Jack Oakes didn't like what he was seeing. As director of the Career Development Center at the University of Virginia's Darden School of Business, Oakes had watched the Great Recession choke off his students' job opportunities. The outlook was no better for the MBA Class of 2010.
By the end of February only 64 percent of students reported having received a job offer, even worse than the recession-era low of 69 percent in February 2009 (and well below the 81 percent in pre-crash 2008). In the world of elite MBA programs such as Darden, where graduates have come to expect multiple six-figure offers, this qualified as a disaster. Something had to be done.
On March 16, Oakes asked three of the school's best-known and longest-tenured professors to send an e-mail to alumni explaining the crisis and asking for help. The subject line: "A Darden Call to Arms." "It might not have been war, but for many of these students who were still looking for jobs, it sure felt like it," Oakes says.
Within hours, dozens of Darden alumni responded with job leads. By graduation in May, 77 percent of the class had job offers; three months later the figure reached 87 percent. "It was something we had never done in the past," Oakes says. "We didn't have to. But things are different now."
Because the financial crisis killed or downsized some of the biggest MBA employers, including Bear Stearns and Lehman Brothers, the B-school job search has grown far more arduous. That's clear from Bloomberg Businessweek's 2010 ranking of the top full-time MBA programs.
Consider this contrast: Three months after graduation in 2007, only 4 percent of grads at the 30 top U.S. schools did not have a job offer. That figure has risen to 12 percent, and at some schools it's more than double that. Even top schools lost ground. At No. 1 University of Chicago Booth School of Business, 9 percent of students were jobless at the three-month mark, vs. 2.4 percent in 2007, while No. 3 University of Pennsylvania Wharton School saw its three-month unemployment rate more than triple, from 3.9 percent to 13 percent, over the same period.
No longer can students rely on the traditional on-campus recruiting process. More than 40 percent of B-school career services officers saw a decline in on-campus visits this spring, according to the MBA Career Services Council (CSC). And when companies do come to campus, instead of having a dozen positions to fill, they might have two or three.
Starting salaries among all MBAs surveyed by Bloomberg Businessweek have dropped nearly 6 percent, from an average of $104,500 in 2008 to $98,400 this year. And students' plans are changing, with many settling for lesser positions. More than half of those surveyed expressed concern about the job market.
"I had to expand my job search to include potential jobs and industries I would otherwise have never considered," says Tyler Fenelon, a 2010 graduate of UCLA's Anderson School of Management (No. 17). He was able to find the private equity job he'd hoped for. "I consider myself very lucky," he says.
Schools are finding new ways for students to connect with companies that might not recruit on campus. At top-ranked Booth, the employer outreach team has tripled in size, from two to six, in the past two years. Last summer the team met with more than 350 companies, up from 100 in 2007.
"We definitely have more corporate relationships now than we did a few years ago," says Julie Morton, associate dean of career services. "We used to assume the relationship began when a company recruited on campus. Now a strong relationship is one where a firm thinks of Booth in terms of sourcing talent — posting a job, coming to campus, or simply interacting with students."
Schools are also teaming up to bring students to recruiters. In April, 128 students from seven schools — including Michigan's Ross School of Business (No. 7), Cornell's Johnson Graduate School of Management (No. 13), and Notre Dame's Mendoza College of Business (No. 24) — traveled to San Francisco for "A Day in the Bay MBA Interview Forum." The event allowed 36 Bay Area employers, including eBay, Electronic Arts, and the San Francisco Fed, to meet top MBA talent without having to incur the expense of traveling to each campus.
Technology also makes it easier for students to connect with recruiters. At Northwestern University's Kellogg School of Management (No. 4), Skype has become a familiar tool for job seekers, and when Stanford's Graduate School of Business (No. 5) begins its transition into its new Knight Management Center next spring, two Cisco TelePresence videoconference facilities will be available for remote interviews. Videoconferencing "gives students an opportunity that they might not otherwise have," says Cynthia Bush, director of recruiting at Houlihan Lokey, the Los Angeles investment bank.
The technology is especially valuable to companies that might hire only a handful of MBAs each year, says Gideon Gradman, vice-president for corporate development at Boston-based Ze-gen, a venture-backed energy startup. "It's not a perfect replacement for in-person interviews, but it's an enabling technology for companies like ours that are small and don't want to be limited geographically."
Before the job market soured, regional companies would not have been on the radar for many top MBAs, but now career services advisers are recommending that students not limit their job search to a single function, industry, or location. Those who have their hearts set on a "go-to" MBA position in finance should think twice. In late September, Bank of America began laying off employees in its investment banking unit; just a few days later Morgan Stanley announced a hiring freeze in its i-bank group for the rest of 2010.
"In the past, students have focused their internship and job search with one specific, singular path," says Nicole Hall, president of the MBA CSC and executive director of career services at Pepperdine University's Graziadio School of Business and Management. "Now students have to have a flexible outlook with two or three viable options that they pursue aggressively."
For some students, the best option is to change course entirely. After watching MBAs from the Class of 2009 at Brigham Young's Marriott School of Management (No. 27) struggle to find work, Anthony Strike decided to forgo his second year at the school. Instead of accumulating another year of debt, he dove into a full-time job search. After three months he landed a job as product manager at Apria Healthcare in Orange County, Calif. "It was the nontraditional choice," Strike says, "but it was the right choice for me."
Students are also being called on to provide assistance to job-seeking classmates. At Chicago, 39 second-year MBAs are serving as career advisers, meeting one-on-one with first-years to share their experiences in the internship and job search. Last spring student leaders at Indiana's Kelley School of Business (No. 19) created a group informally called the Jobless Lonely Hearts Club. Each week leading up to graduation, about 30 job seekers from the Kelley Class of 2010 met to share leads and commiserate over pizza and beer. Classmates who had already secured employment served as facilitators.
"At first it was awkward," says Darshan Shah, one of the facilitators, "but after those first couple of sessions, we started seeing results. It really brought our class closer together." Shah says at least five participants ultimately found jobs using contacts picked up from the club.
Happily, there are signs that the job market for MBAs is picking up. More than half of the top programs reported that a higher percentage of students from the Class of 2011 had returned to campus from their summer internships with firm offers. Sectors such as health care and energy are also increasing their full-time job recruiting activity, according to the MBA CSC. Peter Giulioni, assistant dean of career services at the University of Southern California Marshall School of Business (No. 26), expects the recruiting landscape to return to a more traditional model of primarily on-campus recruiting within 18 to 24 months.
Good news for the Class of 2012, perhaps, but cold comfort for this year's graduates.
Gloeckler is a staff editor for Bloomberg Businessweek in New York.
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