takeaway is that one should remember that while having the degree does open up many doors, these MBA jobs might not necessarily be the opportunities you aspired for. One has to arm himself/herself with the desired skills and qualifications (quantitative aptitude & certifications) if one is serious about getting into the right profile. The intense competition for such profiles means that there is not running away from this.

The finance world- what are the entry points

To identify where prospective job openings might lie, it is better to have an overview of the financial marketplace.

Figure 2: Financial system and market participants

The following table can now serve as a useful guide to the job opportunities one can expect after an MBA in Finance:

Type of Organization	Category	Domain of work	Job Roles
Manufacturing, Pharma, FMCG etc	Non BFSI	Corporate Finance	Capital Budgeting, Working Capital Management, Liquidity, Treasury
Banks, Financial Institues – Core jobs	BFSI	Commercial Banking, Investment Banking	Portfolio Management, Asset-Liability Management, Treasury, Mergers & Acquisitions Advisory, Cash management, Front Office
Banks, Financial Institues – non-core jobs	BFSI	Financial Operations, Financial Services	Fund Accounting, Custody, Back Office, Sales of basic products (loan offers, credit cards etc.), CRM
Financial Information Providers(ex. Bloomberg, Reuters)	News & Media Companies	Data Analysis, Reporting, Account Management	News, Market Updates, Reporting, Presentation, Account Management
RBI, SEBI	Government Entities & Regulatory Bodies	Defined roles which are also open to general public	Offer the same roles for which general selection procedure is also in place (ex. Grade B officer for RBI)

To conclude, finance careers are highly rewarding but also highly demanding. An MBA in Finance is a great start, but that is how it should be viewed. An aspiring finance professional would be better placed if he/she does the necessary background research in terms of the desired domain and how have people achieved it in the past.

What do you think about the scope of MBA Finance? Let us know your views in the comments section.

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Top B Schools in India: Placement Figures of 2016

Praqtise — Fri, 19 Aug 2016 15:38:40 +0000

“Placement day at a top b school in India”

I stared into the darkness as its fascinating sight and aroma beckoned me closer and closer to explore its depths. As the sheer flavour of the liquid rose in the form of vapour and engulfed my nostrils, I lost all my inhibitions. With wild abandon, I pressed my lips to the edge of the cup and embraced the blistering hot concoction as it numbed my tongue with its heat. Soon, the heat faded, and the malted taste slithered over my taste buds as I reveled in silent ecstasy.

“Dude, you have been staring at that coffee for a long time! I have to rush,” remarked my friend as he pulled the coat over his shoulder and his tie hung loose from his neck.

“Ah, it’s your big day brother!” I retorted in my coffee-laden impulsiveness.

“Well, one of the many big days. These people somehow seem to have some kind of repulsion towards me. Microsoft probably did not like my hair, while Cognizant may have found the beard a bit too much.”

“Why do you say that, my friend?” I remarked as I prepared myself for another coffee-induced moment of ecstasy.

“Well, I am not sure what the problem is. I am a nice guy! I mean, I might have bunked a few classes here and there, and a few semester exams, but I love technology man. You remember Poko, right! Man, she was my baby! I spent three weeks crafting that robot dog of mine. But no, these companies want something more, it seems. I’m just not able to figure it out.”

“Well, that is why I opted for the financial sector. You can play your way around them with smooth talk and finesse. The technology buffs need to know your technical skills so they might not go for freeloaders like you.”

As I watched him struggle with the tie, I offered him one last piece of advice before he went for the interview. “Brother, take Poko with you. She might impress them!”

“I sold her bro, part by part. Had to pay for the fees, man,” he screamed as he rushed off into the pale grey building.

As I mulled over the coffee, I could not help but think about the entire placement scenario. This propelled me deeper into the prospect of understanding this intricate process. Thus, began an eventful day.

A comparative case-study of top B Schools in India:

I started pondering over my friend’s lament and tried to understand what exactly I was missing out on. My research led me to a point where the only way forward was to go “full-statistical” with my concerns. When in doubt, go mathematical on that pesky little question that just refuses to fade. This is what I found through my travels into the statistical depths of placements at top MBA colleges in India.

Well, by the looks of these figures, I was left a bit spellbound. I felt like I was somehow viewing only half of the picture. This urged me to dig deeper and understand the changing trends in the placement scenario. Just to give you an insight into the world of placements, let me tell you a small but alarming fact:

PRAQTISE Fact File: According to a survey conducted by the website mbauniverse.com, it was seen that as far as average salary is concerned, most institutes are lying to us. According to the website, most institutes, including the best ones, mix both foreign as well as domestic placement figures to inflate the average salary figure. What this means is that by clubbing foreign salary estimates which are converted to rupees, in the end, the institutes can showcase much higher figures than the actual estimates. This is usually a gimmick used by most institutions to garner media attention.

This fact took me a bit aback, as I reeled back to my friend’s lament. He was an outlier but he had thoroughly grasped the CAT syllabus and exceled his way into this institute with great performances in various MBA entrance exams. The important element in this particular case was that I needed a more solid piece of evidence that could help me understand the trends of average salaries in top b schools in India. So, I decided to use the figures mentioned above to check the percentage increase in average CTC from 2015 to 2016. This way I had a more concrete basis for comparison. Here’s the analysis for you in a glimpse:

Name of the Institute	% increase in average CTC
IIM-A	NA
IIM-B	23.71
IIM-C	11.64
XLRI	8.82
FMS, Delhi	20.31
IIM-K	14.61
IIM, Rohtak	0.34
JBIMS	4.08
IIM, TRICHY	0.00
SPJIMR, Mumbai	5.60
NMIMS, Mumbai	3.51
IIM, Raipur	9.64
SIBM, Pune	9.04
IMI, Delhi	51.83

On this note, I found a direct contradiction to the start of our conversation. In almost all cases, the colleges that I had researched about had seen an increase in the average salary. This meant a direct increase in the quality and number of placements as well. Somehow, my friend’s lament seemed a bit misguided here, owing to the fact that there was a definite increase in the scope of getting placed, at least for the top b schools in India.

A PRAQTICAL Look: Most people consider placements to be a time when you have to put on your best attire and have a whole folder full of achievements, along with more than one personality development books in your bag. However, sometimes all you need is the passion for your realm of study. For instance, a student from NIT Trichy, named Aanand Srinivas talked about a friend of his who got placed into his dream automobile company, even though the entire campus had labeled him as an outlaw. He was an individual who was more inclined towards watching races and taking apart automobiles, than rote learning from engineering books like the others.

The case of this passionate student gave me a whole new perspective towards the conversation that sparked my research into placements in the first place. My friend also seemed to fit into this same category of outlaws, who have no hope of surviving any placement process. The immense stigma associated with this may have caused him to develop the lamenting perspective that he carried around. It’s a good thing that companies have also started to pay heed to outlaws and unconventional students.

As more and more companies are expanding their avenues in terms of eligibility, one cannot help but wonder how the placement process will evolve in the future. The trend for now shows that there is security in terms of placements for intellectual experts as well as for outlaws & freeloaders at top B-schools.

What do you think about the recent placement trends for MBA courses? Share your opinions in the comment section.

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Image Sources: [1] [2] [3]

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MBA Jobs: Start-up v/s MNC

Praqtise — Fri, 19 Aug 2016 15:07:18 +0000

“The usual and the exciting MBA jobs”

“Hi! My name is Mr. Usual. I’m a market research associate at MNC Corp. I have a desk, wear a business suit, groom myself and do a number of things in accordance with company policy. My vacations are well planned and I follow a schedule. This would make my life seem ordinary, but that would be stereotyping.

Do I wish to work in a new venture? Only if it is more rewarding than my current role, as I’m quite HAPPY with what I do.“

“Hola! I’m Mr. Exciting! I’m the market intelligence guru at Start-up Inc. A bean bag is my desk; I wear flip-flops and even track pants to work sometimes. I speak through my hair and my beard and I can be seen doing fun things, like a trek or an off-road trip, almost every weekend.

Would I switch over to a large company even if it meant giving up some of these liberties? If it allows me to do what I love in a better way, then YES!”

Mr. Usual and Mr. Exciting both agree that work is not about getting to grow your hair, but doing your bit in making the world a better place.

Each generation has its obsessions. The generation of people born in the 1980s always pointed out the fervent admiration that those from previous generations seemed to have for Government jobs. Yes, Government jobs are still coveted, but the phrase ‘MBA jobs’ was more likely to throw up images of people working at an MNC for the 80s crowd. This too has changed, and for the past 5-7 years start-ups seem to be the centerpiece of economic activity and thus start-up jobs have been getting truckloads of attention. People have started to chart out their MBA careers in a unique way.

Figure 1: Start-up employee vs MNC employee

Start-up & MNC- The same business entity in different stages of metamorphosis

To kick-off the discussion in neutral territory, let’s start by speaking out some obvious things:

Every MNC was once a start-up
Every start-up is trying to be an MNC

Statement no.2 might be quite controversial; some start-ups seem to thrive on not having a ‘corporate’ culture. However, everyone wants to grow and be at the top, and even though a start-up might not want to be an ‘MNC’ culturally, it will end up being one if it reaches the desired scale and scope of business activity.

Unless of course, you are a firm believer in a more socialist form of society and would seek a job at some corporations that have those principles at their core. There are a few organizations who work this way, but it is far from being the most prominent species of vocation available for a job seeker.

PRAQTISE Fact File: According to industry experts, startups face an attrition rate of 30% among mid-level employees and 40-50% among junior level employees for after MBA jobs.

How do I choose between a start-up and an MNC?

When we ponder the question ‘Which would be a better place to work?’, we are actually asking which of these would be more rewarding for us professionally. Let’s fall back on some words of wisdom by renowned bestselling author Malcolm Gladwell. This is what he said in his book ‘Outliers-The Story of Success’:

“Those three things – autonomy, complexity, and a connection between effort and reward – are, most people will agree, the three qualities that work has to have if it is to be satisfying.”

Autonomy- Will you have the power to make your own decisions?

Complexity- Will the nature of work be intellectually stimulating?

A connection between effort and reward- Will an increase in input have a corresponding effect on output?

Those three are very solid criteria to evaluate one’s job. One might come across generalizations, stating that a start-up would score better on all three parameters. It is not so simple. A number of start-ups depend on crawling the web and cold calling for generating leads, would a person performing these mundane activities necessarily feel empowered?

The idea is to evaluate the job and not the place of work to come up with a preference and this can be adopted as a first step for assessing prospective jobs after MBA. This is a completely different competitive reality than the one faced during the MBA entrance exams or even MBA exams.

Figure 2: Pros and cons of a start-up job

MBA Jobs: A Marriage of Convenience

The factors mentioned above are among the more luxurious criteria while seeking employment. Financial obligations and/or lack of opportunity are generally more dominant determinants of where you end up working.

Ask the average MBA graduate heading in to placement season, he/she is more concerned about the upcoming EMIs than uniting his/her vocation and avocation. What about someone who wants to pursue aerospace engineering, a field where opportunities are unevenly distributed on the scale of nations and not just regions? In each of these cases, the candidate would go for the best possible solution to his needs, irrespective of whether it is a start-up or an MNC.

A PRAQTICAL Look: A dynamic and changing work environment might seem to be an exciting factor while choosing a company; it might not always work out in the employees favour. A number of Indian startups (Housing.com, TinyOwl to name a few) have let employees go because of business restructuring decisions. The impact is equivalent to an established large corporation shutting down on of its operating units.

Where do we go now?

We can create an approach for choosing the right organization. Let’s take it step by step:

Trace the career path of 10 individuals who you aspire to be like professionally. You might be surprised at how they went about reaching the sweet spot.
Narrow down the values that matter most to you. Do you prioritise work above all else or are you an ardent believer in work-life balance? How important is integrity? What are the lines you would not cross when working for a company?
Don’t just plan for the job you want, but the also the job you need to go through to get to the job you want. Your next job, despite being far from ideal can still be the one leads to your dream job. This piece of wisdom has an unlikely source, the movie ‘Transformers: Dark of the Moon’.
Be prepared for a leap of faith. You might need to do something revolutionary to get where you want to be. Try and join a rival firm or take a break for getting a prized educational qualification.

Where would you rather work – Google or Zomato? JP Morgan or Paytm? Which company would teach you more? Which has better prospects of growth? What are you looking for in your next job role? The latter are better questions to find an answer to rather than worrying about what label applies to the organization being considered.

Image sources: [1] [2]

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