A Tough Job in a Tough Job Market

And Matthew Merrick, chief of Harvard's career-services offices, says next year's going to be comparable to this year

Matthew Merrick sure has a keen sense of timing. The Harvard Business School MBA (class of '96) took the reins of his alma mater's career-services office in December, 2001 -- just as the worst MBA job market in years arrived. BusinessWeek Online's Brian Hindo recently spoke with Merrick about his placement experiences in the current tough environment and what he expects to face next year. Following are edited excerpts of their conversation:

Q: You must have known that you weren't going to step into an easy situation, as far as job placements go.


I knew. Actually, it made the job attractive. When times are steady, there's less incentive to be creative. But this year, there were a lot of things to do and a mandate to do more. From a leadership perspective, that's a powerful draw.

Q: How bad was this year in terms of placements?


It was a tough year for our school -- as it was, I think, for all the top schools.

Q: What percentage of students right now have jobs?


We don't have the final numbers yet.... I think we have fared well compared to other schools, but our numbers aren't as strong as last year.

Q: HBS has a very large alumni network. How can students can take advantage of that?


We have a database that alums keep updated with their contact information -- and they can choose to be alumni advisers. Well over half of our alums choose to advise current students. You've got this large group of alums [almost 50,000] that students can run searches against based on industry, geography, title, company, or whatever to contact leaders in all different kinds of enterprises around the world.

From there, students use their job-search instincts and training to ask for advice on companies in their industry or region and try and get some mentoring.

Q: Since it's bad form to ask an alum for a job, what strategies do you recommend?


Ask about industry and geography. Questions like: Can you offer an assessment of the industry? What are the competitive strengths of businesses that succeed in this industry? What are your thoughts on who the really good players are? Who are the people you want to be associated with in the long run?

Same thing on location: Who are the major players in a given city, and what are their strengths, what are their weaknesses, what kind of future do you think they have? Just draw on their expertise. The alums obviously know, when they get a phone call or e-mail or letter, that the student is looking for a job.

It's really about education. We preach to our students that their first job is very important, but that it's also important to have a vision for your career for the next five to seven years [and] the avenues you can take to get there.

Q: Last year, Harvard placed about 60% of its students in the financial-services and the management-consulting industries. Those are two industries that have really cut back on hiring. How has that changed the dynamics of recruiting this year?


Consulting companies took the mid- to upper-30s [percent] of last year's class, and they're going to be in the lower- to mid-20s this year. Students are being more thoughtful and creative in their searches and are looking at other opportunities as well.

The number of general-manager opportunities and marketing opportunities have increased. Last year, about 10% of our students went into general-manager[-type jobs]. This year, the number is 15%. Marketing last year was about 8%. This year it's 12%.

Q: What other industries are hiring?


Mid- and large-size [corporations] are picking up some of the slack. And our numbers for venture-capital and private-equity firms won't be dramatically different this year. What has become much more popular is investment management, which is close to 10%, which I think is double last year.

When it comes to functions, I think that marketing [placements] increased by 50% this year, and so did general manager [placements].

Q: Will consulting and banking still be at the top of the list in terms of the largest takers of HBS grads?


Again, the numbers are incomplete, but they will continue to be our strongest opportunities.

Q: Once consultancies and banks start to hire in larger numbers again, do you anticipate that students will rush back to those sectors?


A really tough question. I don't think that if the economy turned robust tomorrow, the percentage of students that choose consulting and investment banking would return to the previous level. I think there'll be longer-term ramifications of this decline.

Q: Do you think MBA students have placed too much emphasis on landing consulting and finance jobs, simply because of the big payoff and the prestige?


It's a great question. Some people probably argue yes. But look at what those opportunities offer people -- not just compensation, but experience, exposure, association with smart people, a chance to learn about a variety of industries, and having good managers to work for, which we think is real important.

Those are attractive jobs, and they've been very popular with students because they help you in your career over the long run. There are a lot of senior leaders today in Corporate America who came from consulting and investment banking. It's a logical choice if you want to be a leader of an organization -- a really good stepping-stone.

Now, there are lots of other ways to get to the same place. Going directly to work for a big [corporation], and rising through the ranks is another way to do it.

Q: That said, do you feel that the current state of the economy has taken a bit of the luster off finance and consulting?


I don't know if I'd say that. I think that just as the venture-capital boom and the entrepreneurial and technology booms were attractive to students, there'll be other opportunities that will be very attractive.

Q: Has there been a significant dropoff in the number of companies that visit campus?


It hasn't been a significant decline. It's down a bit, but I think our traditional recruiters are still coming. Or if they aren't, they're maintaining high visibility on campus.

The number of students they hire is down compared to previous years.... But they're still here.

Q: Has that been an adjustment for students -- not being able to rely on campus recruiting as much as they had in the past?


It definitely has. Because there are fewer opportunities, students have had to say: "I gotta go to them."

That has been maybe the biggest story of this year -- that students have had to take more initiative than in the past to make themselves attractive. That started early in the fall, that adjustment.

Q: Is it a common misperception among MBA students at top schools that offers will just fall in their lap?


I think you have better opportunities when you make the investment and the decision to go to a well-known business school. But your expectations also increase. So I think it's relative. Students probably worked twice as hard this year as they have had to in the past to find opportunities.

It's hard work. Some students have gotten that right away. Others, we've had to prod. But everybody gets it at some point.

Q: The current wave of scandals in the business community -- do you think it will influence the type of jobs people seek?


I think all the issues of the past few months -- the tough job market and September 11...what it has done is cause students to ask themselves: "What is really important to me in my job?"

Is it making money, is it living in a certain town, is it working with good people? I think people are getting more in touch with their values. So I think that the corporate scandals are just an extension of other issues that have caused people to be more reflective and aware of what's important to them.

Q: The big banks are still laying off people. Are you still hearing a lot of pessimism in the short term?


I wouldn't say that we're hearing pessimism. I'd say that the expectation for next year is going to be comparable to this year. I'd make a point, too, that if you look at the job market, the unemployment rate is 5.5% or 6%. That includes MBAs, too.

So our students might be working harder and taking a little bit longer to get a good opportunity. But while the employment market is more challenging than in the dot-com era, it's still not that bad.

Q: Are there any industries that you would like to see do more MBA recruiting?


We're trying to persuade international organizations -- non-U.S. businesses -- to consider some type of relationship with the school. About a third of our students are international. So we want to make sure that we have sort of a broad set of international companies interested in us.

Q: How do you initiate those relationships?


We've been talking to a lot of companies. We reach out to their leaders -- who are sometimes alums of the school -- to talk about the school and its interests, to learn more about their organizations, and to try and develop some kind of participation with them. Sometimes it's recruiting, but a lot of times it might be executive education or doing a research project. Just getting some kind of relationship.

Q: What about government or public-sector jobs?


I had a meeting a couple weeks ago with a pretty senior government official to talk about this very point. We do have a small number of graduates this year going into government jobs. It's probably a little bit higher than normal. One of our graduates, for example, is going to work in the FBI. The government jobs have picked up a little but not by any substantial percentage.

We definitely had a larger number of summer interns this year go to nonprofits -- about 8% of our summer class. Historically, that figure has been a lot lower.