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Monday, February 16, 2009

MBA Recruiting and how to really look at it

This article in the Wall Street Journal looks at the economy from the perspective of MBA recruiting. As expected, students with job offers at schools like Carnegie Mellon has dropped from 81% to 61% from last year. More businesses are offering less jobs than last year. Words like "blood bath" are used to describe recruiting.

I italicized last year because the article benchmarks this recession-ridden year to a year where the some industries were still bloated from the easy credit binge. Comparing a year where 3 major MBA employers disappeared to a year where those three were hiring hundreds of MBA's is not a comparison of the same fruit. In general the article that points out that things were worse a year ago with some easy data and a few snappy quotes from current students. The analysis is like pointing out how winter is a lot colder than summer. Comparing this recruiting year to previous recession years like 2001-2002 would have been much more insightful. That is right before the time that I graduated so I unfortunately had a front row seat to the post dot.com/corporate scandal recruiting environment.

There was one really good point raised in the article which is:

"The system they (career management) have in place now seems to be one that works very well when the economy is good, but now that there are no employers coming -- no one knows what to do,"

This is a quote from a Wharton student in the article that consistently rings true. During the boom times, career management needs all of its resources to coordinate the armies of traditional companies that hire MBA's and make sure that everyone behaves themselves. There is not the time to court non-traditional or smaller companies for MBA hiring and students are not as interested in these same companies.

During recession times, career management has to change their strategy and ramp up. Likewise, students have to quickly switch from deciding which recruiting dinner to attend or comparing company trinkets to hustling and networking. It's a different recruiting mind set for all. There is no easy solution because during the boom times, the traditional MBA companies are out in force and really competing for talent. This requires a lot of time from career management. Trying to make sure that non-traditional and smaller companies still receive sufficient attention is like trying to get someone to make a beer run during a party. No one is going to want to leave the fun until the keg is dry.

However, with this recession, I don't know if the non-traditional or smaller companies are hiring either. Savvy companies may try to get a fancy MBA student that they otherwise couldn't attract. This is the time period where MBA applicants do question if an MBA is worth it at all. Like any investment, it's recouped over time. This article below looks at salary (which is one way to measure the MBA investment) over 5 and 20 year horizons. There are some surprise schools in the ranking but overall the fancier schools have a higher return. The salary information does allow someone to see a median salary farther out into the future.

One year does not truly measure the MBA investment. While recruiting is lower this year, it can be expected to recover and follow the business cycles. The 20 year salary horizon does show the median increases to be expected. Career management, students, and companies will adjust as they have in the past but unfortunately, there is not an easy way to adjust recruitment to the business cycles quickly. My class watched the experience of the class of 2002 with the recession and both career management and ourselves were better prepared for it the following year. It's never easy but it requires a longer time horizon.

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