North American MBA recruitment downturn a blip, say recruiters

New recruitment and salary report suggests 2009 downturn could be a blip in the USA

 
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, has revealed that the US downturn is likely to bounce back strongly in 2010, though only in certain sectors. 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.

In the USA, MBAs most struggling to find work have been those with little or no work experience, those looking for a major career change or international students who cannot find a corporate sponsor. According to Boston University Associate Dean says Hayden Estrada, the school had “feared only 50% of graduates would be in employment three months after graduation this year, but the reality is that over 85% have found employment.”

In the USA, the largest MBA employment market, recruitment into financial services is expected to show a strong recovery in 2010 and consulting should remain buoyant, according to the survey. However, demand in industry and technology is still looking vulnerable as companies take time to shake off the effects of the contraction in global trade.

Dan Beaudry, Employer Relations Manager for QS TopMBA and Global-Workplace in the USA, reports that, “demand for MBAs in the US was badly affected in 2009, with many MBA employers re-assessing their MBA hiring needs downwards.” He adds “The outlook for 2010 is better and we do not expect many more drastic cuts. If consumer demand picks up and confidence returns, employers might re-assess their plans upwards during the spring. But MBAs graduating in North America in summer 2010 need to be prepared for a long and challenging job search.”

The outlook for improved MBA hiring into financial services is good. Most banks have repaid or are repaying government loans enabling them to resume competitive hiring and trading practices. Some hiring managers are expecting to see more recruiting into M&A departments, anticipating a resumption of takeovers by corporate America.

Conversely, industrial and technology employers remain cautious about MBA hiring in 2010. Cost savings are still the order of the day. As a result, many industrial companies are looking outside the top-tier schools in order to find the MBAs who match their skill requirements at a competitive salary. Mesha Mott of Mead Westvaco USA observes: “Depending upon the universities and the skills sets required, salary requirements may be misaligned with what the candidates actually bring to the table.”

For many candidates, entry to a top-tier US business school channels them into a banking or consulting career post-MBA in order to pay back the fees, as well as natural peer-pressure to get the ‘best job’. A growing number of candidates are actively looking for specialist smaller schools which can better match their career aspirations. This requires a more thorough self-assessment prior to the MBA, a thorough school search and a reduced reliance on traditional rankings.

International students
It is still a challenge for foreign students to obtain H1 visas to stay and work in the US, though recent evidence confirms that as the labour market tightens, recruiters are finding ways to hire the people they really want. Wharton suggests that over 60% of their international students accepted full-time positions within the US. At UC Irvine, Tom Kozicki reports that 90% of their international students obtained work permits to stay and work in southern California, but a handful of students were unable to stay beyond their F1 visa which allows a year of work experience in the USA after an MBA.

Dan Beaudry of QS Global-Workplace provides further insight “H-1B visas are at a premium in the US.  Not only are there less jobs overall, in 2009, but new TARP regulations are making it more of a challenge for some companies to hire H-1B employees.  Unfortunately, a lot of these companies have been traditional large recruiters of MBAs.”

Salaries
Salaries in the US are consistently slightly higher than those in Canada. Consulting traditionally offers the highest salaries in the region and averages $97,000 in 2009. However, in the USA this year, it is the government sector which reports the highest average salaries at $100,500. Telecoms reports an average of $95,000, Pharmaceuticals are reporting an average of $93,000. Financial services and energy are both reporting average salaries of $91,000.

Salary stagnation was a major concern for candidates this year as the gap between supply and demand widened. Recruiters have the bargaining power to determine how many jobs they will post and at what level they will set MBA starting salaries. However, employers surveyed stated that they planned to maintain salaries at 2008 levels.