16.2.2009
Recession forces MBA students to seek out a back-up plan
For decades, investment banking was a well-worn path to affluence for business school graduates. But as Wall Street teeters, many are scrambling to find alternate routes into a brutal job market.
Facing one of the worst economic downturns, some MBA students are lowering expectations. Aspiring investment bankers are looking elsewhere, while international students wonder if they will have better luck at home than in the US.
As big banks including Citigroup, Bank of America and Goldman Sachs Group cut tens of thousands of jobs, MBA students, who just a few years ago would have been aggressively recruited by companies, now expect to fight for the handful of positions available.
Meghan Gallery enrolled at the Massachusetts Institute of Technology (MIT) Sloan School of Management in September, with hopes of working on mergers and acquisitions at an investment bank. Now, she would consider a summer job at a start-up company, ideally in corporate finance.
Shrinkant Dave, an MBA candidate at Boston University, made a similar decision, accepting a corporate finance job at a retail chain rather than holding out for investment banking.
"I knew there were not enough jobs to go around, so I had to improvise," Dave said. "It's slightly disappointing, but not too bad. It's still in line with my goals."
MBA students face a radically changed job market. US employers last month cut payrolls by the most in 34 years, and US President Barack Obama has called for a $500 000 (about R4.9 million) cap on pay of chief executives of firms that get federal bailout money.
Wall Street has shed more than 19 000 jobs since the start of the financial crisis.
General Electric chief executive Jeff Immelt summed it up in a presentation in New York early this month: "Financial services ain't going to be the same in our lifetime."
Career counsellors at MBA programmes are urging the students to be open-minded about the jobs they will accept and to pursue aggressively those that are available.
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While companies are still sending recruiters to campuses, they are not hiring as many people. MIT officials estimated that recruiters on its campus were offering 20 percent fewer positions this year.
Moreover, MBAs are not a rare breed. More than 150 000 MBA degrees were awarded in the US in the 2006/07 academic year, according to government data.
Some students from outside the US are considering whether they would be better off returning home, particularly those from still-growing economies such as Brazil, China and India.
The programmes are costly. Last year the typical full-time MBA candidate attending a school outside his or her home state paid $32 333 a year for tuition and fees, a number that has risen 25 percent over the past five years, according to the Association to Advance Collegiate Schools of Business.
That does not take into account books or living expenses, which many full-time students also take out loans to cover. Compounding those concerns, many have taken on tens of thousands of dollars of debt to finance their educations.
"I am worried about it, more worried than I thought I'd be," said Matt Yosca, in his final year at the MBA programme at Babson College in Wellesley, Massachusetts.
Students who are using loans to cover living expenses said they were trying to cut back spending, just to minimise the amount of debt they would face after graduating.
Educators console students with the thought that the difficult economy will toughen them up.
"There is no doubt that the students who are coming out today will be more wary of credit risks, more careful," said Andrew Lo, a professor at MIT's Sloan school.
"You learn nothing from success. You learn far more from failure."
Source: http://www.busrep.co.za |
