MBA graduates from top business schools like Harvard Business School (HBS) and Stanford University are encountering a tough job market in 2023. HBS notes a decrease in job offers to 86% of their MBA graduates seeking employment, down from 95% in 2022. Similarly, Stanford University's MBA graduates experienced a decline, with 71% securing offers at graduation and 89% finding employment within three months.
Hiring Slowdown and Market Uncertainty
The data indicates a hiring slowdown in sectors that typically hire many MBAs, such as consultancies, audit firms, and tech companies. Many have deferred offers, planning to start employment in several months amidst economic uncertainty.
Consulting companies are grappling with aligning staff levels with a weaker market. Some firms, like EY, have delayed start dates for graduates who received offers a year ago, decreasing the need for new hires. EY and rivals Deloitte and KPMG have laid off staff due to clients canceling consulting projects and a subdued deal market. Starting salaries for graduates joining consulting firms like McKinsey and BCG have remained at last year's levels, diminishing their value considering inflation.
Stagnant Demand for MBA Degrees
Demand for MBA degrees in the US and Europe has stagnated among prospective students. However, this has been partly balanced by increased student interest in emerging economies like India and China. Additionally, there is a shift towards more specialized business degrees, particularly in analytics.
Harvard's Managing Director of MBA Career and Professional Development, Kristen Fitzpatrick, mentioned that this year's slow hiring market led to unique dynamics. Students with deferred start dates sought alternative employment or full-time roles, and more students pursued post-grad internships than usual.
The annual Application Trends Survey by the Graduate Management Admission Council administers the GMAT test for business school entry, revealed a 5% decline in interest for MBAs and all business school degrees globally in 2023.
Proactive Pursuit of an MBA
Barbara Coward, founder of MBA 360 Admissions, noted that consulting and tech fields appear somewhat soft, but healthcare is growing, and jobs requiring data analytics will be in demand. The dip in hiring is due to market uncertainty, with a "wait and see" approach for additional hires, especially for newly-minted MBAs. Companies face challenges as households suffer from the lingering aftermath of inflation. However, Coward emphasized that the dip in graduate recruitment persists. Prospective students focus on immediate issues by applying for an MBA as a proactive step for those dissatisfied in their current jobs. Coward advised that worrying about placement can come later when the economy might change.
Pedro González, president of TalentMBA and a former careers adviser at several business schools, anticipates a salary stagnation for MBA graduates next year due to economic uncertainty. He points to the Silicon Valley Bank collapse in early 2023 as a sign of equity contraction affecting the VC market and putting pressure on startups. Andrea Sparrey from Sparrey Consulting, an advisor to MBA students, notes that prospective students are now asking more direct questions about the expected returns from pursuing an MBA degree.
