On the one hand, potential high-fliers regard the offer of graduate training as a distinguishing factor among investment banks. But on the other, the enormous growth in graduate recruitment has created a logistical - and cost - problem for many investment bank training departments.
'Training is a big factor in making sure that the person at graduate level comes on board. Marginal differences will make analysts choose the bank with the strong training programme as this determines how well-equipped the employee will be in a year or two,' says the head of training at a bulge-bracket bank.
After an initial induction process, this bank offers short modular courses for the first two years of an analyst's working life, keeping a close eye on the graduate's development. Alongside graduate training, it also offers technical skills training further up the ladder, as well as lateral hires. However, the bank expects the number of lateral hires to come down this year, with a corresponding increase in emphasis on skills training.
Chase Manhattan Bank is also said by experts in the field to be very strong on its analyst training, delivered in-house. At some of the largest and best-known investment banks there is also currently a heavy emphasis on in-house integrated training. Driven by the perceived need for better retention policies, in-house training is often seen as a means of establishing a specific culture and greater bonding between the organisation's employees at all levels.
At JP Morgan, which is widely recognised as having developed one of the best internal training programmes for the market, the bulk of training undertaken for its graduate intake has been in-house.
Malcolm Beane, a managing director of human resources at JP Morgan, says that the investment bank sees such training as crucial to the development of employee relationships within the context of a global culture.
While JP Morgan has spoken of the need for cost savings as it merges with Chase Manhattan, Beane remains quietly confident that training within the merged entity will remain a priority.
'We don't anticipate making savings by lessening our investment in people and in the high-level pipeline. A training programme develops a strong internal culture that can be mixed with external expertise, and so tap the market in a structured way,' says Beane.
He believes that while it may be a mistake to compete with the market when it comes to hard skills, the soft skills and bonding that occur in a graduate programme are very important to teamwork and leadership training, making a good argument for retaining such in-house training.
Goldman Sachs recently hired the dean of Insead, the prestigious European business school, and is reported to be working on in-house leadership training under his direction.
Others involved in financial training agree that a graduate programme can help instil a global approach to problem-solving. 'There is no doubt that, as far as getting the right people is concerned, training programmes are vital. Those banks that recognise it are well ahead in the game,' says Peter Wisher, who heads training at the bespoke financial training provider, BG Training.
At Deutsche Bank, Jane Houzer looks after training for the UK investment bank's employees and all its graduates globally. She says: 'We are using training as a knowledge-management mechanism, and looking at optimising in-house knowledge. For graduates, the first couple of years involve learning all the hard skills, but very few of the outside exams are appropriate, so we have our own schemes in-house.'
Deutsche Bank is said by outside trainers to be trying to integrate more of its line and business requirements into its graduate training programmes this year, and to be looking to its line managers to make the issues come alive. Houzer says several events have been organised to ensure in-house leadership works as well as product focus and the hard edge of training does.
But as they continue to grow into mega-banks, all these institutions face a common problem of numbers and rising costs. Investment banks - particularly the American ones - have tended to fly graduates to their headquarters for training and a chance to place their cultural stamp on them. However, despite their appeal to graduates, these programmes appear to be falling away at many institutions that are now watching costs. Morgan Stanley Dean Witter, Deutsche Bank and Lehman Brothers all use more regional training programmes than they did in the past.
But if training is becoming more regional, the increase in the number of graduates has meant that there is no pause so far in the trend to outsource training. 'When you are talking of class sizes of between 150-350 people it becomes a question of working out what works best from the training point of view. The numbers are such that you have to think of all the options - over the next five years everyone is likely to be using the internet and distance learning,' says the head of training at a bulge-bracket bank.
Not everyone agrees with that assessment. At the Dutch investment bank ABN Amro, all graduates in the entry-level programme first spend 13 weeks in hands-on interactive training. The groups involve between 18 and 25 students at a time, with the programmes running throughout the year in Amsterdam, Singapore and Chicago.
Amsterdam-based Jaap Van Poelgeest, the senior vice-president in charge of training at ABN Amro, says: 'There is no doubt how much difference nine to 10 months makes, rather than taking students straight from university. We give people a chance to develop. They also do a lot of self-learning with CD-Roms. But in testing whether people can do something with learned skills you nearly always need the classroom.'
For good trainers at the moment, geographical mobility is extremely important.
Jim Byrne of London-based niche financial training company FSMD (Financial Services Management Development) says: 'Banks still like to have people trained at head office and put their stamp on them. In global terms, we have to be able to work anywhere.'