HOW TO BULLETPROOF YOURSELF FROM THE SLOWDOWN IN MBA
RECRUITMENT
By Dominic Basulto
Theoretically, business school is about gaining new
skills and insights into business, meeting new colleagues, and learning
the intangibles of becoming a manager. In other words, everything that’s
in a typical admissions brochure. In practice, business school is about
the business of getting a new job. Traditionally, an MBA from a prestigious
business school has been a path to improved career prospects and a sizeable
jump in total compensation. During an economic boom, many graduates
from top B-schools such as Harvard or Wharton could expect seven or
more job offers with each offer valued at more than $100,000.
With the economic slowdown in U.S. now spreading to
Europe, though, many career placement directors at leading B-schools
such as Chicago are now predicting an across-the-board 20-25% reduction
in MBA hiring, with some high technology companies such as Cisco placing
an unofficial moratorium on hiring until 2003. Some economists are now
predicting an extended worldwide recession, which will further dampen
MBA recruiting efforts. As one Wall Street Journal article commented,
“The recruiting forecast for MBA students this fall grows darker
by the day.” Given this note of pessimism and the concern voiced
by many Russian applicants, below are five tips that will bulletproof
MBA applicants from the slowdown in business school recruiting.
UNDERSTAND THE “FLIGHT TO QUALITY” EFFECT
Too many applicants assume that receiving an MBA from
a top-tier business school is an automatic entrée to high-paying
jobs in the corporate sector. Yes, an MBA does prepare one for a challenging
position at an elite investment banking, consulting, manufacturing,
or information technology company. But there are many external factors
that shape the recruiting cycle for MBA applicants- especially since
many post-MBA positions are considered “entry level” positions
that are easily eliminated in the name of “cost-cutting.”
In the boom years, an average candidate from a top B-school might expect
anywhere from 4-6 job offers, and even graduates of lower-ranked business
schools could expect at least 1-2 solid offers from prestigious companies.
When the economic cycle turns (SEE GRAPHIC), however, these offers suddenly
disappear. In essence, the top business schools are able to “crowd
out” lesser-ranked rivals, based on their clout and prestige with
recruiters.
Graduates of the “blue chip” MBA programs
have a pronounced advantage, since overall, there is always a “flight
to quality” during economic downturns. Companies still need to
recruit, and will turn to the biggest, most established B-schools. An
easy way to estimate a business school’s quality is by looking
at its recent career placement statistics- and especially scrutinize
the number of students placed with the “elite” recruiting
companies. Typically, these “elite” companies are defined
as the leading multinational consulting companies and investment banks.
Thus, a top-ranked program like Kellogg can boast of its tremendous
track-record in placing graduates at consulting companies like McKinsey
(39), Boston Consulting Group (19), and Bain (18) while Chicago can
point to its demonstrated strength with Wall Street recruiters: Goldman
Sachs (17), Lehman Brothers (21), and Merrill Lynch (17).
ANALYZE THE RESOURCES OF THE CAREER PLACEMENT OFFICE
With many companies looking to contain costs given
variable profit forecasts for the next 6-18 months, Russian students
should understand that, unfortunately, their citizenship does place
them at a disadvantage in the recruiting process. If MBA jobs are a
limited resource during a recession, and companies are looking to cut
costs, then it means that hiring Russian candidates for a job in New
York or London is something of a luxury. Moreover, the easy business
decision is to simply repatriate any new hires back to Eastern Europe
or Russia, where salaries are significantly lower than in the West.
The Wall Street Journal recently profiled foreign MBA students who were
offered consulting jobs only in their home countries at a total annual
compensation of $10,000-$20,000—far below the now-mythical $100,000
figure some applicants expect after graduation.
In order to pre-empt the concerns of top recruiters,
Russian applicants need to understand reasons for their disadvantage
during the recruiting season. Within the US, foreign candidates are
perceived as lacking knowledge of U.S. culture and fluency in English—two
facts that are only compounded by the difficulties of obtaining H-1B
visas for work in the USA. At some U.S. business schools, approximately
50% of recruiters absolutely refuse to meet with international students.
Even recruiters that do meet with international students enter the recruiting
cycle with their own biases. As one East Coast recruiter noted, “My
policy is, if I can’t pronounce the name, I throw the resume away.”
Business schools that are dedicated to their foreign
students will offer a number of resources to counteract these concerns
- possibly including a dedicated career counselor for international
students, special seminars on visa issues, and short sessions on topics
like networking and even “accent modification.” Also check
out the rankings for different career placement offices, including those
given by both alumni and recruiters- these can indicate business schools
that offer additional value. Or consider the most recent Wall Street
Journal business school rankings, which are based solely on recruiter
scores- resulting in some surprising findings. Stanford, usually considered
a “Top 3” business school, fell to #45 when considered from
a recruiting perspective. Of the top European B-schools, INSEAD was
ranked #28, IMD #33, and London Business School #39.
FOCUS ON THE ALUMNI NETWORK
For many career placement offices, the alumni network
is the single biggest factor in generating new opportunities for students
that are relying on off-campus, rather than on-campus recruiting. Here,
the Ivy League B-schools (Harvard, Dartmouth, Yale, Wharton, Columbia,
Cornell) are nearly unparalleled for the depth, loyalty, and diversification
of their alumni networks. The director of Yale’s career development
office, in fact, notes that 60-80% of all new job opportunities not
offered through on-campus recruiting derive from alumni connections.
When comparing various rankings, then, consider the effect of a large
alumni network.
Just being a large B-school, though, does not automatically
mean that the alumni network is powerful. Of more importance is the
existence of regular alumni networking events, the ability to access
online alumni contact information, and the presence of alumni clubs
in every major business center of the world. Importantly, business schools
should have proof of their ability to place candidates internationally.
For instance, while Dartmouth’s alumni network is among the strongest
in the world from a loyalty perspective, it is limited to three major
regions- New York, Boston, and San Francisco.
CONSIDER MACRO-LEVEL FACTORS THAT AFFECT RECRUITING
Finally, candidates should evaluate “macro-level”
factors such as the size of the MBA program and the geographic location
of the B-school. In general, size matters. Bigger B-schools have more
established links with recruiters and more “muscle” to force
recruiters to hire their graduates. Moreover, recruiters are relieved
at the greater choice that they have in students and the opportunity
to meet many of their hiring needs at only a handful of MBA programs.
As one recruiter from Ford Motor commented, “There’s not an
awful lot of sense to sending a cross-functional team out to a school
to bring back one individual.”
Regarding geography, it is important to consider the
economic base of the city or region where the B-school is located. If
firms on Wall Street are cutting, it means that B-schools in the New
York tri-state region such as Columbia or NYU Stern will experience
a pullback in recruiting activity. If firms in Silicon Valley are cutting,
it means that B-schools in California such as Stanford will experience
a pinch in recruiting efforts. While it is true that these B-schools
will likely experience a drop-off in recruiting activity, imagine the
economic effect on an MBA program located out of these regions! Even
highly-ranked B-schools in Tennessee or North Carolina will lose out
in the race to place candidates with top Wall Street firms once an economic
slowdown hits. In general, U.S. business schools in major urban locations
such as New York, Chicago, San Francisco and Boston offer the greatest
protection, due to their more diversified economic base and concentration
of headquarters of the leading multinational companies.
CONCLUSION
Thus, candidates should take a closer look at the
selection process for choosing B-schools, isolating those factors that
will bulletproof them from an economic slowdown. Too much emphasis is
usually placed on the overall ranking of an MBA program, rather than
careful due diligence about other key facets of a business school program.
Factors such as the strength of the career placement office, the size
and extent of the alumni network, the existence of resources for foreign
students, and the perception of the B-school from a recruiter’s
viewpoint are all important. While B-schools with two-year programs
offer more “protection” from a sustained worldwide economic
recession, attempting to “market-time” entrance to B-school
is a losing strategy. By following the steps enumerated above, candidates
can maximize their chances of finding their “dream job” after
graduation from an MBA program, whatever the current economic environment.
GRAPHIC: MAJOR JOB CUTS ANNOUNCED IN 2001
BY MBA RECRUITERS
