But when the rest of the economy burst, so did the MBA bubble. The result: The MBA class of 2002 is facing the toughest hiring environment of any since the mid-1990s--even with the economy's recent turn. Although smaller companies and once-snubbed industrials have picked up some of the slack created by the dearth of jobs at consulting firms and investment banks, there's little doubt that this year's MBAs have worked harder to land a job. "I have had to reset my expectations," says Oliver Churchill, a second-year student at the University of Pennsylvania's Wharton School.
The numbers tell the story: At many of the top 15 schools, an estimated 55% to 60% of the class of 2002 now have job offers, down from 65% to 70% at this time in 2000 and 2001. Students and career-services directors also report that pay for everyone from analysts to consultants has dropped 5% to 10% from early 2000. Signing bonuses, previously as high as $40,000, have also shrunk: $5,000 to $20,000 for investment banking and consulting jobs is now the norm.
Corporate job cutbacks explain a big part of the drop. This past fall--typically the height of the hiring season for upcoming MBAs--big recruiters such as consultants and investment banks canceled or scaled back campus visits in droves. Consultants alone cut hiring by 25% to 50%; they generally snap up about 30% of MBAs.
They weren't the only ones trimming jobs. General Motors Corp. slashed the number of MBA hires 70% from 2001, to 25 grads--about the same number as in the mid-1990s. And chipmaker Intel Corp. (INTC
) cut its MBA hiring by 50%.
Still, the reductions by consultants, banks, and high-tech companies that have recently dominated MBA hiring created opportunities for others. Recruiters from industrial companies such as 3M, Deere (DE
), and GE used to be shunned by MBAs. Now, these old-line behemoths are improving their talent pool by cherry-picking top B-school candidates. "Being a 124-year-old company suddenly looks pretty sexy," General Electric Co. CEO Jeffrey R. Immelt recently told a group of MBAs at the Wharton School. This spring, GE recruiters are even making two trips to Dartmouth's Amos Tuck School of Business--the first time they have hit the campus in years.
The downturn has also made it easier for smaller employers such as regional banks and boutique firms to nab top talent. Sprout Group, a venture-capital fund in Menlo Park, Calif., is getting its choice of star students at Stanford University's Graduate School of Business--at a 10% discount from the boom.
Of course, with the economy on the mend, the worst may finally be over for MBAs. Schools report that calls from companies wanting to schedule interviews or post jobs are up as much as 50% from last fall. Even the likes of Goldman, Sachs & Co. (GS
) and McKinsey & Co. are telling students that hiring could start up again this summer. Just in time for the class of 2003 to benefit. By Michelle Conlin and Jennifer Merritt, with Diane Brady and David Welch in New York