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Millennials With MBAs Forced to Look Beyond Big Firms

Graduates from the Harvard Business School MBA program.
Neal Hamberg | Getty Images
Graduates from the Harvard Business School MBA program.

The tap that once led from the nation's top MBA programs to the skyscrapers on Wall Street isn't flowing as freely as it used to. That's leaving many young MBA graduates looking for careers beyond the nation's Fortune 500 companies.

"They want to be on their own path," said Kristen Fitzpatrick, senior director of MBA career and professional development at Harvard Business School.

The change is driven largely by necessity, but partly by choice.

The financial crisis of 2008, and the weak economy that followed, has left fewer major investment banks and big corporations offering lavish compensation packages to large crops of young MBA graduates, recruitment officials say.

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Meanwhile, many new MBA graduates also aren't as enamored with the prospect of that path, and are more interested in working for a small startup or going into business for themselves.

"If the compensation isn't there anymore like it used to be, students look at that and say, 'If I'm going to work that hard I'd rather do it for myself than for a big bank,'" said Maryellen Reilly Lamb, director of MBA career management at the University of Pennsylvania's Wharton School.

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A decade ago, Lamb said, perhaps 70 percent of Wharton graduate students were landing jobs at big corporations, consultancies and investment banks

These days, around 50 percent of students are getting those types of jobs, and the big companies that do hire on campus may pick just one student, instead of a large group.

A similar shift is going on at Harvard. Fitzpatrick said a decade ago about 60 percent of the students graduating from the MBA program landed a job at a Fortune 500 company, often months before graduation.

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These days, perhaps 30 to 40 percent of students are landing those kinds of jobs in that predictable way. Some will even be graduating without a job, something she said used to be much less common.

More students taking longer to land jobs, and landing them at smaller companies, has meant big changes at Harvard's recruitment office and in the classroom. But Fitzpatrick said the Harvard students themselves seem more willing to hold out for the job they really want.

"Students are way more comfortable waiting for that right opportunity versus just jumping on the (first job offer)," Fitzpatrick said.

Nationally, about 17 percent of students who graduated from full-time U.S. MBA programs in 2012 intended to go into finance or accounting, according to an annual survey done by the Graduate Management Admission Council. That's down from 28 percent in 2008.

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About 60 percent of students who graduated from a full-time U.S. MBA program in 2012 had a job offer at the time of graduation, according to GMAC's survey data. That's a sharp increase from 2010, when just 37 percent of those students had a job offer at graduation, and about the same level as in 2008.

At UC Berkeley's Haas School of Business, Lisa Feldman, the executive director of MBA Career Management, said she's also seeing a lot more interest in finding jobs with startups or other small companies. She thinks that's partly because millennials are more focused on finding a job where they feel like they can have a big impact.

Even though many of these graduates have come of age amid a difficult economy, Feldman said there's plenty of appetite for taking a chance on a less established company.

"You would think that after everything they've seen perhaps they'd be risk-avoidant, but it may be that they've seen that large institutions are not necessarily reliable," she said.

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