B-schools across the US, which put out 20% of the 5,00,000 MBAs graduating each year globally, have had it tough this year. Finance majors even from the top schools seem to be the ones who have felt the ‘poor job market’ impact and may continue to feel it till next summer when the 2010 batch graduates. Marketing and technology students meanwhile have been relatively unscathed by the economic downturn in the US. ‘High-salaried Wall Street jobs at big banks such as Bank of America, Goldman Sachs, JP Morgan have almost disappeared’ and the same students who were opting for these jobs are now going in for their next best alternative including general management, consulting and entrepreneurship. As a result, consulting firms such as McKinsey, Boston Consulting Group, Bain and Accenture got to pick from a wider range of students who may have otherwise have opted for investment banking jobs.
Students are undoubtedly ‘hyperventilating’ on MBA campuses in the US, a programme that costs them at the top schools up to $50,000, in addition to the opportunity cost they incur. Most entrants to a US B-school have five to six years experience and usually take a career break to pursue an MBA to help them move up the career ladder or to make a career switch and, therefore, they consciously choose a programme that gives them the tools and network to make that transition. For instance, students interested in technology consulting may choose Carnegie Melon in Pittsburgh that has a strong computer science programme and this technology bent has spilt over to the B-schools. Yale MBA, likewise, has strong finance and non-profit programmes that attract students wanting to make a career in these fields.
For a lot of students, the lure of large investment banks was the reason they went to B-school and they saw these crumble at the same time they were preparing to work in them. For some schools the period starting last September to this February was the ‘darkest months’ though things did improve in March and April closer to graduation in May when most students know ‘what fate had in store for them’. Even at schools like Darden School of Business, ranked amongst the top 30 B-schools in the US this year, of a batch of 330 students that usually graduate each year, 79% had jobs at the time of graduation compared with over 95% last year. News on salaries though was not half as bad. “While the number of jobs being offered at B-schools has dropped, base salaries have stayed the same as previous years even at the investment banks though perks and bonuses of 20% are a thing of the past,” says Peter Rodriguez, associate dean, Darden School of Business. However companies have been choosier and students have had to work harder to prove their value.
How B-schools cope
B-schools have gone into overdrive trying to support their students and even the deans at schools like Yale and Darden and others have gone out on a limb soliciting alumni to step up and hire from their alma mater during this difficult year.
Efforts to prepare students have been stepped up. US B-schools ingrain in students the art and science of the job search process. Working on job search and networking skills is something that starts within second month of joining the MBA programme for most students. Schools such as Yale ask students to dedicate 160 hours during the program in developing their networking and communication skills, resume building, preparing and tackling the interview skills. Two aspects B-schools in the US have mastered are the ‘real life’ experience they provide through the programme and the ‘network of alumni and peers’ that students are always encouraged to leverage. This is also the intent of B-schools in India but US B-schools make it an integral part of the programme.
The banking crisis in the US has made some B-schools examine their core being. Harvard Business School (HBS) professor Rakesh Khurana said, “Business schools have been complicit in creating recent corporate scandals by turning out graduates fixated on shareholder value at the expense of all other stakeholders in society.” Changing that mindset would involve changing the way the curriculum has been taught. Building on the case-based pedagogy that was started by 100-year HBS, schools such as Stanford and Yale have innovated new approaches to curriculum which after the financial crisis has become more relevant. “Instead of having silo-ed courses such as finance, marketing, human resources, law, economics the new Yale method especially during year one when 70-80% of the courses are common has an integrated curriculum. For instance a recent case on how the online DVD rental netflix.com, a supply chain management marvel, has over taken the traditional brick & mortar model that requires a large capital investment espoused by Blockbuster, which has a national presence in the US is not just taught by one but by marketing, finance, operations classes which makes us look at the business impact holistically from different angles,” says Prashant Kumar a second-year management student at Yale School of Management.
This is the final of a 3-part series on campus recruitment