Recruiters are skittish and the job market is more competitive than ever, but career services directors say 2010 may be the year of the turnaround
This year's class of MBAs arrived on campus in September expecting a challenging fall recruiting season and now many are bracing themselves for an even tougher spring ahead. One of them is Aashini Shah, an MBA student looking for a job in the entertainment industry, who is feeling the pressure because most movie studios and entertainment companies don't hire until the spring. To get an edge, she's spent every spare moment she has networking with alumni, going on informational interviews, and keeping in touch with the contacts she made last summer, she says.
"It is slightly nerve-wracking now in the sense that there are only going to be so many positions available and that there are many people from the class of '09 that are still unemployed," says Shah, 29, a second-year student at the University of Southern California's Marshall School of Business (Marshall Full-Time MBA Profile), who interned at Disney (DIS) last summer. "Not only will you be vying with your own classmates, but you are vying with the class behind you for the same job."
With uncertainty about the economic recovery looming, students trying to secure full-time offers are entering a job climate that looks eerily similar to last year's brutal MBA job market, career services officers say. Compounding the problem, fewer second-year students came back this fall with full-time job offers from their internships, they say, making an already tight job market even more competitive. This fall, recruiters continued to shy away from campus and many are being cautious about hiring, according to a recent survey of 78 business schools by the MBA Career Services Council (MBA CSC), the umbrella group for business school career placement officers. Recruiting remains down, with 79% of schools reporting a decline in on-campus recruiting for full-time MBA jobs in the fall of 2009, the same number as the previous year. To assist students, career services officers are using many of the same tactics they used last year to dig up jobs. They're cold-calling recruiters, adding executives in residence to counsel MBAs, and tapping into alumni networks. Meanwhile, they're preparing students to seize on what they believe could be a last-minute flood of job opportunities that they expect will emerge closer to graduation.
At the same time, there are a number of signs that the MBA job market could improve, albeit slightly, in the coming months and a growing sense of optimism prevails among career services officers, says Kip Harrell, president of the MBA CSC. According to his group's survey, full-time MBA job postings appear to be rebounding; 34% of schools reported an increase in full-time postings this fall. And, perhaps even more important, fewer schools are reporting declines, with 48% of schools seeing a reduction in full-time postings, as compared with 70% of schools last year.
The still-shaky job market is a bitter pill for many MBA students, who came to B-school 18 months ago in the hope that the recession would be long gone by graduation and are now finding that it isn't. The surge in B-school applications at the start of the downturn was one of the biggest on record, as many fled the uncertainty of the job market for what they viewed as a surefire career boost and six-figure salary. Today, that all seems like a cruel joke, but on campus a fragile optimism prevails. "We are seeing signs that the economy is turning around, so the mood at business schools now is that everyone is waiting with lots of hope," says Harrell.
Another bright spot is that internship opportunities for first-year students may be bouncing back. In the survey by the MBA CSC, 31% of career services officers say they expect internship recruiting activity to be down, while 33% expect it to be up and 36% expect it to be flat. Last year at this time, 62% of career services officers said they expected internship activity to be down.
"It is definitely an improvement over last year," says Harrell, vice-president for professional and career management at the Thunderbird School of Global Management (Thunderbird Full-Time MBA Profile). "We do expect the internship process to run longer than usual this year, with some just-in-time internships coming up going into the summer."
Many first-year students came into business school this fall anticipating that it would be difficult to land an internship, says Joyce Rothenberg, director of the Career Management Center at Vanderbilt University's Owen Graduate School of Management (Owen Full-Time MBA Profile). With fewer recruiters visiting campus, she encouraged her first-year students to attend national MBA conferences this fall, venues where they would get exposure to a larger cohort of companies. Some students decided to take her advice; she had a group of 25 first-year students go to the National Society of Hispanic MBAs Conference this fall, some of whom were able to secure job leads and internship offers, she says.
"I think my first-year students were expecting it to be tough, so they've been more creative about their internship searches," she says.
On the full-time job front, career services officers say they are encouraged by small signs of progress. Michelle Antonio, director of MBA career management at the University of Pennsylvania's Wharton School (Wharton Full-Time MBA Profile), says she has seen double-digit growth in off-campus job postings on the school's job board, despite a slight decline in the number of employers that came to campus this fall. Another encouraging sign? More second-year students appear to have accepted full-time job offers now than last year at this time; of those, many have come from on-campus recruiting opportunities, she notes.
"I think it definitely looks and feels healthier than it did last year," she says. "I'm cautiously optimistic that come spring, things will look better than they did last year."
At the Marshall School, on-campus recruiting has been down about 15% to 20% so far this academic year, says Pete Giulioni, executive director of Marshall's Keenan MBA Career Resource Center. With tighter budgets, some recruiters are taking a different approach to finding talent, he says. For example, rather than come to campus, recruiters with openings are calling him directly and asking him to send them a package of student résumés.
"The spigot hasn't been turned off, so to speak, but employers are being much more cautious and very deliberate about their hiring and hiring patterns," he says.
Ken Keeley, executive director of the Career Opportunities Center at Carnegie Mellon's Tepper School of Business (Tepper Full-Time MBA Profile), has been keeping a close eye on the MBA hiring scene. He runs a program on his computer every Friday that tracks job and internship placement figures for students. As of Jan. 22, there were 71 companies that made full-time offers to second-year MBA students, the same number as last year, Keeley says. But of this year's second-year class, 44% have received job offers, down from 61% last year, said Keeley, noting that those numbers are slightly skewed because this year's graduating MBA class has 43 additional students.
"We've Hit the Employment Bottom"
Meanwhile, starting salaries are down slightly, with offers now averaging $103,382, down about $700 from last year. Says Keeley: "My take would be that we've hit the employment bottom, unless something dramatically changes in the next few months."
Like many career services officers, he's expecting that there will be more recruiters who will want to interview students come March and April. And he's aggressively taking steps to ensure that students get a chance to meet with them, organizing the school's first-ever spring break career fairs in New York and San Francisco this March.
"We're going to try to capture some of that just-in-time recruiting activity by going back to the New York and West Coast markets on our own," he says. "There will still be a lot of good students available in March, April, and May, so we are going to make it as easy as possible for companies that might want to recruit students."
Career services directors' hunches may not be so far off. Nearly 70% of MBA recruiters expect that their business will improve in 2010, according to a recent survey of 317 employers conducted by the Graduate Management Admission Council (GMAC), which administers the Graduate Management Admission Test (GMAT). Meanwhile, more than one-third of employers, 35%, said they plan to hire more recent MBA graduates in 2010 than they did in 2009, while 45% say they plan to hire the same number of MBAs this year and only 20% say they expect to reduce MBA hiring. A year ago, the estimates were far more downbeat, with only 19% of employers surveyed by GMAC predicting an increase in MBA hiring.
Busy Spring Expected
Recruiters say they are in the midst of finalizing their employment projections for the year, but many expect a busy spring hiring season ahead.
Susan Shald, director of talent sourcing for Gallup Inc.'s consulting division, says she expects her firm to continue to hire MBA students this spring, especially in key areas like business development. While the firm has cut back on some "less significant campus visits" in the last year, she says she's moving forward with plans to visit several schools this spring, including the Marshall School, the University of California at Berkeley's Haas School of Business (Haas Full-Time MBA Profile) and the UCLA Anderson School of Management (Anderson Full-Time MBA Profile).
"I think the fall was a bit tighter, but I am seeing things pick up a bit. We are seeing an increase in need for our services and, as a result, we have more postings," she says.
Ann Nowak, director of recruiting for professional programs at Liberty Mutual Group Inc. (LMG), the policyholder-owned property and casualty insurer, says her company is also still hiring, but that the competition for the company's openings is stiff. Unlike some recruiters, Nowak says she has not cut back on her recruiting schedule at all this year. Rather, she has used this fall's quiet recruiting season as an opportunity to introduce more students to her company and, as a result, has done more work with the company's core schools.
"We have more opportunities, but the flip side is that we are seeing a tremendous uptick in the number of applications for positions," says Nowak, noting that her company is receiving about 1,000 résumés a day for job openings, up from 350 a day last year. "MBA students have always had to be really good, but now you have to be even better in how you approach the company."
Staying on Recruiters' Radar
That's advice that many MBA students still looking for jobs are taking seriously as they continue their job hunts. Christopher McFall, a second-year MBA student at the Wharton School, is looking for a job in the real estate industry, a sector that has been particularly hard-hit by the economic downturn. He was able to secure a paid internship at a real estate firm in New York last summer—most of his peers had to take unpaid ones—but did not receive a full-time offer after the internship.
Most real estate companies don't hire until the spring, so he has been trying to stay on recruiters' radar in the meantime, says McFall, co-president of Wharton's Real Estate Club. He typically goes to New York at least twice a month to meet with companies, and last week attended a real estate career fair on campus. There were about 40 to 50 recruiters at the fair, down from last year's 70. Many of the recruiters encouraged him to keep in touch, but told him they are not hiring yet; others said they were still not clear on their needs.
Despite the uncertainty, McFall says he is still determined to pursue his dream job—as an acquisition manager at a large property owner—even if it takes him a little longer than he'd like.
"I would say I have good days where I feel great about what I'm doing and I have bad days when I wake up and think about all my friends who have concrete plans for next year and panic a little bit," he says. "But the more I talk with people and the more meetings I have with professionals in my industry, the better I feel about waiting it out."