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Cowen Case Study Essay

1 Introduction

SG Cowen, located in the United States, is an industrial company established in July 1988. Orientated in the financial sector, SG Cowen constituted a hiring approach containing diverse steps with methods, approaches and decision criteria. To asses the job applicants and to make a decision about the most eligible candidates, we have created a standardized construct to quantify the criteria.

2 The recruiting process

The recruiting procedure starts with an on-campus recruiting program by arranging team captains to these core business schools. Thereby students get the opportunity to know SG Cowen. To ensure that thoroughly, they assign one member who is the first contact person for interested students. SG Cowen certrainly tries to attract other students from noncore schools by accepting their resumes. Another resource to recruit new candidates is pre-existing, experienced analysts who get promoted without attending the university. Afterwards there is a process that supports the decision making approach of SG Cowen by going through the following steps: Informational interviews, On Campus round, and Super Saturday.


Informational interviews

Chip Rae, the director of recruiting at SG Cowen is convinced that an ambitious student, compared to others, will emphasize his interest in the company to determine the attitude of a student. That’s the reason why SG Cowen invites students to visit the workplace, to experience the entrepreneurial culture and to get a basic overview of the company and its atmosphere. This process is not evaluative but it’s a chance to create an initial perception about a potential candidate. Conversely, students get the opportunity to show themselves, to leave a positive impression and to be prepared for the feasible first round. Therefore this step is important to find out how serious or not a candidate is.


On-campus round

The second step is the on-campus round which enables SG Cowen to learn a candidate’s requried set of skills and determine its surplus value to the company. For the final validation, various candidates participate in the on campus round. Rae estimates that experienced senior associates who have a profound knowledge of the necessary requirements needed for the jobs, should be integrated in the final interviews. They are able to appraise the candidate’s skills and requirements in an appropriate way. In addition Ray believes that success doesn’t come from defined methodologies, rather it’s more important to love the job and the challenge, so SG Cowen promotes longer working horurs and less outside distractions.


Super Saturday

After a shortlist is created from the on-campus round, 30 candidates receive callbacks for the final interviews. Each of them gets five half an hour interviews with senior employees of SG Cowen with a list of goals needed. Gregg Schoenberg, team captain at Johnson School of Business at Cornell believes that selecting criteria about the right candidate should be the candidate’s personality, less what he has done. So it makes sense to look at candidate’s former job performance. The candidate’s attitude towards the company is important for the interviewer as well as for the company regarding the banking sectory, which discloses great turnovers.

Kim Fennebresque (CEO of SG Cowen) says that an employee should like the job he or she does. Concentraiting on technology and emerging markets, the potential associates of SG Cowen should have advanced knowledge in finance area and the ability to execute that. The job also demands high teamwork abilities, multiplicity, responsibility and flexibility. Therefore interpersonal skills are unalterable. Before this recruitment process begins, the company should determine the potential business schools to plan the presentation area on campus and also the positions that must be occupied. At long last, the company should know the time schedule and the amount of interviewers needed.

SG Cowen has three different kinds of talent pools to find candidates that fit best in their company. The following chapter reviews and evaluates their recruitment process and describes the different types and sources of candidates they have. Candidates have the possibility either to complete three years at the firm as analysts or take part in the companies’ summer internships to be offered a vacancy. Candidates, who are promoted as analysts have for the most part no education from business schools. This source of internal recruiting offers the possibility to use internal job postings or just communicate the vacancy, instead of paying for on-campus presentations, recruiting events or advertising – therefore it is cheaper to promote people who are already familiar with the company and have already shown that they properly fit in it.

The alternative is external recruiting, which focuses on the hiring of candidates from business schools. SG Cowen has multiple different core schools to which they have direct contact and offers them the possibility to communicate and provide possible hires with all the information they need, through company presentations or participating in the on-campus recruiting programs.

The possibility to additionally take part in informational reviews is a good way for students to show their enthusiasm and how serious they are to get the job. At every school that SG Cowen recruits at on-campus, a team captain is assigned to provide students with a constant and familiar point of contact. The fact that these team captains are banking professionals and not human resource professionals makes them able to provide students with the information they are really looking for, but on the other hand they may be mainly looking for skills instead of personality and personal background of applicants. SG Cowen also accepts applications of candidates from non-core schools, but these candidates have a disadvantage in showing their interest and gathering information about the job. Schoenberg, who was not attending a core school described this as unfair, but describes them as great hires because they need to show more initiative, be more focused and invest more effort. All in all, these internal and external resources provide SG Cowen with a good and wide pool of possible candidates, however there is the risk to have students with less variety when only focusing on core school applicants.

After résumés are collected and interviews are conducted the senior and interviewing associates have to reduce the amount of possible candidates, who can take further part in the process. This reduction could already lead to the loss of some very good applicants. Then the following on-campus round tests the cultural fit and is intended to preselect candidates for Super Saturday. On Super Saturday each applicant has multiple interviews with different bankers of the firm. These managing directors then decide for themselves whether the candidate is a good fit for the company, but this way of evaluating can result in big disagreements and disadvantages. One director may see the great attitude of an applicant as more important than his technical skills, while another would take the opposite opinion. The worst scenario for applicants would be the different personal opinions of the directors leading to a false estimation and result in disqualification of the candidate.

Afterwards, there are group decisions. The biggest problem of these decisions is that interviewers already have their impression of the applicant and it is often difficult to convince them of the contrary. Often the majority of directors vote similar, so there might be no way to discuss the outcome, if one thinks he has a candidate who is a perfect fit for the company. To summarize, it can be said that the hiring process of SG Cowen makes sure that new employees fit well and that they only want to get the best talents for their company. The evaluation of the candidate’s abilities in form of notes is a great way of remembering each candidate and to make sure everybody can participate in the following group discussions to represent his opinion about the applicant. Besides the disadvantages of non-core to core business schools this ensures that the recruiting process is fair because every applicant who participates on Super Saturday has equal chances to be offered the vacancy.

The possibility to offer vacancies to people who completed an internship and analysts is also a very good alternative to hiring people from external resources because they know the company very well and have already proven to be a good cultural fit, they have learned a lot about SG Cowen and are acquainted with the current employees. In contrary SG Cowen has to contact previous employers to get to know external candidates and check if the provided information is accurate. We think the super Saturday is a bit hard for candidates as well as interviewers. The fact that there are multiple interviews distributed throughout the whole day seems very exhausting and we think it is hard to make the right decisions at the end of such a hard day of work. Also there is no guarantee that the applicant accepts the job offer. They might have other possible job offers, which they would rather like to accept and this would result in a high risk for SG Cowen regarding that they only have a fixed number of vacancies and try to fill all of them.

SG Cowen declined candidates for low technical skills, so it is very important for candidates to have this skill. Therefore the knowledge of Finance & Accounting, Prioritizing, Creativitiy and Modeling are mandatory for our applicants. Our Group takes the same opinion as the company, because the training process after the recruiting would be long and expensive. Furthermore we support the decision that candidates with low skills can be eliminated earlier. In the present time work ethic is an important factor for employees, especially for a boutique Investment Bank like SG Cowen, where teamworking is invitable. This expects also a certain level of flexibility and work motivation.

The statement of Fennebresque – “The type of person who does well here doesn’t want to be told what to do. He or she is far less regimented. This is not the Navy. We want the self-starter” – shows that SG Cowen appreciates leadership. A candidate can show his/her leadership skills from previous work. Interpersonal skills are relevant in businesses, where there is a high level of contact to client and associates. Good verbal communition is especially necessary for the candidates, which should be taken with serious impact/presence.

Like the most companies of the world SG Cowen wants to hire the candidates for the longterm. The best Investment banking talents are highly coveted and hard-fought in the job market. So there is a high probability that the employee could be courted from other banks. Thus it seems it is useful to estimate the commitment to the firm. The Bankers have to make a lot of decision through their professional life. The characteristics of judgment and maturity are an important criteria. In our Opinion is the utilization of this factor is appropriate. Nevertheless we have an improvement suggestion for the evaluation form. It is possible that all of the interviewer priotize the factors different. Therefore we recommend a strandarized model with fixed priotization for each skill.

To Change from a subjective evaluation to a standardized and objective evaluation, we set the emphasis for the factors. The emphasis is based on our analysis of the recruiting process, the statement of Chip Rae and the evaluation form. The technical skills in the business of investment banking are a critical requirement. SG Cowen has a competitive advantage with their core competency from research. This is the reason that technical skills should get the highest  weight (35%). SG Cowen is a small boutique company, so the candidate needs to show good teamwork and also should have a high motivation to enter the company. From this reason we have given the factor work ethic 20%.

Leadership is a very important criterion. As we can see in the last years, the market is changes fast and steadly. Therefore SG Cowen needs employees who can learn very fast and are self-starters. This could be picked up on the statements of Schoendberg and Fennebresque. Interpersonal skills complement andsupport the factor Leadership. Because somebody, who can learn very fast and has also awfully good communication skills, could be assumed responsible. So we gave each of the criteria 15 %. At the end are the judgment/maturity criteria. The Banker has a lot of situations, where they have to decide. So it is also important to have a particular skill of judgment, but it is our opinion the least important criteria in this evaluation form. We gave these criteria a weight of 5 %. Further details to the criteria can be found in the Appendix.

Evaluation of the four candidates

Through the interviewing-process, four candidates were categorized as “maybes”, so their pros and their cons were pretty much balanced. Just two of these four candidates can be selected, because SG Cowen has only has two additional jobs left to offer. To make a reasonable decision we decided to rate them using the linear model. In this model we used the weights mentioned above according to different parameters to develop a scorecard for each of the remaining candidates.

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