Recession – The Reality for the MBA Recruitment Market

“Applications to business schools are surging, buoyed by a shaky economy and

lingering fears over job security, the organization that administers the main businessschool

admissions exam said Aug. 26.

The Graduate Management Admission Council (GMAC) said that 77% of business

from 64% in 2007. It's the second-largest year-over-year surge in applications to fulltime

programs since 2002, and the highest level of increase in five years, GMAC said.

And early signs are that the upcoming admissions cycle will continue to be strong.

The strong demand for business school did not surprise admissions officers, who note

that applications for MBA programs typically go up when the economy slides. A similar

upturn was seen following the dot-com crash earlier in this decade.” Business Week 27

August 2008

House prices falling, cost of petrol rising, cost of food soaring, inflation rocketing. All

classic signs of economies in recession. On the 2nd of September the OECD said that the

UK will fall into recession later this year and reduced growth forecasts significantly. But

what is happening in the MBA jobs market? Is it all gloom and doom?

The reality is that no matter how many people lose their jobs during lean times companies

continue to hire, particularly at senior levels. This is due to increased expectations of

senior staff as well as natural attrition.

Booz Allen’s CEO Succession Report suggests that between 1995 to 2006, annual CEO

turnover has grown 59%; in that same period, performance-related turnover increased by

318%. In 1995, one in eight departing CEOs was forced from office – in 2006, nearly one

in three left involuntarily.

According to Financial Week finance chiefs of large U.S. public companies now last about

as long in their jobs as NFL running backs. According to a study to be released next

month by executive recruiter Crist Kolder Associates, roughly half of the CFOs at Fortune

500 and S&P 500 companies stay in their posts for less than three years. The average

career of a pro football running back is a tad over three years.

The study found the average tenure for CFOs at all big companies slipped to under five

years, about a year less than in 2006. Most CEOs also remain in their jobs for fewer than

five years, the same as in 2006.

Finally, CIO tenure spiked to five years in 2006 and 2007, according to CIO magazines’s annual

survey. In 2008 it dropped to 4.4 years.

But are top companies continuing their MBA intakes?

HSBC in Europe are looking to fill over 10,000 vacancies with salaries over £30,000. Many of

these posts will require an MBA. Standard Chartered Bank continues to search the world for

the best MBAs, particularly increasing its intake from Indian business schools. Middle East

companies are heading east to find top students from India, Singapore and Hong Kong. And

the major consulting firms such as McKinsey and BCG are advertising for a range of

experienced consultants to join practices in the UK, Germany and the US.

According to CoolAvenues, an Indian-based news service, “the increase in offers [for business

school students] from Singapore, Hong Kong and other South East Asian and East Asian

markets is proof of the trust placed in talent from Indian B-schools to lead the growth in these

sunrise industries and high growth markets.”

And the Economic Times of India ran a headline on April 8: "No slowdown impact on B-school

placements". Quoting the report findings, Economic Times said, "There are no signs of global

slowdown and a grim stock market situation on the recently concluded B-school placements in

India. Instead, a comprehensive post-placement analysis by a management portal

MBAUniverse.com highlights interesting trends and attitudinal shift amongst students that could

gain momentum in coming years."

What appears to be clear is that the traditional MBA sectors of financial services and consulting

continue to be not only the industries of choice, but also where a critical mass of jobs are being

created. However, a quick look at the jobs on MBA-Direct reveals that an interesting array of

companies, such as Zubair Corporation Oman (Chief Strategy Officer) and a private-equity

backed information services company in New York (CEO), continue to look for MBAs from the

top schools.

My top tips for finding the right role in a downturn:

• Prepare a no more than two page, excellent CV. Ensure it emphasizes your achievements,

provides measures of success and is perfect – no errors, typos or formatting issues.

• Join face-to-face networking groups in your community. You are likely to meet someone

who knows just the right job for you.

• Register on MBA-Direct.com and create a live profile. If you can’t be found you won’t be

found.

Betty Thayer is the Deputy Chair and former CEO of MBA-Direct.com, a division of execappointments.

com, the world’s leading executive jobsite. Following an MBA at The Owen

School at Vanderbilt University, she had a long career in strategy consulting. She founded

exec-appointments.com in 2002. Global MBA jobs, career advice and resources can be found

at www.mba-direct.com. Exec-appointments.com opens its office in Mumbai in October 2008