Sunday, August 19, 2001
MBA no longer a job guarantee
New graduates struggle to find work
By John Eckberg
The Cincinnati Enquirer
This year's MBA grads can yearn for a silver BMW, a black Armani wardrobe, a sweet hiring bonus and bottomless expense account. But when they stop dreaming, they're lucky to find a job when the cap and gown go back on the hanger.
Recent graduates with a master of business administration face the most uncertain job outlook in recent years as companies have delayed job offers, instituted hiring freezes and might not even show up at this fall's career fairs.
A buddy of mine is an MBA grad from Columbia University, where I did my undergraduate work, and he has had a real difficult time finding work, said Vijay Sud, 32, a 2001 MBA graduate from the University of Cincinnati who will be starting at Deloitte Consulting in downtown Cincinnati next month.
Two forces are at play: a stagnant economy that's forced companies to curtail hiring plans, and a graduate-level business degree that's lost some of its shine.
It is a pretty tough job market for graduating students, said Bill Tracewell, assistant director of career services for the graduate programs office at the College of Business at UC. I spoke with a friend at Harvard's MBA career services, and he said that in 19 years in the field, it's the worst year he has ever seen. Companies are revoking offers like crazy and it has never happened so quickly.
An MBA used to confer such status that companies were aggressive about offering jobs. Now, it's almost a prerequisite for a management position, Mr. Sud said.
Quite a few people who graduated with me are still looking for jobs. I'm not sure if the allure of an MBA has faded, but it sure has changed.
Meegan Addy, a 2001 graduate of UC's MBA program, knows all too well that the degree has lost some of its cachet.
She had a job nailed down at Accenture last fall, but when the time came to go to work in June, she learned that her start date was going to be delayed until April 2002.
It's a pretty grim job climate, she said. It really is. With big firms phasing back and small firms not hiring at all, even the most talented kids don't have a lot of options.
It's gotten a lot worse in the past six months, she said. The people who graduate next June will have a tough time unless the market turns.
The company sweetened the pot for Ms. Addy with an additional signing bonus. Though she found temporary work to hold her over until April 2002, she still wonders how the economy will affect her career.
An Accenture spokesperson based in Chicago said the company would make some job offers to summer MBA interns but those offers were not expected until the fall.
Many delayed start-dates were the result of the firm trying to stagger the arrival of new hires. The stipend that accompanies a deferred start date will range between $10,000 and $18,000, the spokesperson said.
But cuts have gone far beyond delayed starting times at Accenture, the former consulting arm of Andersen. Andersen is a professional services group with offices in downtown Cincinnati.
Accenture chief financial officer Harry You said during a conference call with analysts on Friday that 1,500 jobs will be trimmed from the payroll, cuts that come in addition to 1,400 layoffs announced in June.
Some believe the Midwest could duck the worst of any economic trauma. Pushed-back start dates are happening, but not in my region, said Steve McKinley, director of recruiting midwest for Andersen.
Becky Snowhite, manager of experienced-hire recruiting for Andersen, said the firm has slowed its experienced-hire efforts for consulting candidates. In other areas, like tax accounting, the firm is actively seeking candidates, she said.
Bob Archambeau, recruiting director for Deloitte & Touche, an international accounting and consulting firm with offices downtown, said the hiring rate of MBA grads has generally mirrored the economic downturn.
With the economy slowing slightly, we're adjusting how many new hires we're bringing on, but we are still looking for the best of the best, Mr. Archambeau said.
Deloitte & Touche has not canceled any appearances at community job fairs and has not withdrawn any job offers. In any business, you have to make sure you budgeted the right amount of people to do the work, he said.
KMK Consulting Co., a wholly owned subsidiary of the Keating Muething & Klekamp law firm, does not look for staff at college job fairs, said James J. McGraw, Jr., managing director of the firm with a staff of 31 full- and part-time consultants.
The firm searches on a one-to-one basis to fill employment needs.
We're in good shape, although the economy is affecting a number of clients, Mr. McGraw said.
Getting an edge
Because of the weak economy, MBA graduates are indeed having to search harder for jobs, said Judy Barille, MBA director at Miami University in Oxford, and that trend will continue through 2002. During this period of weakness, people who interview well have the edge, she said.
When the economy is good, there is leniency for a candidate who may not interview all that well. Also, students may not want to say yes to the first company until they can compare offers, she said.
In this economy, students are inclined to jump on the first offer.
About 30-50 students graduate from Miami annually with an MBA degree.
Northern Kentucky's MBA program is designed for working adults with about 200 of the students already employed and the remaining 20 full-time students.
I've noticed a trend that if the economy tanks, more students go to school and the undergraduates entering the program express trouble finding employment, said Tom Cate, professor of economics and director of the MBA program.
Last year, when one student told a class that he had been laid off, another student responded that his company was hiring. The laid-off student had a job within the week, Mr. Cate said.
Because most students already have a job, Mr. Cate said that there have been few reports of new NKU graduates having difficulty finding work.
Glimmers of hope
Indeed, the MBA gloom and doom may be exaggerated, said Phil Gardner, director of the Collegiate Employment Research Institute at Michigan State University, which annually surveys 300 to 400 companies for their hiring plans.
He said that the job picture for MBA graduates is not really all that grim. While the labor market is stalled, some companies are still hiring, and for the right student with the right skills, the market is fairly robust.
Accounting seems to be strong, he said. So is finance, depending upon where the applicant looks. Some consulting firms have slowed down, and marketing, too, is a little soft.
A survey next month should give the institute a better snapshot of the MBA job picture in 2001-2002, he said.
Still, a Web site dedicated to MBA graduates offers an inkling of the tight job market. The MBA Employment Connection Association, based in Winchester, Va., lists 1,750 people with MBA degrees but only 41 MBA job openings.
The slowdown in hiring MBAs is not limited to consulting and accounting companies.
Ms. Addy is calling companies to see if they are interested in participating in a job fair this fall at UC.
So far, she said, about half the companies who came to the career fair in the past have decided not to send representatives this fall.
Big companies like P&G still have needs, but those hiring needs have been scaled back, she said. Ten companies that had a presence on campus in the past have not decided if they will participate this fall, she said.
Despite the apparent flagging interest by some employers in MBAs, many students signed up for a new graduate-level business development class under way this fall at the College of Mount St. Joseph.
The Delhi Township college is offering 23 students a chance for a master of science degree in organizational leadership. Though the college did not advertise the class, it filled up quickly.
Lonnie Supnick, director of the program and professor of business administration, said he was not surprised by the interest. People I'm dealing with feel comfortable with their career choice and their position within their organizations, he said.
What they feel uncomfortable about is that they need more skills. Many looked at MBA programs and said that's not what I want. What some MBA programs have become is a credential for undergraduates who had little business experience, and that changed the nature of those programs.
James D. Brodzinski, associate dean of graduate programs in the Williams College of Business at Xavier University, said most of the 1,000 students enrolled in the Xavier MBA program already have jobs and are pursuing their degree under the college's executive program.
He, too, is skeptical about hard times for MBA grads. I don't get a sense that there's a problem, he said.
"Companies are afraid'
But out on the front line of the job quest, Mr. Sud believes there is some triage going on and plenty of casualties.
A lot has to do with the economy, he said. P&G is laying off people. Consumer confidence is way low. It's a recessionary kind of period and companies are afraid it is going to be prolonged.
He regularly talks to a friend who graduated from the Kellogg Graduate School of Management at Northwestern University.
That's a top five school and he didn't find a job until just before he graduated this spring, Mr. Sud said. It's a real difficult time right now, and not just here in Cincinnati.
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