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Tuesday, November 26, 2013

The Job Market for MBAs is About to Take a Hit 11-26

The Job Market for MBAs is About to Take a Hit

If you’re graduating from business school this spring, you might want to be sitting down for this: the job market for recent MBA graduates looks poised to get a lot worse in 2014. That’s based on an annual survey conducted by Michigan State University, released yesterday.

   Though not random, it samples nearly 6,100 employers who recruit across 300 U.S. colleges and universities, asking about their anticipated hiring in the coming year, as compared to their actual hiring this year. The news is positive for those about to graduate from college, but potentially distressing for soon-to-be MBAs.

First the good news: Hiring of college graduates is expected to increase three percent in 2014, with some sectors doing even better than that.

“Strong demand for accounting, marketing, computer science, engineering, human resources, public relations, and the inclusive ‘all majors’ group will increase hiring for Bachelor’s degrees by seven percent,” writes lead economist Phil Gardner. The overall number would be even higher, in double digits, except that the normally robust financial services sector seems to have lost its appetite for hiring. Which brings us to MBAs:
The market for new MBAs has been hit hard. Since January, finance institutions have been shedding jobs by the thousands and curtailing hiring targets for new graduates. The federal government also expects to hire far fewer MBAs this academic year. Professional and scientific services, mining and oil, and manufacturing do not expect to change their hiring levels. The total contraction in the market for new MBAs will approach 25 percent.
The decline in government hiring is attributed to sequestration, the shutdown, and debt limit “brinkmanship.” As for finance, the survey cites news reports   which attribute the sector’s contraction to a variety of factors, including a slump in the mortgage refinancing industry.  
The report notes that some employers, concerned over economic uncertainty, planned to replace MBA hires with Bachelor’s candidates to cut costs.
The news comes as the number of newly minted MBAs continues to increase, as noted by the report. While graduates of top programs will likely be fine, Gardner cautions that “MBAs with little professional experience may have more difficulty landing a job commensurate with their education.”

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