How Wall Street altered summer programs, pushed hiring dates and then compensated for it

Most advisory firms have stuck to either deferring or shortening their summer programs while still paying for the full term.

In one way, this year’s crop of summer interns at investment banks are unlucky – they won’t get the experience of working in an office, many programs are being cut short and, in some cases, internship offers have been rescinded.

On the other hand, several institutions are compensating this year’s interns by pledging to make them full-time offers once they graduate, sources told PE Hub in recent interviews.

Investment bank William Blair, for example, is offering all its summer interns full-time jobs upon graduation. This is an extraordinary offer from the firm, but it’s an adjustment to an unusual situation.

The 60 interns at William Blair are working virtually from June 15 for less than 10 weeks – a shorter duration than normal – and will miss out on social events and other networking opportunities, thanks to covid-19.

The investment bank believes making the summer analysts a full-time offer makes up for their inability to come into the office this summer, a source told PE Hub.

“The internship is virtual and it’s not the exact same internship that they would have had,” the source added.

Much like William Blair, all 100 Moelis & Co interns starting in July will get full-time job offers upon completion of the training.

The rationale is that banks, generally, extend offers to a high percentage of summer interns anyway, so this becomes a continuation of their normal structure, according to a source close to Moelis.

In April, Citi sent out a memo announcing plans to extend full-time job offers to 75 percent of summer interns. The US bank also halved its 10-week program and pushed it to July 6 from early June.

Speaking specifically on the capital market advisory program, Citi said in an interview, “We know there’s been a lot of uncertainty and some internships have been outright canceled, we wanted to make sure we didn’t do that.”

In March, Forbes reported that management consulting firm L.E.K rescinded its summer internship offers. A source in a competing firm later told PE Hub that L.E.K extended full-time offers for 2021 to compensate for the canceled internships. The firm did not respond to a request for comment.

“Some firms believe the business is still going soft so if there is not enough [M&A] activity to give to the summers maybe it is better to cancel,” the source from the competing firm said.

Full pay

Most advisory firms have stuck to either deferring or shortening their summer programs while still paying for the full term.

At Harris Williams, interns starting June 29 will have six weeks as opposed to the regular 10 weeks at the firm, but summer associates and analysts will be paid even for the weeks they have been asked to skip.

“We felt 10 weeks of staring at the screen would be a little bit too much,” said Lane Hopkins, managing director and chief talent officer at Harris Williams. “The duration would be effective for them to know us and get a good sense of the firm’s culture.”

Likewise, Goldman Sachs is also paying its interns not to work. The New York headquartered company revised its start date to July 6 and halved the summer program to five weeks.

“We intend to honor the full financial commitment of the original program duration,” said Goldman Sachs in an emailed response.

While Goldman hasn’t extended any full-time job offers, it intends on remaining actively engaged with students in the fall even if they are not able to go back to campus. “Our first-round interviews already take place by video.”

The investment banking firm, Greenhill & Co., Inc. is also putting the summer interns on a slightly delayed schedule and shortening the internships.

“[We are] incorporating more virtual experiences where necessary because of offices being closed,” said COO of investment banking, Patrick J. Suehnholz. For the fall, Greenhill anticipates recruiting to be fully virtual.

Elsewhere, Deloitte shrunk its hotly contested eight-to-12-weeks long internship into a two-week virtual program, according to a source at the company.

In addition, the start date of new campus hires has been pushed to November and January. “They are keeping hiring promises,” said the source, adding that promotions at the consulting giant have also been pushed by a month to July.

Deloitte did not respond to specific questions on its hiring or internships but confirmed a shortened internship timeline.

Orientation

On-boarding new hires in the covid environment is another hitch for banks, advisory firms, and consultancies alike.

All full-time fresh graduates will start at Citi on August 10 – a slight delay for some. Pay periods for all graduates will begin on the deferred start date.

Harris Williams pushed the start date of its incoming cohort by two months in the hopes of having them start in-person. The new hires will now start on September 8 and recruiters at the investment bank are attempting to accommodate the financial needs of these fresh graduates, Hopkins said.

Deloitte and Harris Williams are not the only ones trying to make up for pushing the on-boarding dates. Evercore offered graduates $25,000 to delay their start date for a year and $15,000 if they agreed to defer it until January, as reported by Bloomberg early this month.

Incentives come into play to offset the financial burden advisory firms are suddenly putting on new graduates who expected to start this summer.

“Now they have graduated in June and they may not get their first paycheck,” said a source responsible for undergrad recruiting at one of the prominent Wall Street firms. “So, the concern is how to provide for them.”

Much like other firms, Cain Brothers’ summer analyst program, which was slated to start in late May, began this week. It will only go on for seven weeks as opposed to the regular 10-week intensive program.

Among private equity firms, Carlyle Group is said to have its 10-week summer internship and new hire on-boarding plans still on track, according to a person close to the firm.

Generally, among advisory firms, there is a recognition that the experience interns are going to have will be a little different – thanks to everything being virtual.

“Mentorship [will be a] challenge in a remote environment,” said a source from a boutique investment banking firm. Interns cannot just lean over and ask someone who has done this before, he added.

“What I’ve heard is that the elite boutiques are under a lot of pressure,” said the same source talking about how a firm’s financial health governs what it does with its internship program. “It’s dependent on the M&A revenue.”

Action Item: Check out this reddit thread on summer internships.