The global financial crisis has hit the international managerial job market hard, yet MBAs seem to be fairing better than unqualified managers in general.
European Union unemployment has risen by 1.2% to 7.9% in April 2009, compared to 6.7% a year ago (US unemployment has risen by 3.3% in the same period).
MBAs have not been insulated from this crisis, but early career service feedback suggests the percentage finding employment within three months of graduation will not be significantly different from a year ago.
Only seven schools worldwide reported 100% employment rates for their MBA graduates including two in India - the Indian Institute of Management in Ahmedabad and Indian School of Business. Vlerick Leuven Gent in Belgium topped the table in Europe, whilst Georgia Tech, MIT and Bentley College toped the table in the USA, alongside Calgary in Canada.
The MBA alumni network is a vital resource in a recession, helping to keep employment rates high. Alumni in small, medium and large industrial and technology companies are coming back to MBA campuses to recruit MBA talent at a time when many multinationals and banks have hiring freezes. Peter Fennah, Career Director at Cranfield School of Management, a British general management MBA, agrees that alumni are playing a big role in MBA recruiting this year. The big difference compared to last year, is that it is taking longer to find jobs, it is harder for people to switch careers and more of our MBAs are entering maverick roles, like the booming online gaming industry, or joining smaller companies through our alumni network.
An opportunity for Indian MBA graduates may be smaller companies in Europe, Asia, Australia and Canada, where the visa environment remains favourable. A benefit of the MBA qualification is that each school has a large alumni network, often working in high growth small and medium sized enterprises, and when the job market in one sector falters, many of these alumni come back to the school seeking to hire young talent whom they otherwise might not be able to attract. The USA has reduced the availability of visas, making it difficult for Indian MBAs to remain working in the country after their graduation. By contrast, these other countries have favourable working visa envornments for new Indian MBA graduates - a big benefit to smaller companies looking to hire MBAs.
Another reason MBAs are faring relatively well, despite the recession, is the continued hiring into the consulting industry, which traditionally recruits about 30% of MBA graduates. Strategy firms like AT Kearney are looking for experienced MBAs to staff a growing number of assignments looking at 'efficiency-savings' and 'strategic reviews' throughout Europe.
Financial services firms traditionally hire 30-35% of international MBAs. In 2009, it is expected that the proportion will be closer to 25%, which is not bad considering over 325,000 people worldwide have been laid off in this sector in the last twelve months. Stephanie Ahrens, MBA Recruiter at Morgan Stanley explains those of us that have seen downturns in the economy in the past know that a recruitment freeze is not the answer. MBAs are much desired in our business for building a pipeline of future leaders and innovators. We are committed to hiring MBAs in 2009 and beyond, despite current challenging market conditions.
Sarah Crawford, Head of European MBA Recruiting at Goldman Sachs confirms that Goldman Sachs is running an active intern and full-time MBA hiring program this year. MBAs offer a unique set of general management, leadership and communication skills. Crawford adds We have recently interviewed Russian, Turkish, Arabic, Danish, Dutch, German, Portuguese and Spanish speakers for our Summer MBA intern program.
To some extent the crisis is stimulating MBA demand in financial services. Fennah at Cranfield points to a big uplift in contracting opportunities for experienced MBAs, especially in finance and insurance. Many companies have cut back too sharply and they need experienced contractors to complete projects, or fill specialist roles vacated by people who have been retired early.
Strong domestic growth rates and renewed investor confidence since the victory of the Congress Party, is stimulating local employer demand for Indian MBAs. TopMBA.com continues to see a growing number of Indian companies recruiting MBAs, especially amongst multinational companies operating in India. Professor Prem Chandrani of S.P.Jain Institute in Mumbai confirms that local demand for Indian MBAs is strong at present. Michael Joseph of Olam International recruits many Indian MBAs because their complete business understanding is a necessity.
Mr. Sunil Bellara, Director of Capgemini India maintains that MBA's have always proved to be assets to the organization they join: Today it is not just the MNC's but also the Indian pure play companies across all industries that invest in hiring MBA's. Professional management is not just a topic of seminar and panel discussions: it has become a reality in the workplace. The current slowdown may have impacted average salaries on account of skewed offers from US being less, but in real terms now is the time when industry needs these graduates the most.
In addition, many MBAs - typically 5-10% - also start their own business and a recession is often a good time to plan and initiate such a project, with the domestic Indian market an attractive proposition for many budding entrepreneurs.
The message from all business school career directors is that this year MBAs have to be prepared for an intensive job search, complimented by career flexibility. But as long as global trade remains open, demand for international MBAs will remain resilient.