Ever since the Great Recession came to an end, the job market for MBA graduates has never been better. Employment rates for the best schools are commonly above 95% and starting pay has reached record levels.

The coronavirus-led recession is rapidly changing that climate. Many companies that recruit MBA students are already scaling back on their hiring plans. Some are canceling summer internships. Others are freezing all hiring. Even worse, a few companies are beginning to rescind the internship and job offers they have already made to MBA students.

The strongest MBA job market in history has now come to an end. And this is the early wave of cancelations, before the full brunt of the recession becomes clear. A leaked accounting of the MBA job market as of March 26th obtained by Poets&Quants provides a sobering view of what is to come (see Companies Begin To Freeze And Rescind MBA Internships and Job Offers).

Among hiring updates for 116 major companies, many of them mainstream recruiters of MBAs, 40 already have reported some form of freeze, cancellation, or rescinding of internship or job offers. According to the document, the info gathered is based on what employers are reporting to this school and “other top MBA programs.”

Companies from industries largely impacted by the spread of COVID-19, especially transportation, hospitality, and professional sports — have been most impacted. Delta Airlines has implemented a hiring freeze. JetBlue has also put a freeze on hiring, according to the document. Mariott, meanwhile, is rescinding internship offers. NBC Sports and at least one Major League Baseball team have put a hiring freeze or canceled internships. Ticketing companies such as Fandango and StubHub are also on the list of freezing hires or rescinding internship offers.

While many major MBA recruiters, including Google, Amazon, BCG, Deloitte, Goldman Sachs and others, have not reported any hiring impacts so far, several other major employers of MBAs have. AB inBev has reportedly put a freeze on hiring, as has Adobe, Visa and Wipro. Disney put internships and job offers on hold but have not yet canceled them. Facebook and Johnson & Johnson is also reportedly canceling interviews for summer internships. LEK Consulting is actually rescinding internship offers and may also delay the start of MBA hires who have already accepted offers.

The new reality: Just as the Great Recession wrecked havoc with the MBA job market in 2002, you can now expect the same. Back in 2002, a ton of people had their offers delayed. Internship offers during that summer were a disaster. In 2009, many careers just never started, even for some MBA graduates from Harvard Business School. There’s no reason to think that this time will be much different as companies seek to preserve cash, reduce expenses and cut back on hires.

The recession-ravaged MBA Class of 2009 does offer a guide for what to expect, though it could be worse: At the top ten business schools, MBA employment rates at graduation dropped an average of 21% from 2007, according to an analysis by Poets&Quants. At the next 15 highly ranked schools, the drop was even steeper: 23%. 

The MBA students who are most at risk right now are those who have not yet accepted or landed a full-time job. While some employers will almost certainly pull back their offers—and at Stanford one student told Poets&Quants that he had already heard of classmates in that category—most employers will likely honor their commitments. Oddly, some of the big brand business schools could bear the brunt of the downturn. That’s because at such schools as Harvard and Stanford, a larger percentage of MBA students tend to look outside the mainstream for jobs—in startups, early-stage companies, private equity shops, and VC firms that do not hire many MBAs and tend to be off-cycle in their MBA hires.

Just look at last year’s employment rates at graduation for Stanford and Harvard: 67.5% and 77.3%, respectively. For the Class of 2019, one of the best MBA job markets ever, those are very low MBA job rates. They reflect self-confident graduates who have targeted employment in companies that do not bring in many interns who return to campus in September with a job offer already in hand. At HBS, only an average of 38% of the students convert their internships into full-time jobs. At many other schools, the conversion rate is well over 50%. Back in 2007, two years before the Great Recession vacuumed up lots of jobs in 2009, 93.5% of Stanford MBAs and 94.3% at Harvard had jobs at graduation.

Also vulnerable right now are internship offers to MBA students. As one veteran career management official tells Poets&Quants, “The short-term impact will be on internships,” says the source. “Internships are where companies can pull back pretty easily. It happened in ’01 and ’08 because you can always find employees to work on short-term projects. Why pay MBAs to do that?” Managing interns at a time of significant challenge is also considered a drain on resources. And students who do manage to hold on to their internships may see fewer full-time job offers come from them.

What can students who don’t have a job in hand do? The best advice is work the alumni network of your school as never before and put yourself in the mind to settle. Now is not the time to be choosy. It’s better to have a job in the function or discipline you have targeted than that “ideal” position in a specific company.

You may have to enter an industry that continues to hire even if it is the industry—consulting, banking, healthcare would be examples—you had no intention of working for when you arrived on campus.

Don’t panic.Even in the Great Recession, the vast majority of graduating MBAs found jobs within three months of graduation. Those who failed to connect were able to find employment later. You need to be resilient and patient with yourself and the opportunities that may come your way.



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