Feeling pinched

At business schools around the United States, where recruiting season is in full swing, this year's crop of graduates are facing a tough climate - layoffs on Wall Street and a contracting US economy.

Job offers are scarcer this year, and some employers are telling students they must wait until after the dust from the financial storm settles before they can start work. Investment banks, some gravely wounded by the financial crisis, are still interviewing but recruiting only half the usual number, students and administrators say.

"If I was a second-year student I wouldn't be too optimistic," says Dan Waters, who was recruiting at a job fair at Northwestern University's Kellogg Graduate School of Management. Waters, himself a graduate of Kellogg, was looking for one or two interns for business development company Smallbox Industries LLC.

Kellogg, in the Chicago suburb of Evanston, is among the elite business schools that funnel Master of Business Administration (MBA) graduates into executive tracks at top companies. In this year's dance between employers and students, the employers are leading.

"It certainly favors the companies to be more selective, which they're going to be in this environment because everybody's being more conservative in their hiring targets," Kellogg Assistant Dean Roxanne Hori says.

Across town, at the University of Chicago's Graduate School of Business, Wall Street's plight was a major concern.

With Bear Stearns, Lehman Brothers and Merrill Lynch gone or absorbed by other banks and some of the survivors reducing head counts, Wall Street will lose 45,000 jobs in the downturn, according to the state of New York.

"We've seen firms go away, and the level of M & A activity is down," says assistant dean Stacey Kole. "But there is still a lot of demand for these folks."

The University of Chicago's Graduate School of Business has a reputation as a Wall Street training ground, as do Columbia University's Graduate School of Business, MIT's Sloan School of Management, Harvard Business School, and the University of Pennsylvania's Wharton School.

"It's a tough time to be graduating now," says Kurt Kraeger, president of Wall Street recruiting firm Robert Walters. "You could make an argument that we now have a lot of hedge funds that weren't around then, but now a lot of those places have gone belly-up. The landscape has really changed, it's so consolidated."

In addition to fewer job openings, newly minted MBAs may find themselves in fierce competition with people who graduated a few years before them and who are now back in the job market after losing their jobs in the downturn.

Despite the carnage on Wall Street and a tightening job market in the wider economy, investment banks are still recruiting, albeit at lower levels.

Jamie Obletz, 27, a second-year student at Columbia's business school, says he has accepted a six-figure offer from an investment bank.

"It's new blood. It's cheap labor. A lot of these banks are starving for students fresh out of MBA programs versus someone five or 10 or 15 years out who may not be so current," Obletz says. Wall Street bankers and brokers commonly earn $400,000 a year.

Smaller, boutique investment banks are poised to pick off top candidates, and there are still opportunities in places like Hong Kong and Dubai.

"The financial services industry is not going to disappear, it's reshaping itself and it may be smaller. It is still going to need good, bright, smart individuals ... unless you assume we're all going to go back to raising vegetables and barter," says John Benson of eFinancialCareers, which runs a website listing global financial services jobs.

According to eFinancialCareers, 7 out of 10 business students who had banked on a career on Wall Street have shifted their focus, mainly to consulting or corporate finance, a phenomenon that perplexed some in the financial industry.

"I am surprised at the herd mentality of people moving toward consulting," says Peter Kies, managing director of Milwaukee-based wealth management company Robert W. Baird.

As is often the case in tough economic times, applications to business school have jumped, in spite of the cost of about $50,000 a year. Business schools offer a haven from a poor job market and promise higher salaries in future.

The banks themselves want to preserve the two-year MBA programs, where they will be looking for people to renew a profession stained by criticisms that bankers' excessive greed and poor judgment led to the financial crisis.

Agencies

(China Daily 11/10/2008 page11)