Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 24, 1993 TAG: 9301220054
SECTION: BUSINESS PAGE: F-3 EDITION: METRO
SOURCE: BY WENDY WARREN KNIGHT-RIDDER/TRIBUNE
DATELINE: LENGTH: Long
MBA IS NO LONGER CONSIDERED A TICKET TO A HIGH-PAYING JOB
As she begins the last semester toward her master's of business administration degree at the University of South Carolina, Alison Asbill has a 3.9 grade point average - almost perfect.Asbill also is a certified public accountant with three years of experience at the state auditor's office.
Sound like an outstanding resume?
Fifteen potential employers weren't interested.
And Asbill isn't surprised - or discouraged.
"I knew when I decided to go back for my MBA that there would be a lot of MBAs out there," Asbill said. "There are jobs out there. You just have to look for them."
As Asbill's experience attests, a new relationship has developed between MBA graduates and the companies that those students court during job searches.
Graduates now laugh at the perception - once firmly held - that a MBA is a ticket to a high-paying job. Today, graduates are delighted merely to be interviewed for a position, and they are willing to negotiate lower salaries.
Employers, on the other hand, are demanding developed teamwork and leadership skills from the few MBA students they interview. And as they scrutinize their staffing levels, companies aren't holding out the promise of a lifetime job.
"In the last year or so, students' attitude has been that they know they are lucky if they find a job that is what they were initially hoping for," said Dudley Blair, director of Clemson University's MBA programs.
"They know they will have to search harder and longer," Blair added. "And, perhaps, they will have to take a job with a lower starting salary."
Consider these figures:
In 1988, 49 percent of MBA students who used USC's career center walked out of their graduation ceremony and into a waiting job. Eighty-four percent were employed within five months of graduation.
But in 1992, only 22 percent of students using the placement center had jobs at graduation. Only 55 percent had jobs within five months.
Until 1992, Winthrop College in Rock Hill placed 65 percent to 70 percent of its MBA students who were looking for a job within five months of graduation. But Winthrop could place only 45 percent of its 1992 graduates.
Jobs aren't going to get any easier to find, either.
The U.S. Department of Labor estimates that there will be 30 percent more college graduates than college-level jobs until the year 2005.
Still, students like Asbill say they will persevere. "Job hunting is sort of hard right now," she said. "But I'm not discouraged. My hopes are high."
The MBA crunch is yet another result of the recession, employers and educators say.
As the economy slowed, big business laid off experienced workers - about 5.1 million full-time employees nationally between January 1987 and January 1992, according to the Bureau of Labor Statistics.
Small businesses historically have hired such workers. But during the latest recession, the small business segment hasn't responded.
For instance, the National Federation of Independent Businesses reports that only 12 percent of its 600,000 members across the nation will hire workers this year. Another 12 percent said they will have to lay off at least one worker in 1993.
Despite that lack of demand, the nation's MBA programs have continued to churn out students.
The number of MBA degrees conferred grew 7 percent nationally from the 1987-1988 school year to the 1989-1990 year, the last year for which figures are available, according to the American Assembly of Collegiate Schools of Business.
At USC, the number of MBA degrees conferred in 1992 was up 36 percent over 1987 levels.
Winthrop conferred twice the number of MBA degrees in 1990-1991 than it did in 1987-1988.
At Clemson, which started its MBA degree program in the late 1980s, the number of degrees issued at May graduations since 1988 has quadrupled.
That converging trend - an increasing supply of MBA students and a falling demand for them - has created a daunting situation for students with MBAs.
Students are competing for a shrinking number of jobs, competing not only against a growing number of fellow MBA classmates but against still-unemployed graduates from previous classes and managers laid off in midcareer.
Asbill said the current situation would have been unthinkable in 1988, when she graduated with a bachelor's degree in accounting. Then, MBA students expected to be snatched up by growing companies.
"I would never have believed it," she said with a laugh. "But I sure believe it now."
MBA students and graduates understand only too well the reasons for the job crunch. After all, economic slowdowns and the corporate downsizing they necessitate are fodder for business school textbooks.
At USC, where students must work as consultants for local companies to complete their MBAs, students have even been asked to identify positions that could be cut.
"They have seen some of the negative aspects of the work force," said Ellen Moore, director of USC's MBA program. "They are prepared."
Cash-strapped companies have complicated students' job searches still further.
As they look for ways to cut costs, they are levying heavy demands on the graduates that they interview.
Sonoco Products looks for experience through internships and co-op programs, said Grady Weaver, corporate employment manager for the Hartsville-based manufacturing giant.
But Weaver also looks for broader skills, including strong interpersonal communication and problem-solving abilities.
Some employers' demands seem almost contradictory. They want specialized training but flexibility. They want traditional leadership skills but also a firm grasp of newfangled, bottoms-up management.
Sonoco's Weaver said, "You look for individuals that can do many things but also individuals who are very focused on what they want to do."
Employers like Sonoco know the position that they want to fill, and they're are looking for a student with those specialized skills, Weaver said. But, he added, employers also know that any students they hire might be asked to switch jobs several times during their careers. So they want flexibility, too.
Luckily for employers like Weaver, the job crunch has given companies plenty of students to choose from.
Weaver says applications to Sonoco are up, though in 1993 Sonoco will recruit at half the number of schools it did in 1988.
The changed relationship between MBA graduates and companies also has put new pressures on business schools, which are scrambling to decipher the skills their students need to get a job.
"I think employers find our students have the technical skills," said USC's Moore. "It's leadership skills, communication skills that they lack."
Considering their slim chances for employment, it seems surprising that students like Asbill aren't more upset.
But Clemson's Blair said student anger peaked in 1990.
"Two years ago, there were students who were mad," Blair said. "They just couldn't believe they had an MBA and they couldn't get a job. Now, students understand that this will be a slower process."
There still are pockets of discontent, Blair said. "But," he said, "it's surprising. The majority really have a more mature attitude about all this."
And there are lukewarm signs of hope.
Officials of the nation's top 25 business administration graduate schools recently told the Chicago Tribune that a few of their students had started to find job opportunities with Wall Street investment banks again.
As for Asbill, she plans to step up her search for a marketing job this semester. Despite her contacts with 15 employers, Asbill says she is just beginning her search.
"I haven't really worked too hard on it yet," she said. "I've only talked to about 15 people. I plan to really work on it this semester."