In North America, MBA recruiters are back in force. At UCLA this year, nearly 99% of MBA graduates report job offers, with an average starting salary package of $113K. Around 98% of first year students at the school sought and secured summer internships, with employers from consulting, investment banking, entertainment and high-tech industries. Indeed, the last time there was this much optimism was during the IT/Tech boom. So is this recruiting boom any different from the last? Where are MBA graduates setting their career sights in 2007? And are the recruiters here to stay?
In the last few years, MBA recruitment has been on a slow burn. "Employment of MBAs is an expensive proposition for corporations," says Richard E. Sorensen, chair of the board at AACSB International. "When the economy slows, MBA recruitment is an area where companies cut back. However, here in the United States, the number of recruiters on campus over the past two to three years has been increasing."
This year, however, the signs are that the market has finally ignited. Ask business schools in the US and Canada about the prospects for MBA recruitment and the response is overwhelmingly positive. Almost all schools report increased recruiter activity on and off campus.
"There has been a significant increase in recruiting activity at Fuqua this year," says Erin Gasch, Associate Director of Marketing and Employer Services at Fuqua School of Business, Duke University, North Carolina. "Compared to last year at this time the total number of companies recruiting on our campus is up 28 per cent, the number of company presentations is up 7 per cent, the number of second-year interviews for full-time positions is up 13 per cent, and the number of first-year interviews for internships is up 20 per cent."
Many other US schools are reporting an up tick in the quality and quantity of MBA job prospects, as well as base compensation and bonuses.
It is the same story in Canada. "We have definitely noticed an increase in activity from all sectors. More recruiters are looking for MBAs and recruiters have more roles to fill," explains Karen Theriault, Director of the Corporate Connections Centre at the Rotman School of Management, University of Toronto. "Rotman students have increasing confidence that not only will they get a job, but they will get the job they want. Graduate hiring to date is up 10 per cent over last year."
After several years where IT firms were the fashionable place to work, and then a recruitment lull, traditional MBA career destinations are reasserting their popularity. "Accounting firms are back in full force, as are some of the consulting and financial service firms," says Darby Scism, Director of the F. David Fowler Graduate Career Center, at The George Washington University School of Business in Washington DC.
Aside from the more traditional destinations there are some interesting career trends developing. “Social entrepreneurship is a growth area. We are seeing significant growth in student interest in the public sector and non-profit space," observes Peter Giulioni, Executive Director of the MBA Career Resource Center at USC Marshall, Los Angeles. "It is a nod to the sense of social responsibility that is a very real part of how these students view their post-graduate careers." At Columbia Business School, a school noted for its strength in finance, the social entrepreneurship club has over 150 members.
This is probably a generational phenomenon. There is much research to suggest that the Millennials, who are now reaching the age to apply to business schools, are significantly more socially conscious than their immediate generational cohorts (GenX/GenY). According to TargetX this generation has a greater sense of destiny; they want to be part of something bigger and more meaningful than themselves. They have already experienced the power of collective action and are inspired by doing rather than talking. In terms of how this has altered their behaviour, we are seeing very high rates of volunteerism, raised interest in social entrepreneurship, greater desire to leave a legacy, and focus on money as a vehicle rather than an end in itself.
Schools are starting to respond. Queen’s School of Business for example, has established a Centre for Corporate Social Responsibility. “Thinking about business as a transformative force for social change is a critical part of our mission at NYU Stern,” insists Thomas Cooley, Dean at the New York University Stern School of Business. “Through programs like our student-run social venture fund and our Stern Consulting Corps, we provide our students with innovative outlets in which they use their business skills to make a real and lasting difference in the New York City community.”
Having attracted students over the past couple years, such programs are also now attracting recruiters in increasing numbers. "Our New York City location continues to be an advantage for our students, particularly in this healthy job market in which companies are going head to head for the very best MBA talent," remarks Pam Mittman, Assistant Dean of Career Services and students activities at NYU Stern. "This translates into constant access to employers, both on and off-campus, and more individualized access to company decision makers. Due to the proven talent of our candidate pool and close proximity, the investment banks and consulting firms have been to campus multiple times. We're also receiving more job opportunities from companies in industries such as luxury and retail, and media and entertainment."
Mary Weil at The Richard Ivey School of Business at the University of Western Ontario suggests that there are also broader career trends in play. "There are new trends in how MBA students are choosing their post-graduate organisations," she says. "Students have increased the sophistication of their job search to take into account corporate culture, corporate social responsibility and capability for an organisation to offer career development and upward mobility. Ivey students know it's not just about the first job after graduation, but about a long-term career plan."
Healthcare is also attracting increasing MBA interest. "Healthcare is a growing sector at Rotman," says Theriault. "We launched a Health Sector Management major in the Rotman MBA program last year. Recruiters in this sector include Johnson & Johnson, Pfizer, government ministries and hospitals." Fuqua's Health Sector Management program is also proving popular, confirming student interest in the healthcare sector, including pharmaceutical and medical device companies.
"Another new trend has been an influx of international companies or international divisions of domestic companies who are recruiting here for MBA talent," says Gasch at Fuqua. "Companies include Infosys Technologies, Intel China, Shinsei Bank and the Asian offices of major US investment banks and consulting firms.
On the tech side the news, although mixed, suggests the beginning of a recovery. "IT and Telecommunication firms are making a comeback with 8 per cent of the 2005 graduates securing positions," says Weil at Ivey. Fuqua also reports an increased presence on campus from technology firms like Apple and Microsoft.
As everyone who takes an interest in MBA recruitment knows, events can quickly take a turn for the worse. The dot com boom and bust is a salutary reminder. This time around, however, the upturn in recruiter interest appears less fragile.
"This seems to be different than the dotcom boom of the mid to late 1990s, because it seems to be industry-neutral," says Giulioni. "The MBA job growth seems to be widespread and a bit less frenzied than in the 1990s." It is a sentiment echoed at other schools. "There is not the frenzy from recruiters as there was during the tech boom," states Theriault. "Recruiters are not afraid that students will be leaving to take up positions with start-ups".
The improving recruitment picture in North America is feeding through to applications, and some interesting trends are emerging. While many schools report increased applications, the breakdown shows that Asia and Africa are two regions developing as strong markets for potential MBA applicants.
With the recruiters back, the decision to take time out and spend large sums of money on an MBA is more easily vindicated. "This has been a fantastic year for full-time consulting recruiting, with all the top firms and many niche firms actively recruiting on campus and in many cases making multiple offers," says Jill Darroch, a Rotman 2006 MBA graduate, who accepted a full-time position as a consultant with McKinsey & Company.
Peter Giulioni, at UCS Marshall, backs up this sentiment: "Our students are acutely aware that we are in the midst of a period of high demand for MBA graduates. The best prepared and focused of our students often receive multiple offers and have their pick of function, industry and geography. So far this school year, the average reported combined first year base compensation and signing bonus for 2007 full-time MBA graduates is $113-115k, almost a 10% increase over last year..."
Happily, for those of you reading this in hopes of attending an MBA program in the near future, you are the ones who stand to be the clearest beneficiaries of this latest upswing in MBA recruitment.