A New MBA is an Asset in a Tough Jobs Market
With unemployment skyrocketing, business schools are expecting a rise in interest and applications. Taking a break from the workplace to study for an MBA has been a popular career move during past recessions, as the degree can help secure a better job when the economy recovers.
The situation is more complex for those who are leaving business schools this summer. Most started their MBA courses one or two years ago with the goal of gaining a promotion or new career in a then booming economy. They are now entering one of the toughest jobs markets in years.
A survey last month by the MBA Career Services and Employer Alliance (MBA CSEA) among 118 business schools found that two-thirds had seen at least one job offer for their graduating students rescinded and 83 per cent said that start dates for some new graduates had been delayed.
“It does look pretty grim,” Megan Hendricks, executive director at MBA CSEA, says. “It might actually be worse if it was not for technology, which is helping some companies to retain people by allowing them to transfer to working remotely.”
Valerie McKay, 27, counts herself lucky among this year’s graduating MBA class at Georgia Institute of Technology’s Scheller College of Business. She started the postgraduate degree course in 2018, hoping to make a career switch from a programme manager role in the marketing department of Dish Network, a Colorado-based satellite television provider.
Last summer, she interned with Delta Air Lines, and secured a full-time role in the commercial strategy team after graduation. Then came the crisis. Last month, Delta said it would offer retirement and buyout packages in order to reduce its 91,000 staff. The airline has assured Ms McKay that it still wants her to join, although her start date is deferred to summer 2021.
“I was one of the fortunate ones,” she says. “I’m taking some time to pursue some personal interests and evaluate all my options before making a decision on how to move forward.”
The jobs market has ebbed for a significant number of Ms McKay’s classmates. About a fifth of Scheller’s 85 students were still looking for work when the course finished in April, according to Larry Faskowitz, MBA career coach at the school.
“For those students, it is tough. Some were looking for quite niche job opportunities so they have had to widen their net,” Mr Faskowitz says. “However, in general MBA students are going to be in better shape than other students here because of their unique skill set. Our undergraduates are in a much tougher situation.”
The coronavirus pandemic has created a double blow for graduating MBA students because they were also unable to celebrate on campus alongside classmates, says Sanjeev Khagram, dean of Thunderbird School of Global Management at Arizona State University. “The Class of 2020 just completed a historically challenging semester, and now masters graduates are facing the most difficult job market since 2008’s global economic crisis.”
More positively for the MBA Class of 2020, employers usually class business school graduates as a distinct hiring group. Significantly, the US tech giants — Facebook, Amazon, Google, Microsoft and Netflix — are still taking on large numbers of MBAs.
Amazon, for example, which was already a top recruiter on the campuses of several leading business schools, has taken on a record 1,000 MBA students worldwide this year, 20 per cent more than in 2019.
“We recognise that MBA students tend to fit well within our corporate culture — they are customer-obsessed, scrappy, and analytical,” says Brett Saks, director of student programmes at Amazon’s headquarters in Seattle.
“Covid-19 has shown us the need to move fast, pivot quickly, and be comfortable with certain levels of ambiguity. Talented MBA students often relish that type of working environment.”
Banks and consultancies are also maintaining high levels of MBA recruitment. Paul Bodine, founder of Admitify, an MBA admissions consultancy, says clients in the debt and fixed income operations of investment banks and consultancy firms say recruitment in their companies is as good, if not better, than before the pandemic.
“Clients in consulting are being pulled from their consulting projects to staff new advisory engagements with governments, advising them how to disperse Covid-19 economic relief funds . . . [so] are less likely to pull back on offers. Their business is not only surviving but blossoming in the crisis,” he says.
“On the other side, I have clients in investment management, hedge and mutual funds, who have been let go and clients in the mobility industry, for example Lyft, who are talking, not surprisingly, about mass corporate-side lay-offs.”
The relative advantage of having an MBA offers little comfort to the many students graduating from business schools without a job offer.
Jaldip Shah left an assistant vice-president role at South Korea’s Shinhan Bank’s Ahmedabad offices in western India to attend the one-year full-time MBA course at Lancaster University Management School in the UK. His wife and five-year-old son moved out of the family’s rented flat in Ahmedabad, staying with her parents to save money. When Lancaster closed its campus at the start of the pandemic, Mr Shah returned to India to complete his studies online.
His intention was to use the MBA to jump up the banking career ladder, perhaps into a fintech role in the UK. Mr Shah has sent about 40 applications but has yet to secure a job offer after graduation in September. He is not disheartened. “It is difficult, but I understand why the companies cannot commit to hiring because they cannot tell how long this crisis will go on,” he says.
“I have seen this once before because I was in the job market during the 2008 financial crisis and the jobs came back. I am pretty confident things will improve for me.”
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