It’s that time of the year again when MBA students are marching off to their summer internship jobs in one of the best job markets in years. At many schools, internship offers were up, with some lucky students having multiple opportunities from which to choose. Pay is trending higher and an increasing number of elite students are even getting sign-on bonuses–for summer jobs!
“It’s been very, very strong, with quite a few students having multiple offers,” says Jack Oakes, assistant dean for career development at the University of Virginia’s Darden School of Business. Out of a first-year class of 320 plus students, more than 99% got internship offers this year. Only one MBA candidate didn’t have one.
This summer the big news is that investment banking firms are back on campus hiring for intern slots, while the consulting firms–which tend to pay the most money for their interns–are as aggressive as ever. “It’s nice to see investment banking recover strongly in terms of both demand and student interest,” adds Oakes. “We’ve had one of our strongest years ever in investment banking recruiting, and interestingly the number of non-New York locations where students will intern is up as well. It has spread beyond New York to places like Houston and Charlotte.”
CONVERSION RATES AT SOME SCHOOLS ARE GOING DOWN BECAUSE THE JOB MARKET IS SO GOODIn fact, the internship market is so hot that conversion rates on internships–the percentage of students who receive and accept an offer from an internship employer–are actually down at Darden and several other leading schools. The reason? Students have gotten a bit more choosy and are so confident in getting a full-time job offers elsewhere that some are not automatically accepting their opportunities from summer employers.
At Darden, 38% of the class last year source their full-time jobs from an internship, down from well over 50% in previous years. “It just shows that we’re in a much better job market,” says Oakes. “Now students are coming back with that full-time offer and asking if that is the right situation for them. Many are deciding to re-recruit and look for other opportunities.”
The same phenomenon is true at Dartmouth College’s Tuck School of Business. “There’s a trend toward students really waiting and finding something that may be a little more nuanced to what their needs are,” believes Jonathan Masland, director of the career development office at Tuck. “I find that students are willing to try something that they really want to do and that may not not always lead to a full-time offer.” That translates into more MBAs going into early stage startups and non-profit organizations as well as more domestic students working internationally in such places as London, China, and Brazil. “It’s being very deliberate about what is the right thing and being less willing to compromise. It reflects a confidence but also the fact that we work really hard to help students frame what’s right for them.”
An analysis of business school internship data from last year turns up some surprising and novel results:
HIGHEST MEDIAN MONTHLY INTERN SALARIES: $8,200 AT CHICAGO BOOTH
The highest median salaries didn’t go to MBA students at Harvard, Stanford, or Wharton, but rather the University of Chicago’s Booth School of Business. Boothies commanded mostly median bases of $8,200 in their internship jobs–$1,400 a month more than MBAs at Stanford and more than $700 a month more than Harvard MBAs. How come? More of the students are HBS, Stanford and Wharton may be opting for experience over pay, setting themselves up for more lucrative long-term roles at private equity and venture capital firms, as well as startups that might throw equity into a full-time job offer.
Overall, MBA interns at the top 25 business schools–who generally work 10 to 12 weeks in their jobs over the summer–pulled down between Chicago’s high of $2,050 a week to $1,400 for MBA interns at the University of Washington’s Foster School. You can bet that no one is fetching coffee at those rates of pay.
Increasing numbers of MBA students–though not yet a majority–are getting sign-on bonuses for their summer jobs. At Harvard Business School, for example, slightly more than a third of the Class of 2015–34%–gained extra median pay of $2,500, up from only 13% a year earlier. The increase was driven particularly by investment banking firms returning to the market after a long absence due to the Great Recession. To become more competitive with the consulting firms, I-banks put extra cash on the table for 73% of their HBS intern recruits last year, up from only 16% a year earlier. Internship pay for MBAs, moreover, has been going up. At HBS, median monthly pay last year hit $7,494, up from $7,000 two years earlier.