It’s well known that Stanford Business School graduates are among the highest paid MBA’s, but they may also be some of the happiest – at least when it comes to job fulfillment.
Stanford MBAs graduating in 2012 waltzed out of school and into career opportunities with an average starting salary, including bonuses, of $140,459 – just $2,042 shy of the average salary scored by the top-paid Harvard MBAs. But recent trends indicate that six-figure salaries may have lost some of their sheen – MBAs are now in pursuit of a mushier and far more fickle goal – fulfillment.
A study of career and employment trends by Stanford’s Graduate School of Business found that the school’s millennial B-school graduates are choosing personal development over opportunities with the traditional hiring heavyweights, which typically pay the big bucks. Twenty years ago MBAs focused on the brand and prestige of potential employers, with a tendency to favor Wall Street and consulting firms, says Pulin Sanghvi, director of Stanford GSB’s Career Management Center. Students rightfully assumed these jobs would add luster to the resumes.
Now, however, MBAs are focusing on building out their personal brands and value propositions. They’re more willing to search longer for lower-paying jobs that provide an opportunity to build out their business “tool kits” with down-and-dirty experience, Sanghvi says. Startups, in particular, are drawing in more MBAs. “There’s not the attitude that this company has to be an IPO or it’s a waste of time,” he adds. “Instead, students are realizing that they’ll learn how to build a company, how to hire people, how to take a company public.”
Some students are eschewing the traditional employers altogether and striking out alone. Since 2011, between 13% to 16% of Stanford B-school graduates have opted to start their own companies, compared with the 10% average for most of the previous decade – in 2004, only 7% of graduates planned to launch entrepreneurial ventures.
It’s easy to assume that this generation is simply riskier. But Sanghvi doesn’t see it that way: “They’re aware of risk – they know there is a one in 10 chance that a startup company might not make it,” he says. “But they also understand that even though the event risk may be high, the longer term risk isn’t that high.” And in the process these hires stand to gain critical skills for starting their next company.
This shift has also spawned a new buzzword at Stanford – spikiness. Spiky MBAs specialize in three or four unique skills that make them stand out, as opposed to being just mediocre at a lot of things. “We want students to build their professional identifies around a few things that they can be the best at,” Sanghvi says. These spiky MBAs then go out into the world in search of unique and specialized jobs.
Finding that special role is undoubtedly a rough road in a tough economy. But the market is increasingly supporting the approach, Sanghvi says. New industries that didn’t exist two decades ago, such as clean tech, technology and healthcare, have popped up and pulled in MBAs. In the past, MBA jobs were aggregated in a few industries and then concentrated even further to just a handful of sought-after employers. Now the playing field is structurally larger and more diverse than it has ever been, Sanghvi says.
The numbers back him up. In 2012, Stanford’s 786 MBAs were hired across 367 organizations. Some 81% of the school’s employer base hired just one MBA, and only 1% of the employer base hired five MBAs or more. “If you look at the [employment] statistics you might conclude that this is a scary time to graduate, but honestly this is the most empowering time in the history of the school,” Sanghvi says. “Students have so much opportunity that they want to find the right fit that’s consistent with what matters most to them.”
Stanford’s Career Management Center has taken note. Instead of simply ensuring that their graduates are gainfully employed (93% of 2012 MBAs had job offers three months after graduation), Stanford is set on making sure MBAs are securing jobs they actually want. “We really focus on helping students explore who they are and what they’re most passionate about and what they want to do,” Sanghvi says.
So how exactly do they do it? “The strategy is fairly simple: We help each student define a unique career and life vision, Sanghvi says. The Career Management Center has gone so far as to formalize this process and hosts half-day Career and Life Vision workshops. Sanghvi estimates that 75% of MBAs attend the voluntary sessions. This type of guidance has superseded the more traditional job search strategy advice and even changed the career center’s approach to recruiting, which now entails forging connections between B-school students and alumni early on.
When they arrive on campus and throughout their Stanford experience, MBAs are asked to build and refine a hypothesis around the question: What should I do with my life? Based on their answers, the career center then pairs them with alumni who can act as “thought partners.” The theory is that these alumni-MBA relationships will eventually result in job opportunities. “Historically, you wrote a resume, dressed up in a suit and went to an interview and the conversation would focus on your high-level qualifications for the job description, but now students build a network of connections,” Sanghvi says. It’s assumed that these connections will provide a constant feed of job opportunities, particularly ones that aren’t public yet.
The emphasis on relationships over traditional recruitment has also pushed the timing of MBAs’ job search back from the fall to the spring. Some 67% of Stanford’s 2012 MBA graduates continued their employment search after the traditional on-campus fall recruiting season closed. Less than one-quarter of these MBAs wrapped up the season by accepting full-time offers facilitated by on-campus recruiting. Sanghvi attributes this to a greater emphasis on finding fulfilling employment, networking and just-in-time opportunities. Students aren’t inactive during the traditional recruiting cycle, he says. Rather, they’re reaching out to alumni who can advise them on industries and inside opportunities. “Because this networking is happening so organically around the question of what should I do with my life, students can build a web of connections – alums are thinking of them. They will reach out to students with jobs that haven’t been posted yet,” he says.
These changing career trends also require new metrics to measure success. Instead of simply chalking up a six-figure gig with a big brand as a win, Stanford is honing in on the alignment and happiness of both MBAs and alumni. As early as next year, Sanghvi hopes to introduce a standardized survey that will measure happiness and fulfillment when students leave Stanford and again at regular intervals across their lifetimes. “Our focus in on the long-term game. We believe that if we can get students asking the right questions here, they’ll keep asking those questions of themselves five, 10, 20 years from now,” he says.
Will this plan breed success? That really depends on MBAs’ individual definitions of the term. However, Sanghvi is confident the outcomes will be positive: “The real upside here is that students can find paths that they really love and that they’re really passionate about and that really brings out the best in them.”