Updated: Jun 21, 2020
While the death rates associated with the current Coronavirus pandemic seem to be subsiding in many parts of the world, and it would appear that here in the UK, we are past the peak, there is still a lot of uncertainty surrounding the future. One aspect of this is regarding summer finance internships. Normally, students apply for summer programmes with companies ranging from four-twelve weeks, with the opportunity to be interviewed for a full-time job at the end of the experience. The application process is notoriously challenging, especially as gaining an internship is essentially a fast-track route to being offered a permanent job. So, how have students and their internships been affected by COVID-19? Let’s find out…
Summer internships with finance companies are extremely competitive. At large firms such as J.P. Morgan, Goldman Sachs, Deloitte, and EY (just to name a few), candidates can be up against hundreds of other students for the same role. Justin Foulad, a student at UCL, shares his experience below: “I managed to gain two internships in Audit for EY and Deloitte this upcoming summer. The process was fairly similar to many other companies – it starts with an online situational judgment test, followed by a timed numerical reasoning test. If you pass both of those, you can proceed onto further, more advanced online tests. Success in these leads you to an online video interview. However, this is a one-way interview – the computer will ask you a question (such as why do you want to work in Audit/why did you apply for this company?) and you are given a limited amount of time to record an answer. The following round for me was an assessment centre, which consisted of group exercises, further assessments, and face-to-face interviews with partners at the company.”
So, after going through a challenging process to gain two summer placements, naturally, Justin was devastated when he found out recently that Deloitte had cancelled his internship due to growing concerns about Coronavirus and its potential long-lasting effects. Deloitte issued a statement earlier this week stating that it has scrapped its summer internship scheme in a bid to cut costs. However, “we are inviting students who were due to take part in the firm’s summer vacation scheme to take part in a voluntary four-week virtual mentorship programme instead.” Furthermore, the Big-Four company has offered successful candidates a £500 “goodwill payment,” although this is a fraction of what they were due to earn over the course of their internships. Finally, it seems likely that they will be fast-tracked next year for grad-scheme applications.
In terms of Justin’s EY internship, it has been cancelled. However, candidates have been offered the chance of an interview for the graduate scheme programme, skipping many of the earlier stages of the process.
Gabrielle Barmack is another student who had been offered two summer internships, and was due to be working with Standard Life Aberdeen (SLA) for ten weeks in the summer.
“I was due to work with SLA in their Edinburgh office as an Investment Analyst within the Multi Asset stream. While it is obviously disappointing that the internship won’t be going ahead this summer, communication from SLA has been great. I’ve received regular updates by email and phone call, and they have made the executive decision to postpone the internship programme until next summer. Thankfully, the company are also aiming to engage with the interns in the meantime by running panel discussions and a buddy programme.”
Justin and Gabrielle are not alone in their disappointment and frustration. Yet, in many ways, their futures seem more certain than some. Across the world, finance students have been left in a difficult position regarding their future. In a recent survey of over 900 students, 64% of those that had their internships cancelled were not provided with an alternative offer or compensation. 11% of students said that they have been offered a postponed internship; 7% said they were guaranteed a final-round interview next year; and 6% a full-time offer next year.
“Around a third of firms are expected to go ahead, a third are cancelling or reducing their internships and a third haven’t decided yet,” claimed Tristram Hooley, Chief Research Officer at the Institute of Student Employers, which surveyed its members last week. “I think a lot more internships at financial institutions will be cancelled because of the coronavirus.”
The future of graduating students remains a lingering and unanswered question. Some who received internships this summer that were cancelled will have a greater chance of securing a place on graduate schemes next year, but others will not. Many will have to go through the extensive and testing application process again, while some may have even lost faith. In the case that companies look to take on a graduate cohort next summer, will this be only from a pool of students who had secured a summer internship this summer? What happens to other graduating students? These daunting questions that could challenge the very core of recruitment within the global financial sector are echoed by Paul Clarke in FNLondon:
“Many are already drawing parallels between the impact of the 2008 financial crisis and the coronavirus pandemic on the banking sector. At the height of the 2008 crisis, investment banks reneged on offers handed out to incoming analysts, leaving thousands of graduates unemployed. Years later, banks faced a talent shortage in the middle ranks.”
Whatever happens, it is certain that this situation is almost unparalleled, and COVID-19 has wreaked havoc on the student population, as well as their future job prospects.
Do you have a summer internship placement this summer? Has it since been cancelled? I would love to hear from you if you had gained a place on a summer placement programme!