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You make a fair point, given what was in the article. I think one interesting thing that the article left out is that the situation has actually changed a fair amount in the last decade. Around, say, 2002-2006, second year banking associates (and sometimes management consultants) interviewed in the spring (~18 months into their banking job) for PE jobs starting that fall - around 3-4 months early. This seems pretty normal. But an arms race started, and in 2006-2007, interviews were happening in January. In 2008, headhunters joked that soon they'd be interviewing candidates a few months after they started, and then that's exactly what happened. The next year, they started in December, then October or November, and they continued to go earlier until the current state where they interview after 6 months on the job for a new job 15-18 months away. So, it's worth noting how much it changed in a fairly short time frame. I think this must have to do with the number of PE firms that exist now compared to 2000 - back then, there was no point to interview early because no one else would swoop in and get your candidate. Also funny is that it's all somewhat based on a notion that all candidates vary on one dimension of "quality," that the "best" candidates will be gone if your firm doesn't try to snap them up now, and furthermore, that you'll be able to figure out who the "best" candidates are at that stage. It's a classic coordination failure - even given how silly that premise is, and even though the resulting situation is so obviously crazy to all involved, it continues to occur, because that's how the incentives line up. What's also interesting is that there's no clear way to change things. Coordination failures are often fixed by governments, when the situation is important enough (this hardly qualifies). College admissions solves this by tacitly agreeing to have everyone apply the same time every year. Of course, some colleges tried to beat this with "early decision" and "early action," which conceivably could have continued like this did (with applications starting in junior year, etc.). But it seems there's some combination of respect for the process, decorum, etc., that prevented it. Plus, once a group of the "top" schools decided to eliminate the early decision/action process, the decision stuck (for a while at least - it appears to have come back) . In that case, there was a fairly agreed upon list of "top schools" that could set the terms, given most students would be willing to wait and apply there. But with PE firms, most candidates would be willing to take a job with a middle market fund (and make a looot of money) rather than gamble on a bigger fund (assuming those are more desirable, which isn't always the case). I suppose that things could change if banks got stricter around things (as they're trying to), or if all PE firms could agree (if that's even legal...?), but it's not an easy solve. Of course, no one will be throwing a pity party for anyone involved. The banks, PE firms, candidates, and headhunters will all be fine. Still, it's a funny situation to watch, in a "how can that really be happening?!" sort of way. |