EMPLOYMENT BLUES: For the second year in a row, business-school students are struggling to secure a job once they graduate, even from the US' best universities
BLOOMBERG
Tuesday, May 06, 2003,Page 12
Concerned by the bleak job outlook for his graduating MBAs, Jeffrey Garten, dean of the Yale School of Management, dispatched an appeal to alumni.
"Industries that traditionally hire MBAs have been hit particularly hard in this economic downturn," Garten wrote in March.
He asked alumni to "help where you are able" by hiring Yale's newly minted masters of business administration.
With the US unemployment rate at an eight-year high, business school deans nationwide are repeating Garten's message.
For the second year in a row, graduating MBAs -- who have spent as much as US$122,000 to gain the coveted business degree from such schools as Yale, Harvard and Columbia universities -- are struggling to secure employment. Since March 2000, New York-based securities firms alone have shed 79,500 jobs.
"I am not in panic mode yet, but I am considering bartending," said Harrell Smith, 30, a former trader for BNP Paribas SA who's about to get an MBA from Columbia, in New York City.
Smith is trying for a management position in finance or media, yet concedes: "I'm getting progressively more upset and depressed."
A Duke University survey of MBA students at 10 US schools found that 60 percent had a full-time job as of mid-March, compared with 86 percent in 1998. Two percent reported that their offers were rescinded.
The survey said annual starting salaries for graduating MBAs has remained "relatively flat, at US$87,808 this year, versus US$86,540 three years ago."
"It's the toughest recruiting environment this school has seen in a long time," said Matthew Merrick, the director of career services at the Harvard Business School.
Like Garten, Harvard Dean Kim Clark sent letters to more than 60,000 alumni asking for help, Merrick said.
"One of the key things we have going for us is that alumni hire our students," Merrick said.
About 900 students will graduate with Harvard MBAs in June and Merrick said a bit more than three-fourths have at least one offer.
"Five years ago, the percent would have been 90 to 95," he said.
Deborah Farrington, the director of the Harvard Business School's alumni association and the founder of StarVest Partners LP, a New York-based venture capital firm, regularly fields calls from students seeking job advice and tries to counsel them.
"It's a very tough time," she said. "The type of call I get is, `I'm really interested in private equity. How do I go about it?' And I tell them, `Look, there are not a lot of people hiring."'
Garten declined to be interviewed.
When Smith and other members of Columbia's class of 2003 were applying to graduate programs three years ago, the era of multiple job offers, signing bonuses and other perks for MBAs had just started to wane with the collapse of the dot-com sector.
"It was still a buyer's market," said Smith, who interned at Yahoo Inc.
Now, he's struggling to get interviews in his field.
"The feedback we are getting from recruiters is that for each job, there are 500 resumes," Smith said. "All things considered, life could be a hell of a lot worse. Most of us feel it's just an unlucky break to be graduating in this economy."
Last year, 65 percent of students at the Stern School of Business at New York University and 70 percent of students at Columbia graduated with jobs in hand, according to school officials.
The US economy lost 48,000 jobs last month and the unemployment rate climbed to 6 percent from 5.8 percent in March, the Labor Department reported on Friday. Banking, securities and consulting firms have all curtailed hiring, recruiters say.
Gail Sobel, a partner at New York recruitment consultant Prescott, James & Thomas, said many firms that recruited MBAs in the past aren't bothering this year.
"They can't even think about MBAs when there are so many good seasoned people out there," Sobel said.
Nancy Pascal, managing director of AlleyRecruiting LLC, a Wall Street recruiting firm, said demand for new MBAs has declined since 2001.
"The market is already overflowing with highly qualified individuals that hold strong degrees and credentials that have been out of work for one to two years," Pascal said.
"New graduates and seasoned M.B.A.s are competing for the same jobs," she said.
Alison Corazzini, the head of investment bank recruiting for J.P. Morgan Chase & Co., said the bank is offering slightly fewer jobs this year than last, while declining to provide numbers.
"It's much harder for people to get in the door now," Corazzini said.
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