The New Recruiters

The New Recruiters
By David Williams
MBA recruitment was once dominated by banks, but the recession has seen that change. The consultancies are surging forward, and general industry is likely to take over from financial services in 2009, as the second biggest source of MBA vacancies.

The QS Top MBA Recruitment and Salary Reports from 2003-2008 tell an obvious tale. Since the collapse of the dotcom boom, consultancy recruitment has been accelerating relentlessly. The number of MBAs hired into the consulting sector has more than doubled since 2003 and will treble if 2009 forecasts are achieved. In contrast even before the financial downturn of fall 2008, vacancies in financial services were slowing. And, if vacancies for 2009 drop by nine per cent as expected, general industry will become the second biggest source of MBA hires, breaking the consultancy-finance grip on MBA aspirations for the first time in the post-dotcom world.

Globalization still drives change

“Globalization is continuing to have an impact on recruitment,” says Dominique D'Arcy, career advisor at Manchester Business School. “Increasingly, organizations operating overseas feel the need to diversify their employee base.”

“Every year, new European subsidiaries of global companies come to IMD that have not been in the MBA market before,” says Katty Ooms Suter, director of MBA admissions and career services at the International Institute for Management Development, Switzerland (IMD), “particularly what we call core industrial business-to-business companies. This is something we haven't seen before.”

What is interesting is that these new entrants to the MBA market are taking time to find their own style. Unlike the consultancies, the banks and the pharmaceuticals, who have settled systems of recruitment, these new players have been developing their own techniques.

Recruitment strategies

“We are finding these industrial, business-to-business corporations are using three different approaches to recruiting MBAs in Europe,” explains Katty Ooms Suter. “When they first come into the market these organizations tend to adopt US-style rotation programs for MBAs. However, these did not really suit the older MBA graduate we have in Europe who usually has had sufficient experience of work to dispense with a graduate-style rotation around the company.

“The companies have therefore moved on to two other approaches. The second technique I see now is for European companies to combine MBA talent recruiting with their own internal talent-development program. The in-coming MBAs take on open positions but, at the same time, become part of the pool of talent from which the organization can draw on in terms of its succession management. The third approach involves bringing MBAs in to do specific short-term projects.

This last approach to MBA recruitment appeals to companies which have quite a settled workforce, a tradition of promoting from within, and a very strong internal network which can be closed to outsiders. If these companies bring MBAs straight into permanent positions, there can be a danger that the new hires will find themselves blocked by the network. Instead, MBAs are given a short-term task which gives them the time and the opportunity to become accepted and to work their way inside.

“Essentially, these organizations are creating internal consulting groups,” continues Suter. “After a couple of years in the consulting group, the new recruit has built up a network within the organization and proven himself, allowing him to move to an upper/middle-management role within the business. For example, both Du Pont and GE have created groups like this.”

This is an approach that is also being seen in Manchester. “We are finding more short term projects rather than full-time offers as organizations appear less willing to take the risk,” says D'Arcy. “It is like a kind of internal consulting, but whether it is a way of getting round having to pay for consultants directly is not something they would admit to us!”

And for Carol Rue, director of personal and career development at Warwick Business School, there are other factors at play. “I think that this isn't just a question of  organizations new to the MBA market suddenly realizing that they have a need for MBAs,” she says. “I think business schools have also got much more professional in terms of developing relationships with employers outside the usual consulting and finance channels. It is not about organizations suddenly waking up to the possibility of employing an MBA, it is much more of a dialogue.”

Consultancy triumphant

General industry is the new kid on the block, but there have also been developments in the world of consultancy which are keeping it on the top spot. The growth in technology and business outsourcing has led to a strong demand for MBAs from corporate consultants such as Siemens Management Consulting and IBM, now the world's largest provider of consultancy services both by revenue and employment numbers. Dell's change of name from Dell Computers signals its intention to build up its business consulting division.

At the same time, according to the QS Top MBA Recruitment and Salary Report 2008,  all the leading firms have returned to aggressive MBA hiring, in particular, the big strategy players such as McKinsey, BCG, Accenture, Bain, Booz Allen, and Roland Berger. On top of this, the professional services, technology and outsourcing firms have been re-staffing their strategy departments – many of which were decimated in the post-dotcom downturn. KPMG, Ernst & Young and Cap Gemini are all actively expanding their business advisory or business consultancy division. It remains to be seen whether hiring forecasts for 2009 will be realized, given the current concerns for the state of the global economy. At this point however, the outlook for consultancy and general manufacturing remains very positive.

Top 10 Recruiters by sector 2008

Source: QS Top MBA Recruitment and Salary Report 2008

Consultancy
Accenture, A.T. Kearney, Bain & Co, BCG, Booz Allen Hamilton, Deloitte Consulting, Ernst &
Young Business Consultancy, IBM Consulting, McKinsey & Co, ZS Associates.

Financial Services
Bank of America, Barclays, Citibank, Deutsche Bank, KPMG, Goldman Sachs, JP Morgan,
Merrill Lynch, Morgan Stanley, OCBC Bank (GE Commercial Finance, Ernst & Young, UBS
replaced from 2007).'

Technology
Amazon, Avaya Communications, BT, Dell, Google, IBM, Intel, Microsoft, SAP, Vodafone.

General Industry
BP, Eastman Chemical, Exxon Mobil, General Electric, General Motors, Hilti, Ingersoll Rand,
Johnson & Johnson, Procter & Gamble, Whirlpool

Pharmaceuticals and Healthcare
Astra Zeneca, Cigna Healthcare, Cytyc Corporation, Eli Lilly, Genentech, Glaxo Smithkline,
Johnson & Johnson, Novartis, Pfizer, Schering Plough.

Graph referred to in text: Figure 4: Index of MBA recruitment 1990-2009, page 9, from QS Top MBA Recruitment and Salary Report 2008
Graph for additional illustration: Figure 5: Percentage changes in MBA opportunities by sector worldwide, page 11,

Index of MBA Recruitment 1990-2009

Source: QS TopMBA.com International Recruiter Survey 2008
Index of MBA Recruitment 1990-2009