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Time was MBAs wanted to become only consultants or investment bankers. Now, entrepreneurship is all the rage on campuses. Increasingly,
business-school students are there to glean the skills to start their own businesses or -- if they go the consulting route -- to advise young companies.
That's great news for entrepreneurs, who finally have a chance at competing with the heavyweight consultants and banks for this talent pool.
Unfortunately, B-schools' seasonal placement rituals -- in which recruiters sign up cohorts of students months in advance of graduation -- are quite at
odds with the real-time needs of small companies. That's a disconnect that business schools are only just starting to remedy.
To find out how small businesses can tap into the B-school placement machine, Business Week Online's Jeremy Quittner spoke with Glenn R. Sykes,
director of MBA career services for the University of Chicago's Graduate School of Business. In its last business-school survey (1998), Business Week
ranked the University of Chicago third in the U.S. Here's an edited transcript of their conversation:
Q: What can a small business do today to recruit students with MBAs from high-caliber business schools?
A: One way is to start working with the talent while they are still students. Small businesses have tons of needs, and there are students who need
part-time work while they are here. Small-business consulting groups, for example, can offer part-time experience in a major metropolitan area like
Chicago. Students could do market assessments, and research. They can do financial analysis or strategic analysis.
Q: What are other things small businesses can do?
A: Working with the school's entrepreneurship program, making sure alumni are involved, and attending alumni activities. Students look to those
activities to meet alumni and to network. This fall, we had an entrepreneurship venture-capital conference, and there were 350 attendees. It was a great
place for entrepreneurs to go but also to meet students who are attending. Volunteering to speak is another way to do it.
Q: How do small businesses approach you to interview students?
A: There is a scheduling process. Usually, it occurs in the spring. Our date is Mar. 31, when we actually will begin to take room and date
reservations for recruiting activity. [Sometimes] this model does not work too well for a small business. It may not be planning in March of 2000 for
hiring in June of 2001, so we try to be flexible in terms of always having space available.
We have the flexibility to do things "off-process" and at off-times. We also offer alternatives like a job bank. This year we will have about 2,000
jobs posted to that, and that's another way for a small business to find talent.
Q: Do New Economy businesses, the dot-coms, or high-tech businesses have a better chance of hiring MBA students now?
A: I think they present a more attractive opportunity for today's MBA graduates. The chance to be part of the New Economy, and what is perceived as
the forefront of the changing economic scene, has a lot of appeal to students. They feel like this is their opportunity to be part of something that is
new and revolutionary, and a small business operating in that arena offers somebody that.
Q: What about Old Economy small businesses? Do they have a chance?
A: Firms in [more established industries] can offer better learning opportunities. They can present themselves as having more stability, and that is
a good thing for some students who want stability and security.
Q: What are some of the compensation incentives that New Economy businesses are offering?
A: Their compensation packages tend to be multipronged. They include salaries and sign-on bonuses, and sometimes a guaranteed yearend bonus. Newer
startups are offering stock options as an incentive, sometimes to balance a lower-than-expected salary. Depending where the startup is in its stage of
funding, it can also offer a very competitive salary. They are offering the options as a way to balance the risk.
Q: What do some typical starting salaries look like, at startups vs. bigger busineses?
A: I think that gap is closing. Our median salary, taking all offers into consideration, is about $80,000 to start out.
Q: What are average signing bonuses and average guaranteed bonuses?
A:The median sign-on bonus around here is probably around $25,000. Our median guaranteed bonus is going to be around $30,000 this year.
Q: What kind of jobs are students finding at small businesses?
A: They are finding jobs like business development -- selling the business to strategic partners. That is definitely the big one in terms of interest
from the companies, as well as on the student side. Also strategic-planning jobs. And there are opportunities for chief financial officers -- depending
on the size of the business and whether someone graduating as a 28-year-old has the kind of experience they need.
Q: What about for big business? What are the typical jobs MBA students find there? What is the difference?
A: Medium-size or big businesses offer a much more structured starting point. Often there are tracks: "You will be in the training program for three
months, and then we are going to put you out here, and you will stay at this associate's level for two years, and we will put you onto the next level."
There is a lot more definition over the length of time you will be in a career, what you are going to be doing while you are there, and what the company
is doing for you while you are in that position.
It is hard for a smaller company to [define a career path]. It is much more fluid. It's an important question for students to ask when they are
thinking about entering the startup world. What is their tolerance for ambiguity and flexibility, to know that when you come in that morning, you may not
know what you are going to be doing that day?
Q: What's the attitude of students today? Do they want to work in a nontraditional, small-business environment?
A:We do a quarterly survey of students. We ask how many are doing primarily an off-campus, nontraditional search -- and that comes out to 15% to 20%.
About 50% say they are primarily doing on-campus [traditional] searches. That leaves about 30% who say they are doing both.
Q: How has the boom economy changed MBA students' expectations in the last five years?
A: They expect schools to be putting a lot of effort into developing new relationships with New Economy businesses in addition to relationships with
traditional businesses like investment banks, management consultants, and manufacturing businesses. MBA students [want] the school to stay relevant in
the job marketplace. They expect us to have information resources that support a wider breadth of career opportunities. I think they also expect schools
to have expanded expertise available [to help analyze] compensation packages, which are much more complex than they used to be.
Q: Do more MBAs typically want to start their own businesses?
A: You hear so many business-school students talk about wanting to start their own businesses. They have a two- to three-year horizon: "I am going to
do this as my first job out of business school, and then I want to start my own business." They expect schools to provide them some sort of foundation
and also the chance to network.
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