According to a recent article in the Economist, business schools and MBA students are notably upbeat despite an economic downturn impacting organizations that are often their prime recruiters – namely those in the financial services and banking industries.
According to the Economist report, several factors fuel this unusually hopeful outlook: No one knows for sure just how bad the economic situation is (or isn’t), MBA students themselves seem more realistic and pragmatic than in downturns of the past, and though top job offers are down, MBAs have not yet faced having their internship or job offers withdrawn (save the particular case of Bear Stearns).
News from the schools and elsewhere echo the Economist report. Berkeley’s Hass School of Business Career Center reports that job opportunities for Berkeley MBA students during the 2007-2008 recruiting season actually increased by 5 percent over the year before and that salaries are holding steady.
“It is a tighter employment market, but we have seen MBA hiring continuing,” said Abby Scott, executive director of MBA Career Services. “Some of the firms who are laying off are continuing to hire fresh talent.” Summer internship hiring has also increased over last year, according to Scott.
London Business School also reported high job placement rates among its students this recruiting season. “We are thrilled to that 2007 has been another strong year for our hugely talented MBA class with an impressive 97 percent receiving an offer of employment within three months of graduation,” Diane Morgan, director of LBS career services, said in a January statement.
Findings from the annual Corporate Recruiters Survey conducted by the Graduate Management Admissions Council reflect the same optimism.
That said, there could still be hard times ahead. According to Haas’s Business Career Center, online job postings have dropped, suggesting that companies are resorting to “just-in-time hiring” as a result of weakening economic conditions. “As we look forward to next year, we’re anticipating a little bit of a downturn as we experienced during the last cycle,” said Haas’s Scott.
What impact does this have on MBA admissions? Often, business school admissions run counter-cyclical to the economy – spiking during downturns as some look to MBA programs as a place to ride out the storm. Sometimes, though, those with jobs choose to hang onto them.
Application rates so far have shown no sign of decrease. In fact, almost 60,000 students took the GMAT in the first three months of 2008, a 12 percent increase over the same period a year before.
Generally speaking, the perceived value of an MBA doesn’t usually fall even if job prospects for current MBA grads do begin to falter. In fact, the MBA degree can under those conditions be the factor that helps secure a job for candidates in an increasingly competitive market.
The Economist report praised students and schools for their level-headedness. “Overall, business schools and their students seem to be displaying a laudable maturity, refusing to panic—at least for now—and stressing that the MBA degree has long-since stopped being a golden passport to a well-paid and secure job,” read the report. “Many are well aware of the economic downturns of the past, notably the global recession of the early 1990s and the dotcom crash a decade later. Neither did much to dent the long-term attractions of the MBA.”
