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Joe Kight, a first-year student at Texas A&M University's Mays Business School (Mays Full-Time MBA Profile), says he knew the slow economic recovery would make for a difficult internship search. That's why he immediately headed to the career center on campus when he arrived at business school. His goal: to find a finance internship by the fall, when most of those firms are known to make offers to summer hires. With alumni contacts in New York in hand, he went to potential employers himself and found out about opportunities he never would have discovered on campus, he says.
A former commercial banker in San Diego, Kight landed a finance internship with Citigroup (C) in January, thanks in part to his previous experience. And he's far from alone. Top schools are reporting that the percentage of first-years with internship offers is up from a year earlier, with some programs seeing increases of 10 percentage points or more. Hiring by consulting firms is driving much of the increase, but banking, consumer packaged goods, and energy all had gains, as companies seek to refill talent pipelines neglected during the economic downturn.
Of the top 30 business schools in Bloomberg Businessweek's 2010 ranking of full-time MBA programs, 12 reported the status of internship hiring, including six that reported big increases.Among them: Northwestern University's Kellogg School of Management (Kellogg Full-Time MBA Profile), Carnegie Mellon University's Tepper School of Business (Tepper Full-Time MBA Profile), and Cornell University's Johnson Graduate School of Management (Johnson Full-Time MBA Profile). At the University of Minnesota's Carlson School of Management (Carlson Full-Time MBA Profile), 57 percent of internship-seeking students have offers, up from 35 percent a year earlier.
Only one program reported a decline in internship hiring, albeit a small one. At Georgia Tech's College of Management (Georgia Tech Full-Time MBA Profile), 57 percent of first-years reported summer job offers, down from 58 percent a year earlier. Many schools declined to supply internship hiring information until the academic year is over.
Despite the generally positive hiring numbers, it is optimism of the cautious variety that rules the day. Career services directors say the playing field has changed dramatically for MBAs since the recession hit in 2008, with everything from how students find internships to what is expected of MBA interns on the job undergoing a profound and permanent shift. They call it the "new normal."
For starters, even though salaries have increased slightly throughout the recession in some industries, the year-over-year advances are not what they used to be, says Jim Dixey, director of graduate business career services at Mays. Three years ago, he says, one student with little experience was offered a position with a $129,000 annual salary, while another student, who considered the same position a year later, was offered $20,000 less. Although there is some money available to MBAs, there are fewer opportunities than before, he says.
"Someone is always saying the recession is over. They must be on crack," says Dixey. "Down here in the trenches, we're seeing a strong sense of caution on the part of employers to commit to hiring because of uncertainty."
With a Presidential election on the horizon, uprisings in the Middle East, and the Japanese nuclear crisis, companies might hold back from hiring to see how events unfold and influence the business climate, their earnings, and their talent needs, says Deanna Fuehne, executive director of the Career Management Center at Rice University's Jones Graduate School of Business (Jones Full-Time MBA Profile).
Thanks to this uncertainty, many more companies are hiring interns and full-time employees year-round as opposed to the respective fall and spring cycles of yesteryear. Many schools expect to see more internship and full-time offers coming in May rather than companies making earlier commitments only to discover the interns are not needed.
Ivan Kerbel, director of the Career Development Office at Yale School of Management (Yale Full-Time MBA Profile), says some recruiters returned for off-cycle hiring in 2011 because of unmet needs. In fact, many career placement directors say that because MBA hiring was down for the last couple of years, companies are now forced to invest in personnel.
"The real cause for the increase of recruiting MBAs is the pipeline of future managers and executives was getting light," says Fred Staudmyer, assistant dean for career management at Cornell's Johnson School. "You can't have a gap in your structure."
But that doesn't mean MBA students are calling the shots, says Dixey. No longer can MBAs take jobs for granted or just expect to earn a degree, take an analyst job for a few weeks, and then be named to an executive position, he says. "This crisis told MBAs, 'You are not the messiah,' " says Dixey.
To survive in the new normal, MBA students have had to change their attitude and their approach to the job search. Nowadays, recruiters expect potential employees to come to them. Fewer are recruiting on campus. Many recruiters are coming to campus via videoconferencing or job posts rather than paying for travel expenses, says Pam Roberts, executive director of MBA programs and graduate career services at Indiana University's Kelley School of Business (Kelley Full-Time MBA Profile).
Career centers at top business schools also have a new purpose. Whereas before they wooed recruiters and brought them to campus, now they are more focused on educating students about how to find opportunities on their own and stand out on the job.
"We have had to teach students to be more aggressive and better promote themselves in the market," says Staudmyer.
Still, virtually no one is convinced that MBA hiring for internships or full-time jobs will return to what it was pre-recession.
"Companies are doing more with fewer people," says Dixey. "That doesn't bode well for a sudden surge in hiring. People who believe this will happen should say hello to Peter Pan tonight."