On a brisk evening earlier this week in London's financial district, a group of 100 business school students gathered in the airy atrium of the Royal Bank of Scotland (RBS) building, sipping champagne and nibbling on crab cakes. The Cranfield School of Management students, just two months into their yearlong MBA program, were there to network with employees of the bank and alums. But as they circled the room with flute glasses in hand, some admitted to being anxious about their job prospects.
"I'm a little skeptical because I'm not sure that the people here tonight have jobs for us," said James McCarthy, 30, a former health-care professional who started at Cranfield this October. "Personally, I'm really nervous."
The panic that has seized American business school students this fall is slowly starting to make its way onto the campuses of business schools in Britain. With the loss of 31,184 jobs in Britain in the past two months, and a new round of fresh job cuts announced this week by large investment firms HSBC (HBC), Credit Suisse (CS), and Nomura (NMR)—the Japanese bank that took over most of Lehman Brothers' London operations—business schools here are starting to feel the pinch, with many anticipating a longer and more competitive job search for students this year.
With many bankers out of work, some British business schools are starting aggressive marketing campaigns to entice them to get their MBA. For example, City University London's Cass Business School plans to start an aggressive one-month marketing campaign at Canary Wharf's main tube station next month, using slogans such as "Don't Just Survive, Thrive" and "In Crunch Times, Do Yourself Credit" to perk the interest of potential students.
But business school may not prove to be the refuge that those fleeing the financial crisis hope. At this point in the school year, most British career services officers said recruiters have been slow to hire, telling them that they are taking a "wait and see" approach before extending any offers. Career services officers at schools outside of London said they are having a harder time convincing recruiters to come to campus this fall, as recruiting budgets are being slashed at many firms. Even those that are paying visits are cautious about extending offers to business schools students this fall, career services officers at the leading British business schools said.
"I would say the market is just as tough as in the U.S.," said Diane Morgan, director of career services at London Business School, where about 46% of students go into finance. "When we first looked at the credit crunch, we were a few months behind what the U.S. recruiting scene was looking, but since September and with everything that happened with Lehman Brothers, we have caught up."
Many of the traditional pipelines that British business school students turn to for jobs may also be in danger. Most British MBA programs are only a year long, and students often secure job offers through semester-long projects that they do with local companies, the British equivalent of the summer internships undertaken by U.S. business school students. Companies that work with business school students may not have as much flexibility now to extend offers to promising students, said Stefan Syzmanski, Cass' associate dean of MBA programs.
"In the past years, many of the projects led automatically to jobs, and that will certainly be less true this year," he said.
The changing landscape means that career services officers are being more aggressive about the way they pursue their relationships with companies. At Manchester Business School in northwest England, career services officers have noticed some companies pulling back on their recruiting budgets, choosing to hold off on campus visits. To counter that trend, the school has opened an office in London where students can meet with recruiters. They've also recently beefed up its career services and external affairs office, adding several new staff positions.
"We have to work a little harder to convince recruiters to leave London or Brussels to come to Manchester," said Michael Luger, dean of Manchester Business School. "They're still doing it, but we can't take it for granted because they are cutting costs, too."
These sorts of shifts will likely have a pronounced effect on the way British students conduct their job searches this fall. International students make up the bulk of the student body at most of the leading business schools in Britain. For example, the Cranfield School of Management boasts an 84% international student population in its MBA cohort this year. Most of these international students would typically have worked two to three years in Britain after business school, but some are deciding to head home after graduation.
"We have noticed a shift in people going home after getting their MBA," said Sean Rickard, director of the Cranfield's full-time program. "They are still keen to study here and work here, but it is becoming that much more difficult to do in the current climate."
Still, international students in Britain may be in a better position to land jobs in either London or other leading European cities than their counterparts in the U.S., said Derek Walker, director of careers at Oxford University's Said Business School, where 94% of the student body is international.
For one, the work permit authorization process in Britain is friendlier towards international students than the lengthy H1-B visa process in America. "I think there is an added degree of flexibility here, particularly if someone from outside the European Union wants to work in the U.K.," Walker said.
Also, many British MBAs have significantly more work experience than American business school students. For example, the average student at the Cranfield School of Management has at least eight years' work experience, compared to the three to five most American students have.
That is giving students such as Stephen Larkin, 36, an MBA student at Cranfield who worked in the banking industry for nine years before coming to business school, some hope. He decided to attend business school after being laid off from the Royal Bank of Scotland last May and is optimistic he will find a job when he graduates next September. He already has several promising leads on job offers in his chosen field—technology marketing—and believes he is in a better spot than most American business school students.
"We have a lot of business and international exposure already, so we are not coming out fresh, which is maybe the difference between the U.K. and American business schools, where the average age is in the mid- to early 20s," he said in a telephone interview. "I think that does give us a definite advantage, especially when you are looking for work in a tougher climate."
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