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Where will all the MBAs go?

By ⋅ September 16, 2008 ⋅ Email This ⋅ Print ⋅ Post a comment
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Wall Street Sign.Image via Wikipedia

This is obviously pretty far down the list of priorities amidst the current market turmoil but is certainly of interest to me.

Bear Sterns, Lehman and Merrill represent three prime top-tier MBA hirers and with noted commentators doubting the future of the stand-alone Investment Bank model, I wonder what type or organization will step in to fill the recruitment gap. (I am choosing to be optimistic assuming the void will be filled).

Over the last few years, Hedge Funds and Private Equity have been hiring increasing numbers of MBAs but the verdict is still out on what shape those industries will be in moving forward and in any case it is doubtful that they will be hiring in sufficient numbers to make up for the shortfall.

I imagine the Consulting firms who have business models that are much more resilient to the business cycle  will continue to be major employers but what other industries can afford the expected starting salaries (US$100-150k) that in theory make MBAs a worthwhile investment?

Perhaps Sovereign Wealth Funds and a new breed of ambitious banks from the East will step up? Or perhaps those post MBA salary levels will adjust downwards, in which case MBA programs will need to reduce the fees they charge to maintain a worthwhile ROI for prospective students.

I’ll choose to believe that the MBA schools will find innovative ways to ensure the demand for their product (us MBAs) will continue to grow ensuring salaries and employment stats keep rising.

  • http://shehabhamad.com/blog shehab

    That was quick: the enterprising fellows at First Round Capital have setup a self-explanatory website called Leave Wall St Join a Startup. Hat tip <a href=”http://www.avc.com/a_vc/2008/09/leave-wall-stre.html”Fred Wilson.

  • http://shehabhamad.com/blog shehab

    CBS's Glenn Hubbard weighs in on the future impact of the current Wall St crisis for MBAs:

    A question that may be on your mind is “Does financial services need to shrink?” There will be job losses and exits, not only with the firms that have exited but probably more. But I have considerably more optimism for the medium term in financial services, and there are three simple reasons for that:

    1. The global phenomenon of an aging society puts pressure on the demand for a whole variety of financial products and services. This isn’t as well developed as it should be in the U.S. or the U.K., let alone in many emerging economies, and the number of return income vehicles, insurance products and so on will increase.
    2. Many of the big emerging economies are improving their domestic demand, which will generate a huge demand for financial services as they exit from the state provision of services to the market.
    3. The overwhelming forces of globalization and the demands for international finance. Anyone who says that the financial sector is going to shrink out of business has not been through these cycles before.

  • http://shehabhamad.com/blog shehab

    CBS's Glenn Hubbard weighs in on the future impact of the current Wall St crisis for MBAs:

    A question that may be on your mind is “Does financial services need to shrink?” There will be job losses and exits, not only with the firms that have exited but probably more. But I have considerably more optimism for the medium term in financial services, and there are three simple reasons for that:

    1. The global phenomenon of an aging society puts pressure on the demand for a whole variety of financial products and services. This isn’t as well developed as it should be in the U.S. or the U.K., let alone in many emerging economies, and the number of return income vehicles, insurance products and so on will increase.
    2. Many of the big emerging economies are improving their domestic demand, which will generate a huge demand for financial services as they exit from the state provision of services to the market.
    3. The overwhelming forces of globalization and the demands for international finance. Anyone who says that the financial sector is going to shrink out of business has not been through these cycles before.

  • http://shehabhamad.com/blog/2008/09/23/wsj-on-b-schools-responses-to-financial-metdown/ shehabhamad.com/blog | WSJ on B-Schools’ responses to Financial Metdown.

    [...] to step up recruitment and that alumni are tapping into the B-School networks to navigate the uncertain job market. Spread the [...]

  • http://shehabhamad.com/blog/2008/10/18/too-many-bankers/ MBAs, Media & the Middle East. | Too many bankers?

    [...] she is vague on what the relative compensation levels might be. I think finance will evolve (Glenn Hubbard explains why the long-term trends are in the industry’s favor) and new firms will fill in the void left by Lehman, Merrill et al. Bottom line is many smart [...]

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