The ‘Most Beautiful’ Business Schools

The Job Market For MBAs Is About To Take A Hit

Getting ready to graduate soon? Well, don’t take out a loan for that Lexus just yet.

That’s the message from the new Annual Recruiting Trends Report from Michigan State University. The report, which has been produced for 43 years and surveys 6500 employers that recruit on campus, shows that MBA hiring in the United States will decline by 25 percent over the previous year.

The chart below outlines, by percentage the hiring changes expected in sectors ranging from financial to government:

Of course, the report isn’t all gloom-and-doom. It shows that hiring for graduates with Bachelor’s degrees should grow by 7 percent, with a 26 percent increase predicted for candidates with doctorates. Overall, the report calculates a 2 percent increase in overall business hiring.

So why are MBAs trailing in comparison with everyone else? Start with financial services, which is among the largest sectors (and recruiters of MBAs). They have been hemorrhaging jobs in 2013. As a result, MBA hiring in the financial sector is projected to drop by 58 percent. Similarly, government and healthcare hiring of MBAs is estimated to decline 86 percent and 30 percent respectively.

The reason? Money. According to The Harvard Business Review, businesses are planning “to replace MBA hires with Bachelor’s candidates to cut costs.” While the report notes that MBAs from top programs will still command top dollar, it warns that MBAs “with little professional experience may have more difficulty landing a job commensurate with their education.”

Alas, you get what you pay for. Although the pendulum will inevitably swing back from cut-rate to quality, that’s little consolation for MBAs entering the marketplace. Expect a bumpy ride in the coming year.

Sources: The Harvard Business Review,  Michigan State University