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A dismal job market has MBA students, graduates, and alumni competing like never before. The only rule: There are no rules
For MBAs, the business world was, not so long ago, a manicured and paradisal Eden. Success was achieved through a series of necessarily ordered steps: acceptance into business school, an internship, a full-time job, a wealthy retirement. But in a span of just two years, the MBA playing field has morphed into a chaotic jungle. Jobs seem near extinction. The old system of progression is broken. The new king of the jungle is determined by whoever wins the job hunt—and MBAs are stopping at nothing to get to the prize.
In this Darwinian struggle for gainful employment, first-years are competing with unemployed second-years for internships, paid and unpaid. Second-years are doing battle with recent alumni who have been laid off in recent months as well as older alumni whose big salaries make them easy targets for cutbacks. And with desperate MBAs changing careers, going downmarket, or otherwise shifting to Plan B, business school graduates everywhere are now up against a vast army of the uncredentialed jobless.
Brent Simon, 30, just earned his MBA this May from Cornell University's S.C. Johnson Graduate School of Management (Johnson Full-Time MBA Profile). Graduating with a job, he counts himself among the lucky ones. But Simon's no stranger to the tumultuous job search. In December of his first year, he had secured an internship with a real estate company, and by April he found himself with nothing. He landed an internship at the very last minute that led to a full-time job offer. "In the olden days, your primary competition were classmates and kids at other good business schools," Simon says. "Now, we have the 200,000 other people who lost their jobs."
The trickle-down effect of that added competition is to create a sort of no-holds-barred job market for MBA talent. The old pecking order is gone. And success requires new strategies.
Richard Lane, a 54-year-old recently unemployed alum from the Wharton School (Wharton Full-Time MBA Profile) at the University of Pennsylvania, serves as the president emeritus of the Wharton Club of Boston. Though he himself is jobless, he advises job-hungry alumni on where to find employment in Boston, matching them with professionals from his extensive network.
Lane, who describes himself as a "serial entrepreneur," has been out of work since October, when he voluntarily left a tech company where he was interim CEO. He admits that his investment in the leadership of the club is largely due to the fact that he's looking for a job. "I'm the facilitator as well as the client in the scenario," he says. And while Lane's allegiance lies in helping the members of the club, he cannot ignore the pressing needs of his own job search. He says that he'll only pass along jobs that he rejects as possibilities for himself. "What I haven't done is introduce someone to a job that I want," he says.
Like many Wharton grads who find themselves suddenly between jobs, Lane has availed himself of the services offered by Wharton's alumni career services office. Over the past year, the office has seen a 21% increase in the number of appointments conducted with alumni—some 4,000 in all. The advisers offer everything from tips on how to improve interview techniques to rewriting résumés. "I actually about a year ago had hired a consultant to help me, and I paid big bucks. Here, I'm getting it for free with someone at Wharton," Lane says.
What used to be a dormant sector of career services is now scrambling to respond to the new economic order. Laid-off alumni have been returning to their alma maters in search of new employers—or paths that may lead to them. "We used to feel at alumni career services that we were the Maytag repairman: No one was calling," said Mark Brostoff, associate dean and director of the Weston Career Center at Washington University's Olin Business School (Olin Full-Time MBA Profile). "Before October, 10% to 20% of the [alumni adviser's] work was dealing with alumni career services. Now more than 50% of her work is working with alumni who call in."
Business schools across the country have seen an overall influx of alumni interest in career services. Scott Turner, associate director of alumni career services at University of Southern California's Marshall School of Business (Marshall Full-Time MBA Profile), said that alumni are calling him in desperation. "I get two to three calls a day from alums who have gotten laid off from January," says Turner. "It used to be one or two a week."
While alumni are still a huge resource for recent MBA graduates, some new grads believe that the rules of traditional networking have changed in the volatile job market. Cornell's Simon has found the "call and network" strategy useless in the new economy. "The person on the other side of the phone will say, 'I can't find you a job; I'm worried about my job. Not only are we not hiring, we're laying off,'" Simon says. While the new economy has generated a symbiosis between laid-off alumni and their alma maters, it has also put some frantic alumni in direct competition with new graduates.
Mark Iammartino graduated with an executive MBA from the University of Chicago's Booth School of Business (Booth EMBA Profile) in March 2009, a month after being laid off at Ernst & Young. By necessity, his job hunt was more diversified than the one that landed him at Ernst & Young over a decade ago. "I had one company tell me they were interested in my background, probably because they figured out-of-work I-bankers wouldn't consider the jobs since they paid too little," Iammartino says. "But those out-of-work I-bankers were willing to take 50% pay cuts." Iammartino spoke with many firms that saw the down economy as a chance to upgrade talent; many replaced employees with people who had far more experience.
For Iammartino, being able to leverage his network with those of other out-of-work Booth alumni—giving a little to get a lot—is what ultimately made all the difference in his job search. The group met a few times each week in office space in downtown Chicago and formed an informal network. A classmate put Iammartino in touch with a job at a turnaround consulting firm specializing in the middle market, and his job search was over. He will be paid more than he had been at his previous employer.
Second-year students sit just above the lowest rung of the job experience totem pole, and it's no surprise that the bad economy is hitting them particularly hard. In addition to those who face flat-out joblessness, many second-years have no choice but to accept delayed start dates from cash-strapped employers. Both the unemployed and the employment-delayed are increasingly considering alternatives that used to be the jealously guarded realm of first-years: internships.
When he graduates from Northwestern University's Kellogg School of Management (Kellogg Full-Time MBA Profile) in June, Karlo Teran will have fulfilled the two goals he set for himself before coming to Kellogg: landing a job in his hometown of San Diego and bucking the trend of following a typical MBA path in consulting or investment banking. Through diligent networking inside and outside of Kellogg, Teran landed the job of his dreams at a private bank in California.
The only catch: His job starts in September. "For the summer, I don't like to lose time, especially in this hard economy," Teran says. He decided to pursue an internship, and he faced fierce competition with first-year students. Many of the internships he sifted through were unpaid, and he noted that the compensation was extremely low for the internship he ultimately took in the marketing division of a Chicago-area sports agent company. But for the opportunity to add to his network, Teran says he would have worked without pay. "The more people you meet and the more experiences you get, the better," Teran said. "An internship is a free experience."
For second-year students, they may be free experiences, but for first-years who have trouble securing internships, a summer job can mean the difference between a successful launch to a post-MBA career or scrambling for work at graduation. The trickle-down of heavy competition can hit first-years the hardest. John Day, 27, is a first-year MBA candidate at Kellogg going into investment banking. He made it through the cutthroat internship competition and will be working at Citigroup (C) this summer, but Kellogg's career services warned students to be prepared for anything.
"From the beginning, they told us to have a Plan B and Plan C. Pretty soon that morphed into a C and a D, and then they were telling us to talk to our old employers," Day says.
New programs are quickly being invented at business schools to combat this kind of future for first-years. The Career Management Center at the Johnson School started a program this year offering short-term consulting projects with participating companies ranging from three weeks to an entire summer. Of the 100 projects open only to Johnson students, 55% are paid opportunities and 40% are pro bono. Many of the company contacts are Johnson alumni. The projects are open to any current MBA who has not yet found an internship or permanent position—out-of-work alumni need not apply—and so far, the projects have received close to 100 applications.
Karin Ash, the director of the Career Management Center at Johnson, sees the program as an important alternative for those without full-time positions. "Better to stay busy and get one more experience under your belt instead of sitting around moping because you don't have a job," Ash advises.