This Year’s MBA Job Market: How Bad Will It Get?

MBAs who will graduate this year have good reason to be worried about their job prospects. The U.S. economy is already in recession and the drop in second-quarter growth—when MBAs will be flowing out of business school—is now credibly expected to be steeper than it was in the worst quarter of the Great Recession.

The official word from business schools is that it is too early to say what impact the spread of COVID-19 will have on either summer internships and full-time job offers. Truth is, they are just as anxious and concerned as students. Many are already preparing for the absolute worst.

The question is not whether the MBA job market will be bad. Instead, it’s how bad will it get? The likely hit from the coronavirus epidemic, according to J.P. Morgan, is that the U.S. economy could shrink 14% next quarter, much worse than the 8.4% drop in the fourth quarter of 2008, the nadir of the Great Recession.


Many companies are already cutting back. Many more will freeze all new hires. The upshot: A growing chunk of this year’s MBA grads could find themselves unemployed or having to settle for jobs they otherwise would not have taken. 

If past is prologue, a good number of MBAs who have already lined up internships and full-time jobs will see their offers clawed back by companies seeking to preserve cash and clamp down on expenses. At the worst of the Great Recession, some MBA grads who headed to Wall Street not only found themselves out of their new jobs. Some even had to return the signing bonuses given to them by the investment banks and money management firms they joined.

The recession-ravaged MBA Class of 2009 may offer a guide for what to expect, though it could be worse: At the top ten business schools, MBA employment rates at graduation dropped an average 21% from 2007. At the next 15 highly ranked schools, the drop was even steeper: 23%. 


At Harvard Business School in 2009, nearly one in four grads failed to have a job at graduation, as the employment rate fell to 76.8% from 94.3% two years earlier. At Northwestern University’s  Kellogg School of Management, the employment rate for MBA grads slumped to 68.1% from 91.9%, a 25.6% decline in jobs.

At several other highly ranked schools, it was even worse. At Rice University’s Jones Graduate School of Business, the MBA job rate at commencement plunged to 55.4% from 81.9% in 2007, a breathtaking decline of 42.1%. At the University of North Carolina’s Kenan-Flagler Business School, it dropped to 53.8% from 80.1%.

Even at the three-month mark after graduation, the career outcomes were not much better. At that point, when many grads settled for jobs that would not have been their first choice in a strong economy, some of the very best business schools reported that as many as three of ten grads were unemployed.


At Cornell University’s Johnson Graduate School of Business, 30.3% of the graduating MBAs in the Class of 2009 still had not accepted a job offer three months after commencement. At UCLA’s Anderson School of Management, 29.2% of the MBA grads were unemployed at that point. At the University of Michigan’s Ross School of Business, the unemployment rate was 28.5%; at the University of Pennsylvania’s Wharton School, it was 25.4%.

You read that correctly. Three months after putting a Wharton MBA on their CVs, one in four of the graduates were still without work.

If there is one shift that might provide some comfort, it’s that business schools have poured even more substantial support behind career services since the last downturn. “The biggest difference between then and now is that career centers are better resourced than they were at that point in time,” says a former career management director at an M7 school. “That was a wakeup call for deans and future deans. In the top 50 schools, you have good people working in the careers function.”


Keith Bevans, Bain Partner and Global Head of Consulting Recruiting

The MBA students who are most at risk right now are those who have not yet accepted or landed a full-time job. While some employers will almost certainly pull back their offers—and at Stanford one student told Poets&Quants that he had already heard of classmates in that category—most employers will likely honor their commitments.

Some are on the record, reassuring hires that they will have a job when they graduate. Bain & Co., for example, has no plans to scale back offers made to more than 600 MBA-level hires worldwide. “You have to hire through the difficult times,” confirms Keith Bevans, who heads global consultant recruiting, in a Bloomberg Businessweek interview.

Oddly, some of the big brand business schools could bear the brunt of the downturn. That’s because at such schools as Harvard and Stanford, a larger percentage of MBA students tend to look outside the mainstream for jobs—in startups, early-stage companies, private equity shops, and VC firms that do not hire many MBAs and tend to be off-cycle in their MBA hires.

Just look at last year’s employment rates at graduation for Stanford and Harvard: 67.5% and 77.3%, respectively. For the Class of 2019, one of the best MBA job markets ever, those are very low MBA job rates. They reflect self-confident graduates who have targeted employment in companies that do not bring in many interns who return to campus in September with a job offer already in hand. At HBS, only an average 38% of the students convert their internships into full-time jobs. At many other schools, the conversion rate is well over 50%. Back in 2007, two years before the Great Recession vacuumed up lots of jobs in 2009, 93.5% of Stanford MBAs and 94.3% at Harvard had jobs at graduation.

Also vulnerable right now are internship offers to MBA students. As one veteran career management official tells Poets&Quants, “The short-term impact will be on internships,” says the source. “Internships are where companies can pull back pretty easily. It happened in ’01 and ’08 because you can always find employees to work on short-term projects. Why pay MBAs to do that?” Managing interns at a time of significant challenge is also considered a drain on resources. And students who do manage to hold on to their internships may see fewer full-time job offers come from them.

Another especially vulnerable group of graduating MBAs will be international students who have had more trouble gaining work visas in the U.S. in recent years. “Unless and until the current regime changes, post-MBA job prospects in the U.S. for non-U.S. MBAs will remain weaker than normal,” says Paul Bodine, an MBA admissions consultant.


Veterans have seen this picture before. When Mark Consentino worked in Harvard’s career services office in the early 2000s – a time of the tech bubble, the stock market crash, and the 9/11 attacks — he witnessed “employers started balking on job commitments. Internships were canceled weeks before students were scheduled to start. Full-time job start dates were pushed back a year, a one-time cash payment as a buyout of your employment contract was offered,” wrote Consentino in a recent essay for Poets&Quants.

His best guess is that students with a job offer from one of the top consulting firms, investment banks, or technology companies should feel confident that come summer your job will be waiting. “While those organizations will be monitoring the situation, it would take a lot, on the level of a zombie apocalypse for their hiring to be curtailed,” adds Consentino, now CEO of

Elise Gould, a senior economist at the Economic Policy Institute, which puts out an annual report on the labor market for college grads, believes it is too early to tell just how bad things will get. “The best-case scenario is there’s a delay in the system and then it picks up again, and people may not get jobs as early as they’d hoped,” Gould told Businessweek. “The worst-case scenario is we’re headed for a recession, and that could hit all sectors of the economy.”


Trouble is, we are already in recession. On Monday of this week, the UCLA Anderson Forecast revised a week-earlier forecast that stopped short of predicting a recession. The updated version says the economy has already stopped growing and will remain in recession through the end of September.

Students, many on spring break or now taking their classes online, are showing how anxiety-ridden they are in Internet communities. “I feel awful for the current students,” wrote one commenter on Reddit who graduated with a finance degree in 2009. ‘it’s a terrifying experience. It’s scary, but time moves on. Try to learn from this and grow and try to keep in mind that this will not last forever, this will end.”


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