Employers give MBAs the cold shoulder - but interns are welcome

Not so long ago, an MBA from a top business school was an automatic passport to a lucrative job in investment banking or consultancy. But the class of 2002 are not finding things so easy.

Far fewer offers are being made in the current climate. For many, it is time for plan B.

At this stage of the year, the vast majority of MBA students are usually sitting pretty. The lucrative job offer is in the bag, the high-octane career awaits - and the investment of time and anything up to 40,000-50,000 (€64,000-€80,000) has paid off.

Not this year. Against the background of an already weakening economy, September 11 happened at exactly the point when most banks were just getting ready to cream off the best on the milk round.

Sam Gratton, a second year MBA student at IESE in Barcelona, was one of the lucky ones. After a summer internship in the equities division of a leading investment bank, he already had his contract in the bag.

&quotI know of several seriously good candidates who didn't get offers,&quot he said. &quotPeople like me are breathing a sigh of relief. I am aware that I was in the right place at the right time with the right people.&quot

Gratton believes that MBA finance graduates now face the worst recruitment situation in 10 years. &quotThis is as bad as it gets,&quot he said.

Whether or not that is true, leading business schools across Europe confirm that there has been a marked decline in the number of banking offers from autumn 2001 onwards. Insiders estimate that offers are down anything from between 15% and 50% against the previous year.

Mary Boss, Director of the Career Management Service at INSEAD, said: &quotThings are more limited. The big banks have been fairly frank about this. We have had perhaps 60% of the number of banks on campus as this time last year.&quot

Janet Bacastow, Associate Director, Finance Careers, at London Business School, agrees: &quotNot as many students who had done summer internships had these converted into full-time offers as last year - and fewer new offers were made during the milk round.&quot

It is a similar picture at Rotterdam School of Management. According to Hugh Lailey, Director of the Career Management Centre, overall hiring numbers are down. &quotMany banks are cagey about numbers,&quot he said. &quotSome of the big multinationals are hiring at the same level but we have probably lost one out of three banks coming on to campus.&quot

If many recruiters have slammed on the brakes, what does that mean for the job hunters?

The picture is not all gloom, insist the career experts. Corporate finance and mergers and acquisitions have, inevitably, been hard hit. Yet banks are still hiring, albeit more modestly, in areas such as research, asset management, private banking, fixed income and, to some extent, sales and trading.

&quotIf students look more broadly, the opportunities are there,&quot said Boss at INSEAD. &quotBut it may mean sometimes opting for their second rather than first choice career.&quot

Lailey, at Rotterdam School of Management, advises students to have an alternative strategy. &quotWe say look at other areas which will take you in the right direction over the next year or so. Build up a skills base and exposure to the business and then maybe move across later.&quot

Others suggest that students from many nations - most of Europe's top-tier MBA courses are very international - consider returning to their home country, where there may be a shortage of skilled professionals, even if the salaries are not as high as in London or New York.

For those dead-set on corporate finance, one route may be to work in the M&A department of a multinational with a strong acquisition policy.

Many people, of course, see an MBA as a means of making a career change. These 'transitionals' (as opposed to 'verticals' who wish to stay in the same field) make up 70% of the average class at INSEAD. Yet, right now, it is those who have already worked in banking or finance who are most likely to land a job.

The other positive news is that many MBA schools report sustained interest in hiring candidates for two or three-month summer internships, the sine qua non for most banking recruiters these days.

&quotWe don't see any fall in terms of the noise people are making about summer jobs - the critical issue is how many will make offers afterwards,&quot said Bacastow at LBS.

&quotWe are seeing an enormous amount of attention to the 2003 class in terms of summer programmes&quot offered for 2002, said Kathleen Dolan, Associate Director, MBA Career Services at IESE. &quotThe marketing is directed towards 2003, which is a big shift. People are expecting an upturn.&quot

Julie Hope, manager of the Careers Resource Centre at the City University Business School in London, even expects things to pick up from spring 2002. &quotWe anticipate people coming back and maybe even a second milk round,&quot she said.

In the meantime, are MBA schools experiencing a drop in applicants as people batten down the hatches? Anything but. INSEAD alone reports a 40% increase in admissions. &quotWe always do well in this climate,&quot says Rotterdam's Hugh Lailey. &quotWhen the economy tightens, the number of applicants goes up.&quot Many use redundancy packages to fund the course.

In any case, says Lailey, firms will continue to need the breadth, flexibility and mature contribution that an MBA qualification implies. &quotBanks have to take the long-term view of the business and need fresh blood in place for when things pick up,&quot he said.

For now, however, the job market for finance MBAs remains a lottery. Boss believes most will prove their mettle. &quotThe fact that it is a difficult job market is old news now. People are again taking charge of their careers.&quot