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Rob Melick, an MBA student at Indiana University’s Kelley School of Business, had lined up half a dozen meetings for a mid-March venture capital conference in California co-sponsored by his school, hoping to make connections that would help him land a position in the technology or financial services industries. When the event was canceled because of the Covid-19 pandemic, those meetings were moved to phone calls or online, via Skype, Zoom, and Google Hangout.
How the virus changes recruitment—and the overall labor market—is weighing on Melick and his fellow students, though he says he feels reassured that companies haven’t delayed any conversations with him. “There is a lot of stress and concern among classmates,” says the 32-year-old, who’s at home in Bloomington, Ind., preparing for lectures and coursework set to resume remotely at the end of the month.
The class of 2020 is gearing up to enter the workforce amid a daily barrage of warnings about a global recession—or even a depression—from economists and politicians, and talk of corporate bailouts and the nationalization of companies. If hiring stalls, new grads could end up unemployed or having to settle for lesser roles, putting them on a weaker footing at the outset of their career.
The outlook isn’t good, but it’s too soon to tell how bad things will get, says Elise Gould, a senior economist at the Economic Policy Institute, an independent, nonprofit research group in Washington. “The best-case scenario is there’s a delay in the system and then it picks up again, and people may not get jobs as early as they’d hoped,” says Gould, who publishes an annual report about the labor market for each year’s graduating class. “The worst-case scenario is we’re headed for a recession, and that could hit all sectors of the economy.”
The 2008 financial crisis may offer a guide for what to expect: For college grads age 21-24, unemployment was at 6.4% in March 2009, compared with 5.1% in March 2019, according to EPI extracts from Bureau of Labor Statistics data. The experiences of the MBA classes of 2010, 2011, and 2012 may provide some comfort: Despite entering the job market amid a global restructuring and deep layoffs on Wall Street, most found work after graduating—even if it took longer and their roles weren’t always where they wanted to be, according to a Bloomberg Businessweek of 15,050 MBA alumni in 2018.
Recruiting for some industries generally starts early in an MBA’s second year. By February, about 60% of students will normally have offers, says Philip Heavilin, executive director of career development at Rice University’s Jones Graduate School of Business in Houston. By graduation in May, 80% will have a job. The experience of the class of 2020 could show a sharp contrast between those who secured positions before the virus-triggered market crash, and those hunting for work afterward, he says.
Career services offices including Heavilin’s are finding that job offers for MBAs haven’t evaporated yet. “We’re reaching out and taking a temperature check and seeing what employers are thinking,” he says. “So far, there are no plans to pull back.” Indiana’s Kelley School is receiving new postings, including from a large consumer goods company, says Eric Johnson, executive director of graduate career services.
Management consulting firm Bain and Co. has no plans to scale back on the offers it’s made to more than 600 MBA-level hires worldwide, says Keith Bevans, a Chicago-based partner who heads up global consultant recruiting. “You have to hire through the difficult times,” he says.
Not every sector can operate in the same way, especially if customers aren’t spending money to travel or eat out. Airlines are already imposing steep job cuts, for example. “We’re in new territory, clearly,” says Anthony Carnevale, an economist at Georgetown University who directs the school’s Center on Education and the Workforce.
There’s one option that could be safer for a graduate than entering the workforce: Staying in school. College seniors might consider a graduate degree, and MBAs who don’t land jobs could pursue an industry-based certification that will make them more employable, Carnevale says. “It’s going to be a rough several months. A bad start will affect you deep into your career—your first job, your second job,” he says. “This is going to be a tough summer, and if you get a recession, it’ll be another 10 months of slower hiring.”
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