MBAs see bleak job landscape in the recession

Eve Tahmincioglu • Profile • E-mail

Crashing on a friend’s couch this summer wasn’t what Matthew Zumbach expected.

When Zumbach entered Northwestern University in 2007, he had visions of working for a hedge fund some day.

But Zumbach, 28, who gets his MBA in June, got hit with a harsh economic reality. “The pay scales just aren’t there and even the jobs aren’t there, especially in the financial services sector,” he laments.

H. Victoria Myers, 31, who graduated with an MBA earlier this month, thought getting the degree would open more doors to higher level management jobs and more money. Alas, she couldn’t even match the position or salary she left behind.

“There’s not a lot out there for the level I was looking for,” explains Myers, who got a fast track MBA in one year from Oklahoma Christian University.

No matter which business school they attend, many MBA graduates are feeling the economic squeeze.

“Getting an MBA was never a guarantee for getting a certain job, it simply gave you a better probability for success,” says Dave Wilson, president and CEO, Graduate Management Admission Council, a nonprofit that owns and operates the entrance exam for MBA programs. “In many ways that probability of success was up to the economy.”

Unfortunately, the economy stinks right now, so newly minted MBAs find themselves in the same boat as many of their non-MBA counterparts. They're sending tons of resumes that go unanswered and rethinking their career goals and aspirations because the money and job opportunities just aren’t what they were even last year.

Steve Gellert, who will be graduating with an MBA from Cornell University’s Johnson School, found campus recruiting to be a bust. Many recruiters weren’t looking for full time hires, so he had to turn to sites like Monster.com and Hotjobs.com.

“I’ve applied to 15 or so jobs and haven’t heard back,” he says.

After climbing since 2003, the portion of MBA graduates with a job offer this year declined to 57 percent, down from 64 percent the previous year, according to the just-released annual GMAC Global Management Education Graduate Survey. The number of total job offers per graduate also decreased to 1.8 this year, from 2.3 in 2008. And the bump in salary many MBAs enjoy after graduation was not as pervasive this year with only 56 percent saying they expect an increase this year, down from 59 percent in the year-ago period.

Even the top business schools are feeling the pinch.

“The job market is challenging,” says Jana Kierstead, managing director of MBA Career Services, Harvard Business School.

About 80 percent of Harvard MBAs graduating this year have at least one offer, compared to 92 percent last year.

The economy, she says, “has really encouraged students to do more self reflection and has very much reality tested their risk tolerance.”

Dean Roger Jenkins of the Farmer School of Business at Miami University describes the job market for MBA grads right now as “just awful.”

“If they had known these would be the opportunities when they started their MBA they probably wouldn’t have come back to do the MBA," he said.

But the worsening economic picture hasn’t kept individuals from pursing the business degree.

The number of Graduate Management Admission Test exams given in the first four months of this year was 51,421, up from 50,923 in the same period last year.

When opportunities "dry up" in economic downturns, says Jose Ferreira, CEO of Knewton, an online graduate school prep company, "the need to differentiate from peers or switch career fields often prompts a return to school.”

For some, getting an MBA seemed like a great idea as recently as just few months ago.

“We started out the year really strong with jobs offers for students and recruiters signing up to come to campus,” says Joyce Rothenberg, director of the Career Management Center at the Vanderbilt Owen Graduate School of Management. “But as the year went out we had recruiters that canceled and fewer job offers.”

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