While U.S. unemployment remains stubbornly close to 10%, job prospects for this year’s class of MBAs are looking considerably brighter.
(poetsandquants.com) — While U.S. unemployment remains stubbornly close to 10%, job prospects for MBAs in the class of 2011 are looking considerably brighter. At Stanford Graduate School of Business, job postings are up 85% year over year.
Boston Consulting Group, one of the largest employers of MBA graduates, plans to up its hiring by 18% this year. And a new survey of MBA employers shows that 64% plan to hire MBAs from the class of 2011, up four percentage points from a year earlier.
“We are seeing an extremely sharp uptick from virtually every sector that recruits our MBAs,” says Pulin Sanghvi, director of Stanford’s career management center. “Most employers are coming back with sharply higher hiring numbers. There are parts of the economy right now that are really booming, particularly in tech, and that boom is creating even more jobs from the ecosystems around these companies.”
On some level, the strong recovery in the MBA market is a reflection of pent-up demand for managerial talent.
“People were being very conservative about staffing during the recession,” says Sanghvi. “Many are now finding that they are understaffed for what they are trying to accomplish, particularly for managerial talent. So that trend is very promising for MBA students across the country.”
Less than three years ago, there was widespread worry and even despair as the economic meltdown took hold. Julie Morton, associate dean of career services for Chicago’s Booth School of Business, recalls receiving a text message from an MBA graduate working at Lehman Brothers just before the investment bank filed for bankruptcy in September of 2008. It read: “Lots of stuff is going down here. We’re going to need your help. Just watch the news.”
She and members of her staff rushed to New York the following week to help alums who quickly became victims of the collapse. Back at school, major MBA employers in the financial sector all but disappeared. Most of the other non-financial companies severely cut back their interview schedules and offers. Surprisingly large percentages of the class of 2009 remained unemployed even three months after graduation.
With economic recovery beginning last year and showing greater strength now, the mood on business school campuses has turned upbeat and even confident.
“Students feel supported and confident, but not cocky, that things are going to work out for them,” says Morton, who reports that on-campus interview slots this past fall were up 22% and job postings for MBAs and alums have risen nearly 30%.
At Stanford, adds Sanghvi, some students took themselves out of the heavy recruiting this past fall, preferring to wait for opportunities that are a better match for their careers. And at Northwestern University’s Kellogg School of Management, some students came back from their summer internships last fall with offers that they’re not immediately accepting.
“They’re really being thoughtful about the opportunities now,” says Roxanne Hori, assistant dean of Kellogg’s Career Management Center. “When times were really bad, people were going to take whatever they could. There is a comfort level now and some students are willing to say, ‘I think I’m going to pass on this because it’s not what I really want to do.’”
Hori says she is seeing a significant increase in hiring in consulting and the return of the investment banks. “Across the board, all the major consulting firms have indicated that their numbers will increase this year,” she says. “They are coming back with a vengeance, with aggressive hiring targets because their business has picked up.”
The same is true in technology. Just before Christmas, Hori led a group of 15 Kellogg students to the Bay Area to meet with technology startups and was surprised at the level of interest. “We had more interest than we had time available on our schedule,” she says. “The appetite for talent has increased.”
More broadly, a recent survey of executives, managers and recruiters by the Graduate Management Admission Council (GMAC) found that 64% of them plan to hire new MBA grads this year, an increase from 60% last year. Dave Wilson, president and CEO of GMAC, attributes the increase to the economic recovery as well as strength in the technology and energy industries. But the rise in hiring intentions also reflects the high value that many companies continue to place on the degree.
“When you talk to recruiters, they talk about value for money,” says Wilson. “They argue that there is incredible value for money when they hire an MBA. Last year, about 99% of employers reported being satisfied with the MBAs they hired. That is the highest level of satisfaction ever.”
IBM Corp. IBM, which will hire more than 250 new MBAs this year, agrees.
“We are hiring more MBAs for two reasons,” says Ted Hoff, IBM’s vice president of learning and development. “One is we are growing as a company and we are particularly looking for people who are willing to work and live in different countries around the world. The second reason is we need leaders who understand our client industries.”
The uptick in hiring also is being aided by more sophisticated networking and outreach efforts by business schools. The recent downturn forced career services officials to be far more creative to get their students jobs. Chicago’s Booth School, for example, put a career management staffer in Hong Kong and is about to put another in London this March to gather job opportunities for Chicago-based graduates in Asia and in Europe.
Many offers these days are coming not from on-campus recruiters, but from newly established relationships with employers.
“A lot of companies are sourcing talent without coming to campus and without posting jobs,” says Chicago career services dean Julie Morton. “Students have done a much better job networking than they have in the past. Companies realized that as soon as they posted a job, they were inundated with resumes, so they were better off mining their own contacts and networks.”