The MBAs that cant find jobs
Hey Weekly Sitreps Readers!
Hope everyone had a great weekend. This past weekend I went down to Port Aransas and did duck hunting with some friends. We got plenty of ducks and I almost got hypothermia on my feet. It was really fun, minus the incredibly cold and wet weather. For this weekly sitrep I wanted to talk about a few things.
WSJ - Turn on this setting in your iphone to protect your money and photos
WSJ - No A.I. machines can not think
CNBC - YouTube star Mr. Beast calls X profit a facade
NBC - Colorado pastor accused of pocketing $1.3M in crypto scheme says 'Lord told us to'
MSN - Palm Springs capped Airbnb rentals. Now some home prices are in free-fall
WSJ - Iranian Military Technology and Advisers Aid Houthi Attacks in Red Sea, Officials Say
The WSJ dropped an article the other day on the MBAs who cant find jobs in this economy and of course I got a lot of DM’s in my instagram account from followers wanting my analysis and reaction.
This is a super interesting article because it pulls back the curtain on MBA recruiting and highlights some metrics and scenarios that really only recruiting MBAs care about. If you’re an applicant and just exploring MBA programs you probably would not think about what this article is discussing, but I think its a great example of how MBA recruiting is tied to the business cycle and also how MBA recruiting exactly works.
So what exactly is this article saying and what macro economic trends are driving a “slow down” in MBA recruiting? Let’s break it down.
This article goes into great detail on how it is a tougher job market for graduating MBAs than in recent years (i.e. pandemic).
From late 2020 to 2022 consulting, tech, and finance hired an above average number of MBAs. This was due to extreme business demand in each one of these sectors. I.E., consumer behavior shifted online (tech), businesses needed money for acquisitions (banking) and companies needed help to analyze and change their business (consulting). These three sectors are now slowing down hiring significantly after adding a lot of headcount during the pandemic.
For some of the folks hired into consulting, their start dates have been pushed back significantly (6 + months in some cases). This is due to softening business demand for consulting services.
Companies are trying to rationalize their headcount levels due to post pandemic macro economic headwinds such as shifting consumer behavior, increased borrowing costs and over hiring during the pandemic. The following post MBA 3 month employment percentages (a key metric that business schools track) tell an interesting story.
Harvard Business School: 20% of job-seeking graduates are unemployed 3 months after graduation (up from 8% in 2021).
Stanford Graduate School of Business: 18% are unemployed 3 months after graduation (up from 9% in 2021).
MIT Sloan School of Management: 13% are unemployed 3 months after graduation (up from 5% in 2021).
So essentially, more MBAs do not have a job 3 months post MBA than in the past. Full time MBA recruiting starts almost as soon as you get back from your summer internship and for a lot of people is wrapped up by December of that year. It picks back up in the new year and continues through graduation.
Besides the obvious impact on MBAs (not having a job after paying 200K for an expensive MBA degree) these trends are also impacting MBAs in the following way.
It is more challenging for career changers than in times past: A lot of MBAs are career changers (i.e. those seeking a career pivot to a radically different industry) face even greater difficulties as employers prioritize candidates with relevant experience (such as those with prior banking or consulting experience). Some graduates are taking on temporary jobs or even changing the industries they were targeting to secure employment.
Companies are being more cautious hiring and shifting priorities: Companies are being more selective and focusing on experience over potential. One of the worst kept secrets in MBA recruiting is that companies hire MBAs who have almost no experience in that field or industry. They look to hire hire MBAs based on their business potential, mental agility, ability to grind and how they present themselves. This is how you end up with former musicians becoming business consultants at McKinsey for example. With a slowdown in business needs and more MBAs to choose from, companies now have the pick of the litter when it comes to hiring MBAs and can be much choosier.
Overall, the job market for 2023 MBAs is more challenging, with a significant increase in unemployment rates compared to pre-pandemic years, particularly impacted by slowdowns in traditionally strong sectors like consulting, tech, and finance. However, with resilience, flexibility, and exploring non-traditional paths, graduates can and will ultimately find their footing.
Anecdotally, I have heard from friends and mentees currently in top MBA programs that recruiting has been a lot harder, especially for sectors such as consulting. Friends at Wharton have told me that from 2021 - 2022 basically any MBA with a pulse could get hired into a MBB firm, and now the hiring has pulled back drastically.
So what is my analysis on this?
This article makes it seem all gloom and doom for MBAs right now. I have even seen some people even say the “MBA bubble has popped”. I find that take to be pretty hyperbolic for the following the reasons
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