In March of 2008, Harvard Business School Dean Jay O. Light pulled aside the head of the school’s career services to deliver an ominous message.
“’I’m nervous, and I’m worried where the market is headed,’” he told Jana Kierstead, managing director of Harvard’s MBA Careers & Professional Development office. “’I see some warning signs. Can you put together a plan on what we would do if the bottom fell out of the market.’”
Six months later, when investment banking giant Lehman Brothers filed for bankruptcy on Sept. 15, Kierstead pulled together an emergency meeting with staff and administrators. “I think it is happening,” she told them. “If you want us to have an impact on the Class of 2009, we need to act now.”
The dean quickly wrote a generous check, the first of two “surge requests” for extra funding, and the plan was put into effect. Within a week, Kierstead led an emergency rescue mission on Wall Street. Ten staffers, including seven Harvard career coaches, flew to New York, rented out a ballroom and began coaching dazed members of the Class of 2008 who had taken jobs at Lehman, Merrill Lynch and other Wall Street firms.
‘WATCHING CNBC AND TRYING TO FIGURE OUT HOW THE WORLD HAD CHANGED.’
“They were like deer in the headlights,” recalls Kierstead. “They were watching CNBC and trying to figure out how the world had changed. We wanted to be there with them to help in anyway we could.”
The bigger problem, of course, would be the job market for the upcoming Class of 2009. “Companies weren’t picking up the phone,” she says. “It went silent.” Job postings dried up. Some companies cancelled their interview schedules. Other employers who had already extended job offers to Harvard MBAs delayed their start dates. “A lot of the companies that stayed hired for one position rather than five, or they interviewed one schedule of students rather than twenty. It was an abominable year.”
Surprisingly perhaps, only one firm, Boston-based consultants The Parthenon Group, rescinded job offers from two Harvard MBAs. A Parthenon Group partner told the B-school newspaper, The Harbus, that it had withdrawn eight of 14 full-time offers across five schools: HBS, Kellogg, Tuck, Wharton, MIT Sloan. Kierstead promptly suspended the firm from coming to campus to meet with or interview Harvard MBAs until this year (2011). It was the first time HBS banned a recruiter from campus since 2001 when the school reportedly suspended Harrah’s Entertainment Inc.
When the dust cleared, 2009 would go down as one of the worst MBA recruiting seasons on record. Even at Harvard, one in every five students in the Class of 2009 graduated without a single job offer in hand. Starting salaries fell for those who got jobs. And it was much worse at other business schools around the world.
FROM THE DARK DAYS OF THE GREAT RECESSION TO A STRONG MBA RECOVERY NOW.
From those dark days at the height of the Great Recession, people began to again debate the value of the MBA and whether the market would ever come back. But things began turning around for the Class of 2010 and, by all accounts, this year things are getting closer to normal for the top of the MBA market.
While U.S. unemployment remains stubbornly high at close to 10%, job prospects for MBAs in the Class of 2011 are looking considerably brighter. At Stanford Graduate School of Business, job postings are up 85% year over year. Boston Consulting Group, one of the largest employers of MBA graduates, plans to up its hiring by 18% this year. And a new survey of MBA employers shows that 64% plan to hire MBAs from the Class of 2011, up four percentage points from a year earlier.
“We are seeing an extremely sharp uptick from virtually every sector that recruits our MBAs,” says Pulin Sanghvi, director of Stanford’s Career Management Center. “Most employers are coming back with sharply higher hiring numbers. There are parts of the economy right now that are really booming, particularly in tech, and that boom is creating even more jobs from the ecosystems around these companies.”
On some level, the strong recovery in the MBA market is a reflection of pent-up demand for managerial talent. “People were being very conservative about staffing during the recession,” says Sanghvi. “Many are now finding that they are understaffed for what they are trying to accomplish, particularly for managerial talent. So that trend is very promising for MBA students across the country.”