Is an MBA worth the money in this economy?

[sallyawp]

<p>The following are some exerpts from an article in today’s Wall Street Journal:</p>

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With Jobs Tight, M.B.A.s Head for Home Article
By ALINA DIZIK

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After working in public accounting for three years, Joe Fusco, wanted to become an investment banker. So he invested more than $70,000 and two years into an M.B.A.</p>

<p>But as he prepares to graduate from the University of Notre Dame in Indiana next month, Mr. Fusco, 27 years old, hasn’t had any luck landing a position in finance. The only solution he has is to go back to his accounting roots. “It’s a tough pill to swallow, but I’ve come to the conclusion that I can’t sit and wait and cross my fingers,” he says.</p>

<p>The majority of students at top business schools attend the programs as a way to boost their skills to change careers. This year, making that happen has turned into a nearly impossible task. And that means a significant number of soon-to-be grads who entered school back in 2007 are being forced back to their pre-M.B.A. careers in the hopes of finding a job.</p>

<p>“Career switchers are getting hit the hardest,” says Kristen Lynas, associate director of career management at Georgetown University’s McDonough School of Business. Those looking to switch fields make up the majority of each incoming class at the school, she adds.

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Sean KellySteve Canale, manager of recruiting and staffing services at General Electric Co., in Fairfield, Conn., says that with so many applicants, previous experience is getting a bigger emphasis when the company weeds out candidates. “That’s the sweet spot – people who have industry expertise in the industries that we’re strong in,” says Mr. Canale, who hires about 120 M.B.A. students each year for a sales and marketing program.</p>

<p>In past years, GE would have been more open to M.B.A.s who were less of a match. But applications for the program grew 30% this year and Mr. Canale was able to be more experience-selective, he says.

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With firms like Lehman Brothers and Bear Stearns – which used to bring on upward of 800 M.B.A.s combined every year – now defunct, and fewer finance jobs around, more business-school graduates are leaning on their experience to get them in the door. For example, the University of Chicago’s Booth School of Business has typically placed 50% of its M.B.A. alumni in finance, most at large investment banks. This year, students in all majors have been turning back to their previous fields to find work, says Char Bennington, Chicago’s senior associate director of career management. Ms. Bennington says other industries, like consulting and marketing, are also hiring fewer people and looking for experience.

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Even consulting firms – known for hiring career switchers – are looking for M.B.A.s with previous experience to hire.</p>

<p>Brianne Shally, 29, who graduates from Northwestern University’s Kellogg School of Management this spring, says she feels safer going back to a consulting job in Chicago for Deloitte Touche Tohmatsu, her previous employer, rather than make a career change. “I have a proven track record, if it comes down to names on a board” for a layoff or hiring, says Ms. Shally. She says consulting jobs haven’t been easy to land for fellow classmates, though. This year, she says, firms “were not willing to take a risk on students who did not have previous consulting experience.”

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But the idea of returning to an old career has some soon-to-be grads questioning the value of their degrees. A traditional post-M.B.A. position increases a degree-holder’s salary by 74% according to an annual survey from the Graduate Management Admissions Council.

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[A recent graduate] says he is worried that he’ll be earning the same as he did as a pharmaceutical rep – about $60,000 – instead of the $100,000 marketing job he expected to land after the M.B.A. program.</p>

<p>And [another recent graduate] says he is less certain his investment in the degree was worthwhile. Many of the auditing positions that he is finding don’t require a graduate business degree. “These are positions that I was pretty qualified for even pre-M.B.A,” he says.

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[Japher]

<p>Graduating into a poor(er) economy has always hampered newly minted MBAs looking to follow traditional MBA career paths. This doesn’t mean that they can’t make what they want in the future, it means that they just need to be creative in how they acquire the skill sets they need.</p>

<p>Also, down economy is a great time to start your MBA education.</p>

[gellino]

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Also, down economy is a great time to start your MBA education.

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<p>As long as you can get in amid the increased competition and the downturn doesn’t last another two years.</p>

<p>The article above does show how ridiculous fighting the order of the #4-8 MBA schools and how that will affect your career in comparison to luck and other factors completely out of your control. I do agree with Japher that all is not lost for these upcoming MBA grads. It just might take four years to get where they want to be instead of two and the path may be somewhat more unpleasant than it would have been four years ago.</p>

[Leopard03]

<p>What you said.</p>

<p>Also one must understand that jobs in IB will just not be there as in the past. These jobs may return or they may not, but an MBA from a top school (or any quality school) is highly advantageous overall.</p>

<p>Whenever a senior postition comes available at my company the job posting states “MBA not required but STRONGLY preferred”.</p>

<p>One may not land on Wall Street, but that MBA will help you get to the next level at your current organization, or seperate one from his or her colleagues.</p>

<p>These people were looking for instant return from the MBA and that is just not always the case. However, having the degree will open up brand new opportunities.</p>

[cbreeze]

<p>I agree in the longterm, the degree will pay off. However, new grads must have a contingency plan to repay school loans in case of not landing a high paying post-MBA job.</p>

[Denzera]

<p>most post-MBA jobs are still high paying, few people were betting on making $220k after bonus in their first year in M&A. If you absolutely have to go back to your Consulting job and take the $120k + bonus from a top strategy firm, or go into general management somewhere for $90-100k, or take a marketing position for $90-100k, life will not come to a screeching halt. Moreover, loan repayment will not come to a screeching halt.</p>

<p>In my visits to MBA admitted-student weekends the last few weeks (and this coming weekend), many students were still launching themselves into career in Buyouts, or Real Estate, or Sales&Trading, or a number of careers you might think were shrinking in opportunity. What’s really happening is that few firms simply aren’t recruiting anymore, but most have reduced the number of spots they’re planning to hire this year. Whereas JP Morgan might have hired 60 MBAs as M&A associates in past years, across 10 schools, now they’re probably hiring 40 or 45 and only going to 6-7 schools. The very best students are percolating down from the very best firms to second-tier firms, taking some of the spots that second-tier students might have taken, some of whom now percolate down to third-tier firms, and third-tier kind of students are probably having to re-evaluate their plans and become open to different industries.</p>

<p>Perhaps they’re no longer on a track to be making, 4, 5, 600 grand a few years out from MBA; perhaps now they’re having to settle for making 2-300k. But they’re still not going to have any trouble seeing the ROI on their degree investment.</p>