MBAs: Uncle Sam Wants You

With the private sector job market more dismal than ever, suddenly government and nonprofit jobs are some of the hottest tickets around

By Anne VanderMey

At the McCombs School of Business at the University of Texas at Austin on Feb. 9, dozens of students crowded a classroom for an evening career workshop, breaking an attendance record. The scene was typical of B-school campuses across the country—with jobs in short supply, recruiters are finding themselves more courted than ever. What was different, though, was that this wasn't an event for investment banking, management, or even consulting. It was a pitch for nonprofit and government work.

Uncle Sam has never been very popular with MBA graduates, most of whom are accustomed to the hefty signing bonuses and competitive salaries in private industry. But with the U.S. shedding hundreds of thousands of jobs each month, many companies freezing wages, and an MBA job market turning more dismal by the minute, the stability of government is starting to look a lot more appealing.

At McCombs, Director of MBA Career Services Stacey Rudnick said 70 people came to a workshop called "MBA Jobs You've Never Considered," the largest turnout in recent memory for a spring career workshop. Usually, by this time of year, students already have jobs lined up. "Students are looking for every opportunity, every bit of new information that might help them extend or broaden their search," Rudnick said.

Luckily for MBAs, the interest is mutual. Career services directors predict that government and nonprofit hiring will increase this year, though it's too early to say by how much. According to recently released data from the Career Services Council, 35% of schools reported an increase in recruiting activity for government and 12% reported an increase in the nonprofit sector, even as overall recruiting activity was level or down at 75% of schools. Net Impact, a nonprofit group dedicated to using business skills to affect change, said social sector job postings more than doubled last year. The recruiting Web site for the U.S. government lists tens of thousands of vacant business-related positions, and with an incoming administration bent on job creation, that number is likely to grow.

Better than Nothing

Business schools have already been seeing some movement toward nonprofit professions, though historically those students have been outnumbered by investment bankers and consultants. Few new graduates—4.4% last year—typically take positions in nonprofits or government, says Kip Harrell, president of the CSC and vice-president for professional and career management at Thunderbird School of Global Management. However, the financial crisis and the scarcity of six-figure offers, could accelerate the do-gooder trend. Patrick Perrella, the director of MBA career development at the University of Notre Dame Mendoza College of Business, broke it down this way: It's an easy decision "if your choice is a government job at a lower salary or no job at all."

The salary disparity may be narrowing, though. A recent survey by the Graduate Admission Council reported that about 80% of nonprofit and government respondents were actually poised to raise incoming MBA salary in 2009, by far the most of any group. However, they also had by far the lowest salaries, with average starting pay for MBAs just $63,176. For consultants, it was $92,931.

Even a slight decrease in private sector pay may be enough to tip some graduates toward idealism, though. Vanessa Leong, a 2008 graduate of the George Washington University School of Business, always wanted to make a difference, but isn't sure if she would have taken her current, nonprofit position if the economy had been better. "If I had really had offers and offers pouring and pouring in with big, big money, there's a chance I wouldn't be here," she said.