MBAs Confront a Savage Job Market

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The downturn was particularly hard on schools with strong links to financial services. At Wharton, where ties to the highest paid sectors of industry are legendary, Antonio says that the loss of consulting and banking jobs, while not as bad as the loss of tech jobs after the dot-com bust in 2001, set the school back significantly in terms of hiring. In the aftermath of the shake-up, she's not sure that the roaring years of unlimited banking jobs and the attendant lavish paychecks are going to make a comeback. "I think there's no question that in investment banking there's been a fundamental and major shift," Antonio says. "I think the playing field has been forever altered."

A Marathon

In a typical year, recruiters will show up on campus early in the fall to conduct interviews and hand out sweet deals laden with bonuses to their favorite candidates. But that didn't happen in fall 2008, at least not to the extent that it did in the past. When the September market collapse rippled throughout the financial industry, campus hiring nosedived, and hope for even a barely adequate placement rate quickly vanished. "After the massive layoffs, there was a point I was feeling that if we came in in the high 70s that would be the new normal," Kellogg's Hori says.

But the school's worst fears weren't realized. At Kellogg, roughly 85% of students eventually reported receiving an offer, and few others came in below 80%. Instead, much of the hiring happened months later than normal. Many companies shifted from hiring on an academic schedule, which requires the stability to sign on new employees almost half a year before they show up to work, to hiring on an as-needed basis—often making offers much later in the year.

"We knew it was going to take longer," says Eric Mokover, associate dean of career services for the UCLA Anderson School of Management (UCLA Anderson Full-Time MBA Profile). Last year only about 7% of students in the top 30 received their first offer in the three months following graduation, which is usually considered late for hiring. This year, that number was closer to 12%, despite the lower rate of offers in general. Now, nearly half a year after graduation, some students are getting their first word from companies. "We're still hearing good news every day," Mokover says.

Patricia Baione, a 2009 graduate of Columbia Business School (Columbia Full-Time MBA Profile), said she knew when she turned down a "great offer" in November that it was going to be a long haul. Indeed, the other early-term offers she was interviewing for never materialized, and she was left waiting for companies to hire later in the season. Nearly a year later she's still waiting. She spent some of the summer travelling, but she now spends her time volunteering, on LinkedIn, researching companies, and trying to meet with potential employers and industry experts over coffee. When she turned down the offer, she says, her outlook on the job search shifted. Says Baione: "At that point I changed my mindset from being 'I'm going to have a job by Christmas' to 'This is going to be a marathon, not a sprint.'"

A Different Finish Line

Early signs this year don't point to a swift recovery for the class of 2010. Some, like Brostoff, believe the coming months will be even worse. That means many students will end up taking jobs they might not otherwise have considered, he says, or returning to industries they came to business school to get out of. That could be both good and bad news for this recession's new grads.

Some students will discover jobs in new fields, try entrepreneurship, or travel to new countries. Instead of gravitating to a few companies that dominate recruiting, many schools say students are going to boutique firms or startups where they might be the only MBA hire that year. At Wharton, an increasing number of students are going overseas for work, Antonio says. And though some experts are predicting the class of '09 will leave their current jobs as soon as the economy recovers, many will stay put. "Students are opening their minds to new things," Antonio says, finding dream jobs in places they'd never dreamed of. "And that's a good thing."

Other students will stick to Plan A, even if it takes longer. Stern's Rosenberg, who's been in job search mode for the better part of a year, is still committed to finding something in the particularly distressed commercial real estate industry. So far, he's grown his proverbial Rolodex "exponentially," once meeting with 19 companies in a single four-day trip. If he doesn't get a job, he says, it won't be for lack of trying. Says Rosenberg: "I really couldn't be more optimistic about the next couple of years."

Paul Oyer, an economics professor at Stanford University's Graduate School of Business (Stanford Full-Time MBA Profile) and who has researched MBA compensation, says the dismal hiring climate could have an impact on this year's grads that extends well beyond the recovery. Simply by virtue of having fewer students take jobs in finance, Oyer says, this year's classes will probably see smaller paychecks on average over the course of their careers. There's no telling whether they'll also be more satisfied, but for better or for worse, says Oyer, the graduates of this year "are going to get started down a very different path than the grads from a just a couple of years ago."

Anne VanderMey is a B-schools writer at BusinessWeek.

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