MBA JOB SEARCH BULLISH : The 1987 crash is having little impact as grads find Southland prospects bright.
In the fall of 1987, Rick Wetzel left his engineering job in the depressed oil fields of Tulsa for the University of Southern California business school with visions of investment banking dollars dancing in his head. No sooner had he settled in than the stock market crashed, scuttling his hopes and those of many of his classmates.
“We were all looking at investment banking,” he recalled. “You couldn’t help but look at it with all the glamour and money involved.” But the sight of previous years’ star graduates skulking around the placement office looking for work after the tidal wave of pink slips on Wall Street resulted in some rapid attitude adjustments.
Wetzel and his contemporaries, fortunately, had plenty of time to modify their plans. And 20 months later, as the business graduates of 1989 march off to the corporate world, it’s clear that the effect of the crash on business degree holders has been far more modest than was once feared.
“This year was a very positive job market--definitely a growth year,” said Glen Payne, director of career services at USC’s graduate school of business, in a comment echoed by placement directors from business schools across the country.
Sunny Outlook
The sunny outlook is warming not only high-flying master of business administration graduates at elite institutions but also undergraduate business majors who are typically recruited into accounting and sales functions.
Hiring of business grads by private industry as a whole is up 3.1% this year, according to Patrick Scheetz, director of placement at Michigan State University and author of an annual study of employment trends.
Job prospects are especially good in Southern California. “We’ve seen very, very strong hiring,” declared Randy Williams, director of career placement at the UC Irvine Graduate School of Management. “Orange County is such a high-growth area that we did not feel the crash.”
Robert C. Bruce, director of career planning and placement at the Peter F. Drucker Graduate Management Center in Claremont, agreed that the California job market, which absorbs nearly all the school’s graduates, was “very bullish.”
The overall strength of the economy is clearly the key factor in the upbeat employment picture. But the sense of relief among MBA grads and placement directors also results from the absence of a backlash against highly paid MBAs that many feared was inevitable after the Wall Street bubble burst.
More Interest in MBAs
“I haven’t seen any indication that employers are turning away from MBAs. If anything, there are a wider variety of companies interested in people with those kinds of qualifications,” said Lyman W. Porter, a professor of management at UC Irvine and author of a recent study on business schools. “Business problems are increasingly complex and, thus, small and medium-sized companies, which heretofore did not think they needed that high level of expertise, are now showing more interest in MBAs.”
Even last year, the MBA job market proved mostly immune to the crash, although students and administrators were jittery. This year, “the emotional tone is much better,” observed John Adams, placement coordinator at UCLA’s John E. Anderson Graduate School of Management. “There’s a better match between students’ objectives and the employers’ needs.”
That’s one way of saying that many students have given up their hopes of investment banking, even though hiring in that area has actually been stronger than is generally believed.
“Traditionally, we placed 15% to 18% of our students in investment banking,” said James Bierne, director of career development and placement at the University of Pennsylvania’s Wharton School. “Before the crash, it was up to about 25%, but now it’s back to the normal level. The investment banks are still hiring, although they are very selective and more conservative in their compensation.”
John Hahn, a UCLA MBA graduate who landed a position with the Morgan Stanley investment bank in New York, said the falloff in enthusiasm for investment banking was a boon for those who stayed the course. He acknowledged that the interviewing process was rugged and that the investment banks were very selective, but concluded: “If you’re good, you don’t have anything to worry about.”
For Wetzel, however, Wall Street today is just too unpredictable. “I didn’t take two years off (to get an MBA) just to go back into a field where I’m going to get laid off,” he said, in reference to the difficulties of the oil economy he left behind in Tulsa. He therefore sought a job in consumer product management and found one with Carnation. “I was able to get something that’s fairly recession-proof, and that’s extremely important.”
Consulting Continues Expansion
No single industry has replaced investment banking as the driving force in the MBA job market. Consulting has been very strong, primarily because of the continued expansion of the consulting business that has accompanied the restructuring wave in U.S. industry.
Bierne said consulting firms took nearly 25% of Wharton’s graduates this year, up from 14% in 1988, and recruiters at McKinsey & Co. and Andersen Consulting confirmed that their companies were hiring more people.
In Southern California, the real estate industry also has been a growth sector for MBAs. And several placement directors reported increased interest on the part of smaller companies that have not in the past recruited MBAs. But the traditional MBA focus on financial services, corporate finance within Fortune 500 companies and product management has remained largely intact. The often-predicted renewal of interest in manufacturing and operations management does not appear to have materialized.
The success of undergraduate business students is another indicator that the hiring strength is broad-based. Gerard Quinn, an accounting major at Cal State Fullerton, said he interviewed for five jobs and got three good offers. Quinn described himself as a slightly above average student and said he had the sense that “jobs are very abundant.”
Salaries for business grads have remained fairly stable, with the mean starting salary for MBAs hovering in the $40,000 to $50,000 range, depending on the school. “We’ve basically seen cost-of-living increases from last year,” said Elizabeth Meyers, placement director at Stanford business school. “The industries, salaries and functions that people are choosing are very much the same as last year.”
The healthy job market does not mean that finding the perfect job is simple. Kim Fong, a USC business graduate, said she defined her objectives very early, retained a tight focus during her two years in school and did 15 to 20 interviews before finding the position she wanted in product management.
But others are more relaxed. Mike Burak of UCLA won’t even begin looking for work until he returns from a trip to Asia. “Business school,” he said, “gives you a lot of confidence that the jobs are out there.”
