A new survey released by GMAC earlier this month reports that new MBA grads are growing more confident about the economy, despite a drop in the percentage of grads who have jobs compared to last year.
According to the latest GMAC Graduate Management Education Graduate Survey, the percentage of full-time two-year MBA program grads who had an offer of employment prior to finishing school dropped to 40% this year, down from 50% in 2009. The numbers are even worse for part-time MBAs: 22% of part-time grads had a job offer before graduation, down from 38% in 2009.
Although these numbers look pretty grim, about one-third of grads who said they felt the global economy is stable or strong, up from just 9% a year ago. So, what gives? How could optimism bounce back while the job picture actually gets worse by some measures?
GMAC’s news release doesn’t go so far as to answer this question, although it may simply be a matter of “bad news fatigue,” and our tendency to doubt that things can stay this bad for that long. Not many MBA grads (other than perhaps a handful of older part-time MBAs) are old enough to remember the last time the U.S. or global economy last went through an extended rough patch, in the late 1970s. So, for most of these grads, two years into a recession, one can’t help but ask, “This thing has to be over soon, doesn’t it?”
Or, do these grads know something we don’t? Maybe they’ve noticed that more companies are returning to campuses to interact with students, even if the job offers aren’t yet flowing more yet. GMAC echoed this idea in its announcement, mentioning that the increased optimism among graduates mirrors the trend highlighted in the GMAC Corporate Recruiters Survey, which found that employers are finally shifting their attention back to expanding their businesses. If that’s the case, then maybe this really is the first sign of a light at the end of the long, dark jobs tunnel.
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Recently the Yale Daily News featured an article titled “SOM Alumni Network Matures,” which discusses how Yale SOM students today benefit from the wide variety of Yale alumni across industries. This is not insignificant, since the school has only been around since 1976.
What’s most impressive in the article is the fact that the school’s own administration — all the way up to Dean Sharon Oster — has make a point of making personal appeals to the school’s alumni and supporters, in the name of helping students find jobs in a tough economy.
According to the Yale Daily News:
In an e-mail to all SOM alumni, Oster called on the school’s graduates to step up and help current students, recent graduates and even other alumni seeking jobs and internships.
“Although the economy seems to be showing signs of improvement, most of my faculty colleagues agree that we’re not out of the woods yet,” Oster wrote in the e-mail. “The strength of the SOM community is most visible in times of adversity, and so I am writing to you now to tap into some of that strength.”
Within a few hours, Oster had received hundreds of responses.
This kind of commitment on the part of the school is fantastic. After all, as important as a student’s two years in the classroom are, at least as important are the professional opportunities that an MBA opens up for that student. Some schools were a little slow to take action as the economy started to sink in 2008, but it’s great to see that this is changing.
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Building on our recent post about the MBA job market appearing to thaw, GMAC just released the results of a survey that shows that three-quarters of 2009 full-time MBA grads had jobs by September. Of part-time MBA graduates, 96 per cent of them had jobs by then.
While those statistics are pretty encouraging, the salary numbers present a slightly less rosy picture. Many MBA grads found that the starting salaries they were offered were lower than those offered to their counterparts from previous years. The median starting salary for all survey participants who finished school last year was $79,271, down slightly from the Class of 2008’s $80,000 median starting salary.
Back to some more good news: The survey reports that the Class of 2009 also reasonably satisfied with their jobs. Fifty-eight per cent of grads said they were in the kind of position they had hoped to find, 48 per cent indicated they were very or extremely satisfied with the direction their career was taking, and 47 per cent said they felt their employer placed particular value on their graduate management degree. Meanwhile, 78 per cent of respondents who graduated in 2009 reported that their degree was essential to landing their job.
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A recent Reuters article described the job outlook for a bunch of MIT Sloan students as they returned from their annual “Tech Treck” job trips, in which they visit employers all over the United States. It sounds as though companies — especially the more tech-oriented ones that Sloan students visit — could finally start hiring again this year.
According to the article:
And what they found gave them reason to hope; tech outfits are finally seeing demand pick up, energy companies are pushing hard to develop renewable fuels and together the two sectors could lead the way out of a job market morass.
Employment growth in the United States has famously been powered by small- and medium-sized businesses. So far in the fragile economic recovery many small firms have been reluctant or unable to take on new staff.
Normally MIT Sloan graduates find themselves choosing among multiple six-figure job offers, but last year even healthy and growing companies such as Google significantly cut back on the number of Sloan grads that it hired. Now, as companies expect demand to warm up and some spot opportunities that they will need managerial talent to go after, grads at Sloan and other top business schools can expect the job offers to start flowing again, at least more than they did last year.
For students in the Class of 2010, many of whom still hope to land jobs before they graduate this spring, the news that some companies are ready to hire again is obviously a very welcome sign. It’s even better news for the Class of 2011, though — assuming they can find some sort of meaningful internship work this coming summer, they still have at least a year’s more time for the economy to warm up again before they they need to find full-time work. And, today’s applicants (the Class of 2012) can expect the market to be even better by the time they’re looking for work, although in today’s market anything can happen.
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A recent article on Forbes.com, describes how jobless grads are increasingly applying to graduate school as a backup option in the face of a bad job market, even though some of their possible post-school job prospects are also disappearing.
Law schools and MBA programs aren’t the only ones that have seen an influx of applicants. Even schools of journalism have seen record numbers of applications this past year, even though this is a notoriously industry for jobs (and one that keeps getting tougher). So what gives?
The answer is that these young professionals are biding their time. While their job prospects may not be especially bright when they graduate, these young grads would rather take their chances in the job market in two or three years, rather than now. Even if the job market isn’t significantly better in 2012, then at least these folks will come out of school armed with additional skills, certifications, and contacts, making their reentry into the job market a little easier (at least in theory). No matter what the job market looks like then, getting into grad school will give these young people the luxury of being able to hide out on campus and not quite yet have to face the real world. Sometimes, especially when the economy is rough, this can be grad school’s biggest appeal.
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In today’s CNBC town hall event, Warren Buffet made an impressive offer to the hundreds of Columbia Business School students who gathered to hear him and Bill Gates speak:
Right now, I would pay a hundred-thousand dollars for 10 percent of the future earnings of any of you. So, if anyone wants to see me after this is over. If that’s true, you’re a million dollar asset right now, right? If ten percent of you is worth a hundred-thousand? You could improve on that, many of you, and I certainly could have when I got out, just in terms of learning communication skills.
It’s not something that’s taught, I actually went to a Dale Carnegie course later on in terms of public speaking. But if you improve your value 50 percent by having better communication skills, it’s another 500-thousand dollars in terms of capital value. See me after the class and I’ll pay you 150-thousand.
While we wonder what Buffett would actually do if those hundreds of students all lined up with their hands out, waiting to collect $100,000 each, Buffett’s comments highlight the impressive earnings potential of anyone who graduates from a top-ranked business school. These days, with the job market still soft and Wall Street still on shaky footing (at least jobs-wise), it’s good to remember than earning an MBA is still one of the surest paths to maximizing your lifetime earnings!
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Last week BusinessWeek ran an article titled “MBAs Confront a Savage Job Market,” which painted a pretty rough picture for graduates at many top business schools. At some top schools, as many as 20% of grads were still unemployed three months after graduation, a statistic that economists haven’t seen for decades.
Fortunately, the world of top-30 business schools is not universally gloomy. Some business schools’ career offices have been able to direct their students into more stable industries, such as government, health care, energy, and the non-profit sector. While working for the government may not quite be as appealing as being a six-figure-making banker, many grads have opened their eyes and realized that these sectors are where the jobs are right now, and are taking these jobs when they can.
In other cases, hiring did happen, although it happened later than it normally does. The Kellogg School of Management, for instance, reported that 85% of of its grads received at least one offer, although many students received offers late in the spring — months later than they normally would. Other top MBA programs have also been able to weather the storm pretty well. BusinessWeek ranked the schools in terms of how well they’ve held up job-wise in the recession, with Yale, Washington University, HBS, Stanford, and MIT Sloan coming out on top. At Yale, for example, only 8% of grads were without any job offers three months after graduation, just two percentage points higher than a year ago. While not all of these placed grads landed the exact jobs they envisioned when they first applied to business school, you can be sure that they’re glad to have jobs at all.
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