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Journey to my MBA

Thursday, February 16, 2006

Job market heats up for MBA grads

Here's a more personal twist to the hot MBA job market. I really like personal stories like this. - Dave

Job market heats up for MBA grads

Elliot Blair Smith
USA Today
Feb. 15, 2006 08:39 AM

Former JPMorgan Chase private banker Adam Bernstein dropped out of Wall Street two years ago to pursue an MBA degree at Dartmouth College's Tuck School of Business.

Today, four months before the class of 2006's cap-and-gown ceremony, the Hanover, N.H., campus is covered in snow. Bernstein, 28, doesn't have a job yet. But by the time he graduates, the demand for new MBAs is expected to be at the highest level since the Internet bubble burst a half-decade ago, according to college career counselors and recruiters.

Not only has the job market tilted in the MBA candidates' favor, after several lean years, but many members of the class of '06, including Bernstein, plan to shun traditional career paths with investment banking firms and management consultants. In their stead, they are looking for work with hedge funds, private equity funds, technology companies and venture capitalists, each of which is an emerging force in global markets and in campus recruiting.

"They may not be hiring 50 to 100 people," like the major Wall Street banks, "but they're hiring a few here, a few there, that don't hit the radar but in aggregate are significant," says Steve Pollack, president of recruiting consultant WetFeet, which recently advised its clients to become more aggressive at courting top MBA candidates or face losing them to competitors.

WetFeet says the average MBA candidate has pared his job applications by more than half to 17 last year, from about 39 at the bottom of the hiring market in 2002, while seeing job offers nearly double to two for each new graduate. That is according to the firm's July 2005 survey of 2,653 business-school students, more than half of whom were MBA candidates.

Pollack forecasts this year's MBA candidates will earn slightly more than the $106,587 in average base pay and signing bonuses that grads netted last year. However, that is still less than the $111,530 average in pay and bonuses in 2000 before the Internet bubble burst and 9/11 terror attacks drove recruiters off campus, as Wall Street reeled from two major misfortunes. The rebounding first-year pay for MBA grads is not a bad return on investment for a two-year education that costs upward of $150,000 at leading business schools.

"The best indicator is seeing the students' confidence level at getting attractive, interesting jobs," says Andy Chan, director of the Stanford University Graduate School of Business MBA Career Management Center. "They have good feelings there will be a positive outcome at the end of their job search."

Julie Morton, associate dean of MBA Career Services at the University of Chicago's Graduate School of Business, affirms, "Students now don't get antsy when graduation rolls around and the right job offer hasn't come along."

That is a turnabout from MBA job prospects in 2002 and 2003.

"It was a tough slog," says WetFeet's Pollack. "At second-tier schools, people had no opportunities. Recruiters weren't knocking on their doors. They had a hard time going out in the market and finding any position, much less the position of their dreams."

One who felt the downturn firsthand was Jonathan Masland, 36, now the senior associate director of the Tuck School's Career Development office. The 2002 MBA graduate from the University of Pennsylvania's Wharton School dabbled in an Internet business venture just before the bubble burst.

"I became a millionaire and a non-millionaire very quickly," he says.

Rather than confront future market vicissitudes as an entrepreneur, Masland now doles out advice to MBA candidates who follow him. He says Wall Street banks and management consulting firms are back in force on campus, after "underhiring" and "overfiring" for a couple of years. But Masland says that many MBA candidates now are looking to career alternatives both for better opportunities and to avoid the riptides he experienced.

For instance, Tuck MBA candidate MacAllistre Henry, 27, says she is leaning toward joining a small hedge fund where she was a summer intern. Henry says she likes her career potential at the private investment fund - "I have friends who got half-a-million-dollar bonuses at hedge funds last year," she says - and her previous investment bank experience was a bitter one.

Hired by Lehman Bros, during a market up cycle, and sent to London, the Stanford graduate says she was laid off nine months later. MacAllistre complains: "Banks don't hesitate to bring people on and let them go."

Her classmate Bernstein says he recognized that his career at JPMorgan Chase was plateauing even as Wall Street began to recover from its trough. "You realize you're not going to get a phone call from the CEO to refer a billion-dollar client to you," he says.

The brash-talking MBA candidate, who has been investing in the stock market since he was 12, hopes that an MBA degree will enable him to move from the sales side of the business to managing money for his employer and his clients. He, too, hopes to find work with a hedge fund.

Bernstein, who claims he once made money on a veterinary hospital after watching how much his parents spent on their cat, says, "Ultimately, it's wanting to live or die by your own brain, and not always give your ideas to other people."


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