It is hard to believe that just two years ago MBA careers directors were tearing their hair out trying to find jobs for their students. From luxury goods to consultancy and technology to pharmaceuticals, in 2011 jobs are back across the board. But the development that has taken most business schools by surprise is the strength with which banks and financial service firms have returned to the hiring trough.
Gone are the days when an MBA graduate who aspired to work in M&A had to take a stopgap role in a corporate finance department, confirms Bruce Lane, vice-president at MBAFocus, the US MBA recruitment firm. “Those [MBA] candidates who want to be in banking are in banking. Right across the board now you have candidates who are holding out for the dream job.”
Careers directors were taken by surprise, says Jackie Wilbur, senior director of career development at MIT Sloan, because banks hired so few interns in 2010 – internships are the first indicator of the subsequent number of full-time offers made.
At Harvard Business School, Jana Kierstead, managing director for MBA careers, says that although the return of finance companies has been faster than expected, banks have had to recruit heavily this year because of low levels of hiring in the past two. “They became very thin in the associate layer and they have a lot of work now,” she says. All of which is good news for the career prospects of this year’s graduating class. “For MBAs it’s great because there is no one ahead of them for two years.”
What is more, the boom in bank hiring is a global trend, with recruitment specialists from US, Europe, India and China reporting the return of the banks. Bank of America typifies the upsurge. Stephanie Butler, global talent campus executive, says MBA recruiting is up 15 per cent compared with last year.
With growth has come diversity, says J.J. Cutler, deputy vice-dean for career services at the Wharton school at the University of Pennsylvania. “The world of banking is growing and getting more eclectic. There are careers beyond investment banking, sales and trading.”
At Harvard, 7 per cent of the 941-strong class are going into hedge funds, says Ms Kierstead. “The hedge fund is appealing because they [MBAs] can see the results.” Recruitment in private equity firms is also popular with MBAs. “They are really interested in smaller organisations.”
All schools report an increase in the number of less traditional recruiters, such as consumer goods companies, not-for-profits and greentech companies – Burger King and Natura are two examples (see right).
Starting salaries for new MBA graduates of the top US schools range from $100,000 to $125,000 – Harvard graduates going into finance jobs are being offered about $125,000. At Insead, with campuses in France and Singapore, the average salary for its last graduating class, who completed their programme in January 2011, was €87,400 ($125,000).
Graduating half its students in January – most MBA programmes graduate in May or June – makes Insead an industry bellwether. And all the signs are positive. Of Insead’s January graduates, 93 per cent had a job within three months, according to Sandra Schwarzer, Insead director of career services. “It was the 1990s since we had an offer rate that high.”
It is a tale of increased levels of recruiters, job postings and job offers around the globe. The Stern school at New York university is typical. Pamela Mittman, assistant dean of career services and leadership development, says the number of recruiters rose by 15 per cent this year and job postings on the Stern website increased by 50 per cent. At Insead, 397 companies visited the campus including 16 banks, five of which were recruiting there for the first time.
At Shanghai business school Fudan, the school is seeing an increasing demand for MBAs who speak Mandarin. “My observation is that they [multinationals] have US and European employees and now they want to have more local MBAs,” says Gene Huang, director of the career development office at Fudan. There is one specific reason for the change in recruitment patterns, he adds: “Both industrial and financial companies are expanding into the west of China so they need more local recruits.”
The market is changing in India too, where programmes that carry the MBA nomenclature are almost invariably targeted at recent undergraduates, points out Saral Mukherjee, chair of the placement committee at the Indian Institute of Management in Ahmedabad. So schools such as the Indian School of Business (ISB) and IIMA, with its post-experience PGP-X programme, have to educate employers about the value of post-experience degrees. This is beginning to work, says Mr Mukherjee. “In the past year I have had an increase in recruiters who come to campus specifically to recruit PGP-X students.”
But the return of high-paying jobs might not be all good news, with concerns of salary disparities between men and women – the latter making up only about a third of MBA graduates. At the top recruiters there is parity, say careers office staff, but Eleanor Tabi Haller-Jorden, general manager in Europe for research organisation Catalyst, says their research suggests otherwise, and that women MBA graduates earn, on average, $4,600 less than men in their first job out of business school.
One explanation could be that men and women go into different sectors. According to Universum, which surveys MBA students about their preferred employers, a recent survey of European graduates shows that women rank luxury goods company LVMH fifth and L’Oréal sixth on their list of ideal employers, while men rank them 25 and 58 respectively. Conversely, men rank Porsche number 12 on their list; women rank it 52.
Ms Haller-Jorden is unconvinced, saying it is easy to “blame the victim” when talking about salary discrepancies. “It has certainly been a wake-up call to equity at the point of entry.”