MBA talent is once again in demand, with placement rates bouncing back from recession lows. But salaries are flat, and signing bonuses are scarce
The job market for 2010 MBA graduates made a slow but steady recovery this year, beginning to rebound from one of the worst MBA hiring seasons in recent history. All but three of Bloomberg Businessweek's 30 top-ranked full-time MBA programs saw improvements in the percentage of students landing jobs within three months of graduation, according to the latest data reported to Bloomberg Businessweek. The news was not all good, though, with the schools' results showing an MBA job landscape that has significantly altered in the past two years. A surge in hiring later in the school year boosted many schools' placement numbers, but few are back to their 2007 placement levels of 2007, a headier time before the financial crisis, when the vast majority of students landed multiple job offers and fat signing bonuses. This year's results were still welcome news to career placement officers, such as Read McNamara, executive director of the career management center at Vanderbilt University's Owen Graduate School of Management (Owen Full-Time MBA Profile), which had 87 percent of students placed by the three-month mark, up six percentage points from the year before. "We held our collective breath all summer," McNamara says. "Our numbers took a rather significant surge in the late summer, just before the closing of my books." Fewer Signing Bonuses
This year, on average, about 12 percent of graduates at the top 30 schools, or one in eight, still hadn't received even one job offer by the three-month mark. That's an improvement from last year, when one in five students were jobless three months after graduation. Salaries are flat or down at 23 of the 30 schools, with starting pay averaging $97,049, inching up only $549 from 2009. Meanwhile, the much-coveted signing bonus has also seen a fall from favor, with 23 of the schools reporting that the percentage of students with jobs receiving signing bonuses is down, some by 20 percentage points or more from the year before. (For details on each school's placement statistics, view our slide show.) "This is now the new norm," says Paul Oyer, an economics professor at the Stanford Graduate School of Business (Stanford Full-Time MBA Profile) who has studied MBA compensation. "Fewer people are going into finance right now, which is certainly the highest-paying area. When their hiring is off, that is going to make a big difference." Mark Brostoff, associate dean and director of the Weston Career Center at Washington University's Olin Business School (Olin Full-Time MBA Profile), says he has advised students to adjust their expectations when it comes to compensation packages. Although 94 percent of the class found jobs within three months of graduation, the percentage of employed graduates who got signing bonuses fell to 41 percent from 60 percent the year before, and the median salary was $85,000, down $5,000 from 2009. A greater proportion of students went to smaller and midsize regional firms this year, which typically don't have the same MBA compensation packages as the larger firms, he says. "The marketplace has been getting healthier, but we are still not to any extent back at a level where we would think we are out of the woods for MBA candidates," Brostoff said. "There are companies that calibrated their compensation packages knowing there is a flood of talent in the marketplace."
Disappointing Salary Offers
Even in a tight job market, some recent graduates are not willing to compromise when it comes to compensation. Syed Hussain, 30, a 2010 graduate of Southern Methodist University's Cox School of Business (Cox Full-Time MBA Profile), is seeking a job as a business analyst in the transportation industry, similar to the role he had last summer as a business analyst intern for American Airlines (AMR). He turned down a job offer he received two months after graduation from an airline, which he declined to name, because it did not meet his salary criteria, he says. "I haven't yet lowered my expectations, because I still want to look for opportunities [that] can help me in the long run," says Hussain, who recently interviewed with FedEx (FDX) and Spirit Airlines. "I don't want to take anything [that] is good for me today but later on might hamper my entire career plan." The turnaround in the employment picture means that students like Hussain can be a bit more selective when it comes to the type of jobs they are angling for. Many of the top-ranked schools hit hard by the financial crisis last year have started to bounce back, including Harvard Business School (Harvard Full-Time MBA Profile), University of Pennsylvania's Wharton School (Wharton Full-Time MBA Profile), Northwestern University's Kellogg School of Management (Kellogg Full-Time MBA Profile) and University of Chicago's Booth School of Business (Booth Full-Time MBA Profile). Fruitless Internships
The hiring outlook did not look bright for the 2010 class last fall, when many students returned from summer internships without a job offer in hand. Recruiters were still showing up on campus but were hiring fewer students, leaving career services officers such as Wendy Tsung, associate dean and executive director of the MBA Career Services Office at Emory University's Goizueta Busness School (Goizueta Full-Time MBA Profile), nervous about students' prospects. "We went into the year very unsure about how it was going to play out," she says. She encouraged students to be more proactive about their job search, and her staff worked to develop recruiting relationships with companies the school had not worked with before. By the time the spring rolled around, a "second wave of recruiting" lifted the school's placement numbers by 11 percentage points, to 93 percent.
The second wave of recruiters this spring was a welcome trend on many business schools campuses, helping to boost placement numbers in a challenging hiring climate, says Nicole Hall, president of Tampa-based MBA Career Services Council and executive director of career services at Pepperdine University's Graziadio School of Business and Management (Graziadio Full-Time MBA Profile). About 38 percent of schools reported an increase in on-campus recruiting in 2010, according to the Career Services Council's annual membership survey. That's a sharp uptick from 2009, when only 2 percent of schools reported that trend. Also, activity increased on job boards, with 60 percent of schools reporting a rise in full-time job postings this year, she says. Like last year, students continued to pursue more nontraditional MBA roles, with a growing number of students going into such sectors as health care, government, energy, and technology, says Hall. Traditional fields, such as consulting and financial services, also started to recover, she says. "There was definitely more just-in-time hiring and heavier activity in the spring, which led to better job placement numbers," Hall says. "The big difference is there was a really dramatic increase in the number of opportunities between 2009 and 2010." Sluggish Placement Rates Even with the start of a turnaround in the market, some schools have made little to no progress in improving their placement figures. At the University of Michigan Ross School of Business (Ross Full-Time MBA Profile), the placement rate stayed flat at 22 percent, while the University of Maryland Smith School of Business (Smith Full-Time MBA Profile) and SMU's Cox School actually lost ground. Smith's three-month placement rate fell from 87 percent in 2009 to 81 percent in 2010, while a third of Cox graduates ended the summer unemployed, up from 27 percent in 2009, a deterioration in the placement rate the school blames on turnover in the career services office. At the University of Notre Dame's Mendoza College of Business (Mendoza Full-Time MBA Profile), only 82 percent of the graduating class reported a job offer at the three-month mark, an improvement of just one percentage point over 2009. Tyler Norrish, 32, a 2010 Mendoza graduate who worked as a civil engineer before business school, has been looking for a job in corporate finance since he graduated in May. He has had several interviews in the past few months but has had no luck yet in securing any job offers, he says. His only experience in finance is his summer internship, and recruiters have told him they are passing him up for applicants who already have several years of experience working in the field, he says. As a result, he has started thinking about returning to his former occupation. "I'm considering going back into engineering, because it seems like I might have to at this point," he says. "I don't want to hold out forever for a finance position if it is not going to happen soon."