In the spring, a young man’s fancy lightly turns to thoughts of love, according to Victorian poet Alfred Lord Tennyson. Sadly, for both the young men and women who are MBA students, their thoughts this spring are more likely to turn to impending unemployment and debt.
Not since 2002, following the terrorist attacks in New York, the bursting of the dotcom bubble and general economic gloom, have times seemed so difficult for those graduating from MBA programmes. But, while investment banks and financial services companies – the traditional MBA recruiters – are retrenching, many students are finding there are real opportunities elsewhere.
Naveen Sikka, a second-year student at the Haas school at Berkeley, is one of a group of students attracted to northern California because of the buzz surrounding alternative energy – “cleantech”, as he calls it.
Traditional sectors snap up the MBA talent
With financial services companies slashing their recruitment plans, traditional industrial and consumer goods companies are coming into their own.
Cargill, the cocoa to cotton producer, has been recruiting MBAs since the 1970s. The company, which operates in 67 countries, is recruiting in London, Madrid, Beijing, Shanghai and Singapore as well as at the top US business schools, says Jim Haymaker, corporate vice-president for strategy and business development and also a Chicago MBA. Cargill recruits between 10 and 12 MBAs a year for its strategy and business development group, which works on corporate strategy, mergers and acquisitions and supply chains.
While Mr Sikka, a New Yorker, spent his internship last summer in an investment bank, his work there was related to energy. Now he is completing a project for a venture capitalist firm looking at cleantech issues. Although he still has not yet secured a job for after his graduation in May, he is clearly optimistic. “I’m trying to see where the smart money is allocating its capital in the greentech space,” he says.
Mr Sikka is actively looking at small or start-up companies in “smart grid” developments and energy efficiency. “Energy efficiency is becoming sexy,” he says.
These sectors are a far cry from the traditional investment bank, he acknowledges. “Because this is an early industry, the cachet of an MBA is not really there. They (start-ups) really need to be able to work out what an MBA can mean for them.“
According to Mr Sikka, as many as 20 of the class of 240 MBAs at Haas could be looking for work in environmental or energy fields – more than in previous years. And next year he believes the numbers will be even higher.
Abby Scott, director of career services at Haas, says that, while recruiting overall is down at the school, energy is a bright spot. “Some of the policy initiatives in California are helping to fuel a lot of opportunities.“
Definitive figures for the downturn in recruiting are hard to come by but the number of jobs on offer in the US overall seem to be down by 10-20 per cent, according to a survey conducted in January by the MBA Career Services Council.
In the US, the problem has been exacerbated because of uncertainty surrounding the hiring of non-US students by companies that have been given government bail-outs. Bank of America has rescinded offers and there are fears other federally supported banks will do the same.
Anecdotally, schools across Asia are facing similar problems. At Ceibs in Shanghai, for example, 40 per cent of students had signed offers at this time last year, according to Lydia Price, academic director of the MBA programme. This year the figure is 27 per cent.
HSBC aims to raise intake on international programme
One bank that is still hiring MBAs this year is HSBC. Indeed, it is increasing the number of recruits to its international management programme from its customary 20 a year to 80 for 2009.
Although not all recruits will have MBAs, the programme particularly appeals to those who want to work in different banking sectors and geographical locations.
For the first three years, those who join the programme change region and business group every 18 months. After that, they are expected to change function and location every three years.
The programme is popular, and receives several thousand applicants a year, says Stuart Tait, head of human resources for international management. “We’re in a market where our brand is strong.”
Today there are 340 managers in the international management group but HSBC hopes to raise this to 600, says Mr Tait, a recruit of 1984’s intake. Mike Geoghegan, HSBC chief executive, also entered via the scheme.
In India the market has also slowed down, according to Ajit Rangnekar, dean of ISB in Hyderabad. He says: “We have gone to the companies who have moaned in the past that they had not had access to the top finance and industrial talent.”
The result, he says, is that ISB students are now accepting jobs in “real industry with people who are doing business rather than advising business”.
What is clear in the US is that those graduating from the top schools are less likely to be left without a job, even if the job they accept is not their dream package.
At Harvard Business School, job postings are down by a quarter, with financial services and real estate particularly badly hit, says Jana Kierstead, head of career services. Nonetheless about 77 per cent of the class of 2009 have a job offer.
At Chicago Booth, two-thirds of this year’s MBAs already have an offer in hand, down slightly from the 70 per cent of a year ago. And students are proving to be remarkably confident about their prospects, according to dean Edward Snyder. A fair number of students who have been offered jobs have not accepted them, he says. “That’s counter to what you might expect.”
Even at NYU Stern, one of the traditional feeder schools for Wall Street, job offers are down just a few percentage points, says Pamela Mittman, assistant dean for career services and student activities. What has been significant, however, is the way students are finding jobs through job postings rather than the traditional job fairs and on-campus recruitment, she says.
It is a pattern seen throughout the business school world. At Insead, dean Frank Brown says that one tactic employed there has been to ask alumni to tell the school if there were appropriate job vacancies in their companies. The first e-mail sent to alumni produced 200 job postings.
Insead, which graduates two classes a year, was one of the leading indicators of MBA job prospects when it graduated 460 students in December last year. Almost 65 per cent of them had a job on graduation but Mr Brown believes prospects will be worse for those graduating this summer and for those graduating in 2010.
At Harvard, Ms Kierstead is also concerned. “What I hope will be better in 2010 is that there will be less ambiguity,” she says.
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Career advice from FT Jobs Clinics
What kind of jobs are available for MBA graduates this year? Which countries and industries value the qualification? What are the long-term prospects for the class of 2009?
These and other questions will be answered on March 11 in the first of the Financial Times’s monthly Jobs Clinics. In this session, the concerns of students and recruiters will be addressed by Bruce Lane, vice-president of MBA Focus, the US-based recruitment organisation, and Sandra Schwarzer, director of career services at Insead.
Ms Schwarzer believes there is a difference in the way companies in Asia and Europe recruit. “In Asia, it is still done in a less structured and entrepreneurial way. You have to convince companies you are really interested in them.”
Nonetheless, there is still a lot of strong hiring in Asia, particularly in Dubai, Shanghai and India. Indeed, eight Asia-based companies are recruiting at Insead’s Singapore campus for the first time, she says, including Korea’s SK Group and Unilever Asia.
US hiring is subdued says Mr Lane, with job postings down about 30 per cent. Recruiting for second year students in the last few months of 2008 was down by about 25 per cent, he says, with many recruiters eschewing campuses. Students at top-ranked schools will do better than those at lesser institutions as industrial recruiters target high-calibre students they would not expect to attract, says Mr Lane.
On March 11, between 14.00 and 15.00 GMT, Ms Schwarzer and Mr Lane will answer questions on MBA recruitment at: www.ft.com/businesseducation/jobsclinic
Send your questions now to ask@ft.com and they will be answered on the day.
