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Adam Rosenberg did everything right. He got into a good school. He landed a great internship. He was even vice-president of two MBA clubs and a graduate teaching fellow. But when it came time for companies to hire this year, the 2009 graduate of New York University's Stern School of Business (Stern Full-Time MBA Profile) was surprised to find out how little it all mattered. Says the aspiring real estate asset manager, now seeking employment: "I had to accept the fact that I was going to graduate from a top 10 business school without that job."
He's not alone. This spring, hundreds of unemployed business school students were likely thinking the same thing. Though it's no surprise with the economy still on life support and national unemployment numbers still on the rise, MBA students have found themselves facing what schools say is the worst hiring season they've ever seen.
According to the latest data reported to BusinessWeek, 16.5% of job-seeking students from the top 30 MBA programs did not get even one offer by the time schools collected their final fall employment data three months after graduation. Last year that was true of just 5% of students. And despite the meteoric rise of salaries over the past several years, starting pay was down this year for the top 30, dipping from roughly $98,000 in 2008 to $96,500. For many programs, it marked the first time since the tech bubble burst that salaries didn't increase. Signing bonuses, too, fell both in value and quantity.
Even students at top schools have been affected by the slump. With MBA mainstays like the consulting and financial services sectors still hurting from the crisis, industries that were once elite schools' bread and butter have hit lean times. The average number of students without job offers three months after graduation at the top 10 programs was 15%, just three percentage points better than the rest of the top 30. Heavyweights such as the Wharton School (Wharton Full-Time MBA Profile), the University of Michigan's Ross School of Business (Ross Full-Time MBA Profile), and Duke University's Fuqua School of Business (Fuqua Full-Time MBA Profile) are reporting close to 20% of students without job offers.
"I wasn't around during the Great Depression, so I don't know what it looked like then," says Roxanne Hori, assistant dean and director of career management at Northwestern University's Kellogg School of Management (Kellogg Full-Time MBA Profile) and a 14-year veteran of the industry. "But [this] is the worst that we've seen."
One factor that made this recession different was that it hit MBA students where it hurt the most, with thousands of high-paying finance jobs going up in smoke. The companies usually responsible for doling out generous bonuses dramatically scaled back both their hiring and incentive packages, says Michelle Antonio, director of MBA career management at the Wharton School. There, the percentage of employed graduates who got signing bonuses fell to 71% from 81% the year before, and their median value dropped by $5,000. In 2007 signing bonuses went to about 76% of students who accepted jobs across the top 30. That number fell to 65% in 2009.
The most successful schools this year were able to direct students who were shut out of investment banking and consulting into different industries. Washington University's Olin Business School (Olin Full-Time MBA Profile), ranked No. 28 by BusinessWeek, might seem an unlikely candidate to show up top 10 schools like Booth and Kellogg in terms of offers. However, it reported only 8% of students without at least one job offer within 3 months of graduation. That's five percentage points lower than the top-ranked University of Chicago Booth School of Business (Booth Full-Time MBA Profile).
Part of the key to its success, says Mark Brostoff, associate dean and director of the Weston Career Center at Olin, is that students had to "recognize the value of other career paths." Rather than holding on to their hopes of working on Wall Street, Brostoff advised students to look at their other skill sets, because "that Holy Grail's not there this year." At Olin last year, 28% of students with jobs found them in the financial services industry. This year, just 14% went that route. Instead, 31% went into the booming pharmaceutical, biotech, and health-care industries, up from 18% last year.
Kip Harrell, president of the MBA Career Services Council and vice-president for professional and career management at the Thunderbird School of Global Management (Thunderbird Full-Time MBA Profile), says that a few sectors have been able to pick up some of the slack. Health care, energy, government, and nonprofit hiring are holding up particularly well, he says, and in some cases increasing. As for the students who came in with Wall Street dreams, says Brostoff, some will complain: "'This is not why I came to your MBA school,' and I won't disagree with them," he says. "But you have to recognize what the realities of the market are."
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