Grim reading for graduates hunting for jobs

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Grim reading for graduates hunting for jobs
Employment prospects by Linda Anderson
Published: January 17 2003 18:42 | Last Updated: January 17 2003 18:42


Students at US business schools who began their MBA in the autumn of 2000 as the slowdown began to bite anticipated their two-year programme would carry them through the downturn and on graduation employment prospects would be buoyant or at least stable.


This has not proved to be the case. Data collected from the FT full-time MBA rankings over the past three years makes grim reading.

In 2001 more than 10 per cent of graduates from US business schools taking part in the rankings were without a job three months after graduation, almost double the 5.5 per cent of the previous year. Last year, according to the 2003 FT full-time MBA rankings, this rose to an alarming 20 per cent of graduates from ranked US business schools still looking for full-time employment.

The days when students could pick and choose between offers from a handful of blue-chip companies have long gone. Instead, anecdotal evidence suggests that merely gaining an internship is giving students sleepless nights, while securing one full-time job offer is challenging in the extreme.

Interviewing schedules and hiring decisions have been deferred, adding to students' woes. Recruiters, while maintaining a presence on campus are often not recruiting and when they do recruit make the number of offers that can be counted on the fingers of one hand.

Hardest hit has been consulting and investment banking, the traditional refuge of a large proportion of MBAs.

From the US to the UK and continental Europe, the chorus is the same: "It is tough out there."

But, difficult though it is in Europe and Asia, the US is undoubtedly the hardest hit.

The Wharton School at the University of Pennsylvania reports that, six months on, 8 per cent of its May 2002 graduates have yet to find full-time employment, while at Kenan-Flagler Business School at the University of North Carolina at Chapel Hill the figure is slightly higher at between 10 and 15 per cent.

"Yes, it is gloomy out there," says Mindy Storrie, director of the office of career services at Kenan-Flagler.

"Last year's students were shocked. They had thought they could ride it out and they felt that things would get better and they did not."

The UK is also feeling the downturn.

But despite the gloomy outlook, schools report that interest from would-be students remains healthy. An MBA seems to remain the way forward in career terms. Incoming students are not despondent about their prospects either.

Prof Michael Hay, associate professor and director of the career management service at London Business School, points to a new sense of realism on campus. "There are opportunities, but they [students] need to be very well prepared and recognise that there is a lot we can do and also a lot they can do in terms of networking and preparation. There is a sense of realistic optimism."

Kathleen Dolan, associate director of career services at Iese business school in Barcelona, has also noticed that students are more realistic.

"This year's lot have seen the class in front face a whole different market and so they are doing much more networking and taking more responsibility for the job search. Nevertheless it is going to be a difficult year."

Recognising that it may be some time - if at all - before recruitment returns to the heady days of multiple job offers, schools have grasped the nettle and adopted a variety of tactics to help their students.

"We are trying to diversify our recruitment base," says Peter Degnan, director of career management at the Wharton School at the University of Pennsylvania. The school is urging its students to consider other sectors such as health care and consumer products and Mr Degnan says more students are becoming involved with the not-for-profit world. For MBAs that do enter this field Wharton operates a loan forgiveness scheme, which Mr Degnan concedes "is a great incentive".

Perhaps uniquely Wharton is also considering using the services of professional recruiters and is currently talking to recruitment firms about placing its MBAs.

However, the nature of recruitment firms with their desire for immediate placings means this approach might be more advantageous in the spring.

This month London Business School is offering its students a series of sector briefings covering fields such as media, telecommunications and private equity. The school is also running trips to places such as Dubai and Hong Kong to help the job search.

Kenan-Flagler, for the first time, has compiled a post-graduation resumé book and distributed it to recruiters with immediate needs. Of the 33 MBAs that participated, 13 secured job offers, some as a direct result of the book.

Flexibility from schools and students appears to be the name of the game.

As well as managing students' expectations, schools are encouraging students to look in sectors for career opportunities that a few years ago they would never have considered.

Julia Tyler, director of the full-time MBA at London Business School, believes the tough economic climate has forced MBAs to think seriously about what they want and the moves they need to make to get it.

"The rough job market has forced them to think it through and think it through properly. By keeping their cool they will hopefully get a better fit.

"Some of my best students graduated unemployed deliberately because they thought 'we are not going to rush this' and many have now done it."

Bob Reynolds, senior client partner at executive recruiters Korn Ferry in the UK, also believes some good can come from the situation.

"Corporate life is not the only thing [for MBAs]. Middle-sized companies have always been interested in bringing in a small number of MBAs, but MBAs have not been interested in them. If MBAs are prepared to have an open mind and go into [smaller] organisations, then I think these organisations will welcome them with open arms."

So perhaps the current climate does offer a silver lining. MBAs will be flexible and open-minded, and sectors such as not-for-profit will benefit from managers of the highest calibre.