2009 is likely to go down is U.S. history as the year of anxiety. Some 15 million people are out of work today, twice the number unemployed in December 2007, at the start of the recession. The 10% unemployment figure is only the tip of the iceberg. If part-time workers and those employed below their skill level are included, the underemployment rate is close to 25%, the highest in at least seven decades.
The current recession has affected job offers for the MBA class of 2009. According to recent data reported to BusinessWeek, 16.5 percent of job-seeking students from the top 30 MBA programs did not get an offer by the time schools collected their final fall employment data three months after graduation. In 2008 that was true of just five percent of students. According to Mark Case, Director of Career Services at the Mason School of Business, The College of William and Mary in Williamsburg, Virginia, only 58% of graduating MBAs reported having accepted job offers, compared with 80% the previous year. There are some signs that a small uptick may be in the offing for spring 2010 MBA recruiting, but I'm predicting the needle won't move very far, he says.
In spite of the cloudy employment outlook for 2010 hiring of MBA is continuing, though not at the record numbers seen before the recession. NC3, the nations largest provider of administrative and logistical support to campus recruitment programs in Fortune 500 companies, (the 500 largest industrial corporations in the US, published annually by Fortune magazine) has seen MBA employers become more resourceful in the economic downturn. We've seen a greater sensitivity to recruiting costs at the MBA level. Employers are still hosting recruiting events, but they are keeping them simple and understated, says Mike Iserson, NC3's founder. According to Iserson, companies are still visiting campuses but are combining multiple recruiting events into the same visit. They are continuing to avail themselves to students who want to speak to current employees about their experiences, realizing that students appreciate personal touches.
Financial services continues to have a strong pull for MBA candidates despite the negative press the banks have received for their contribution to the worst credit squeeze since the Great Depression.
According to the Graduate Management Admission Council, a non-profit group that administers the GMAT, one third of full-time MBA candidates still hope to pursue a career in finance. Goldman Sachs, the leading New York based investment bank, hasn't seen any decline in job inquiries from MBA students since last year and they expect hiring to pick up in 2010. David Viniar, Goldman's CFO told analysts and reporters at the announcement of the firm's fourth quarter earnings in January that he anticipates a rise in hiring in 2010. Sandra Hurse, Vice President of Global Recruitment at Goldman was recently quoted in BusinessWeek as saying, Our applications numbers remain on par with previous years, and attendance at our recruiting events on campus this year were high. One factor that continues to drive MBA interest in finance careers is simple economics - with tuition and fees at top full-time MBA programs averaging $90,000, many students remain enamored with the prospect of a lucrative Wall Street career.
For employers in the Midwest, the center of the auto and manufacturing industries, the challenges of recruiting for non-sexy industries in less desired locations are unique. Yet, these challenges represent an often unexplored opportunity for MBAs. From the perspective of Jeff Beavers, Director of Talent Acquisition at Whirlpool Corporation, a manufacturer of major home appliances, becoming more strategic is a necessity for attracting top talent.
Beavers has found that sponsoring case competitions and utilizing classroom case studies is an effective way for Whirlpool to garner MBA interest. Additionally, we continue to provide our summer interns with compelling experiences to ensure they will serve as outstanding campus ambassadors and net promoters of our company and opportunities, he says.
Another Midwest based company, Eaton Corporation, a global power management company, is another example of a company that offers interesting opportunities for MBA candidates. Although not a household name, Eaton is strongly committed to developing innovations that enable customers to reduce energy consumption, an appealing message for MBAs interested in green companies. Casey Watson, University Relations Manager at Eaton agrees that strategic on-campus activities are critical to building Eaton's brand with MBA students. Our focus throughout this downturn has been on our leadership development program participants, but we're trying to increase our overall presence with our target audiences through support of various clubs and campus events, says Casey.
This year Eaton was the presenter of the case competition to the first year MBA class at Indiana University's Kelley School of Business. This allowed us to build solid connections with many of the first year MBA class in anticipation of hiring for fall of 2010. We've also focused on specific clubs that allow us to reach an audience interested in the areas that Eaton is focused on, whether that is sustainability, net impact, or a functional area such as general management or operations.
Another option for pending MBAs is making their own jobs. The number of recent graduates starting their own businesses increased to nine percent through the third quarter of 2009 compared with five percent at the end of 2008, according to Challenger Gray and Christmas, a global outplacement consultancy. Given the state of the economy, and the state of the job market, many young people are getting the push they needed to become entrepreneurs, says Bo Fishback, Vice President of Entrepreneurship at the Kauffman Foundation, a nonprofit organization that promotes entrepreneurs. It's a lot easier to decide to launch your own company when there aren't a lot of jobs out there.
This is supported by the latest QS research, which shows that interest entrepreneurship and jobs in sustainability saw significant rises among the MBA candidates of 2008-9. With finance still insecure, in recruiting terms, MBAs as well as recruiters are getting smarter, talking more to their career services, thinking about alternative roles to the traditional banking and consultancy roles, and redefining what it means, in some cases, to be an MBA.
Early signs don't point to a swift recovery for the class of 2010, but MBAs should not despair. MBAs remain in the top 25% of all earners nationwide. Although times are tough, there are still many opportunities for MBAs and employers willing to be innovative and flexible in their approach to the job market.