Western Europe: banking suffers, other industries stay buoyant for MBAs

Financial sector recruitment in Western Europe affects placement figures, other sectors remain hopeful
 

According to the QS TopMBA.com Salary and Recruitment Trends 2009 Report, the world’s most exhaustive research on the opinions of the world’s leading MBA recruiters, industry sectors outside financial services are confident about 2010, in recruiting terms. The report, which canvassed the opinions of 743 MBA-recruiting companies – including Dell, Goldman Sachs, Procter & Gamble and Bank of America - from 34 countries allows an international breakdown of recruitment and salary trends both in international and regional terms.
 

MBA hiring in Europe has unquestionably been affected by the recession. William Davila of IE Business School, Spain, says, “weakness in demand in financial services is affecting MBA placement figures. But non-financial recruiting is strong and many companies are taking advantage of the banking cutbacks to hire top talent.” Phillipa Hain of London Business School, UK, agrees that “MBAs have to be more flexible and look beyond finance. Our Career Services team is playing a crucial role in re-directing MBAs towards other career opportunities. Coca Cola, Rolls Royce and the Clinton Foundation are amongst some of the companies attending our industry career fair for MBAs.”
 

The European market has been helped by ongoing strong demand in the consultancy sector. William Platt, a partner in charge of MBA recruiting at Boston Consulting Group, an international consultancy, observes “2009 will actually be a strong year for us and we have hired 50% more MBAs than in 2008 in London and have increased MBA hiring globally. We are looking to hire from more UK schools as they attract better and better people from around the world.”
 

2009 has been a dreadful year for MBA hiring within financial services. Nevertheless, the financial centres of London and Frankfurt are recovering quickly as bank profits begin to boom once again. Many European banks have strengthened their capital/asset ratios and are now highly liquid and looking for talented traders to make good use of all the cheap government money available in the system.    
 

UK
In Western Europe, the UK remains a strong employment market for MBAs, who are particularly advantaged by the Tier 1 (general) programme which replaced the previous Highly Skilled Migrant Programme in summer 2008. This is a visa regime that is favourable to MBAs of almost any nationality. At the current exchange rate (October 2009), the UK is now paying the highest salaries for MBAs worldwide.
 

Germany
The German economy is usually the engine of MBA demand in Western Europe. Strong demand for their goods in Asia, in particular, has fuelled a demand for Asian MBAs to join German companies. Likewise, many service companies are desperate to recruit German MBAs to serve their successful German clients. 2009 has not been a great year, but employers in Germany are amongst the most optimistic of a speedy recovery.
 

France
There is little evidence of resurgent demand for MBAs in France, despite President Sarkozy’s promise to revitalise the industrial sector. Tamsin O’Bryen of Sodexo reflects the continuing scepticism of some French employers towards MBAs when she says “While the level of learning of MBAs is good and gives a strong insight into the organisation, I think MBA schools need to be more careful in managing their students expectations. A lot believe that the certificate makes them a natural leader but that is not the case all of the time.  An MBA doesn't act like a magic wand!”
 

Spain and Italy
Spain and Italy are also sluggish but have growing numbers of financial companies regularly recruiting MBAs, as well as a growing consulting industry and remain somewhat immune to the credit crunch.  However, their export industries are suffering from the strong Euro.
 

Salaries
Western European salaries have been relatively stable since the dot.com crash. In reality, an MBA graduate today will face similar prospects on either side of the Atlantic. Salary levels in financial services and consulting are very similar in both regions as are technology salaries and those in general industry. The recent strength of the US$ means that average European salaries reported in US$ have fallen this year to $87,000, but in Euro terms they have remained stable.
 

There is a great variation in salaries across the region. United Kingdom, France and Switzerland are paying the highest MBA salaries, all with averages of $100,000 or more, well ahead of the regional average. MBA salaries in Germany and Netherlands have dropped back below the average for the region, though this may be explained by the fact that fewer (and a higher proportion of smaller) companies in these countries have responded to the survey this year.
 

Because of the exchange rate change, MBA salaries by sector, in US$ terms, have dropped this year. Consulting offers are averaging $92,000. Financial Services offers are averaging $89,000 (these figures exclude bonuses). The highest salaries have been offered by IT/Computer services companies averaging $95,000.