MBAs Of The Financial Crisis Grow Up, Shift Jobs

Source: Bloomberg Businessweek, Shelly Hagan
Photo: MBA graduates Chris de la Motte, Brandi Downey, Ben Kraus, Timothy Walsh, Ranjan Roy, and Lee Anne Grant (from left to right) photographed in September of 2019. Photographers: Melissa Bunni Elian, Sharon Steinmann, Kayana Szymczak, Ryan Collerd, Melissa Bunni Elian, Cayce Clifford, all for Bloomberg

When Timothy Walsh graduated with an MBA from IESE Business School in Barcelona back in 2012, times were very different. Still reeling from the worst crash since the Great Depression, Wall Street banks were laying off more people than at the market bottom in 2009.

Walsh, who grew up in Downingtown, Pa., wanted to work in Europe, but the downturn made employers reluctant to sponsor expats. Instead, he wound up working abroad in Panama City, for a wind turbine manufacturer.

“It ended up working out, but it took a little while. It took me four or five months to find a job after graduation,” says Walsh.

New data from a Bloomberg Businessweek survey of 15,050 MBA alumni provide a unique look at how the world’s elite future business leaders survived the crisis and where they are today. The analysis of graduating classes of 2010, 2011, and 2012 from 126 business schools around the globe found that, despite entering the job market amid a global restructuring, most found work after graduating, though not always where they wanted.

Then, as the global economy grew, many shifted.

The analysis focused on industry employment. The survey asked alumni which industries they worked in prior to seeking MBAs, which they worked in immediately after graduating, and which they work in currently.

Finance

For the MBA financial crisis classes, the financial services industry, surprisingly, still ruled. It accounted for more jobs right after the MBA—3,184—than any other industry. Half started in finance and the rest were drawn from 25 other industries. By 2018, that number declined by 10%, to 2,850 employed in finance. That’s a relatively modest decrease, given the hundreds of thousands of industry layoffs in the same period.

Maria Ponce joined JPMorgan Chase’s leadership development program right after she graduated from Smeal College of Business at Pennsylvania State University in 2010. During her five years at the bank, she says, Chase repeatedly had layoffs but continued hiring.

“What I witnessed was laying off of the excess—in terms of that middle band of people who had been there for a long time, that were kind of static in their jobs—and sort of a resurgence of bringing in either young, new talent or top talent,” Ponce says.

Chris de la Motte, who worked at Lazard before attending INSEAD in Fontainebleau, France, in 2010, says his position as a young analyst wasn’t in jeopardy. The mid-level employees were most affected.

“It’s the VPs and the director and maybe the junior MDs, who are already expensive employees but not necessarily huge business generators for these banks— they tend to be the most at risk,” la Motte says. “The junior people were not that expensive and were still needed.”

Consulting

Consulting was a popular choice for fresh MBA grads; the industry surged by 54% as the first post-graduation job. That didn’t last: By 2018, 49% had bailed.

“The training, the high pressure environment, results, of course, in long hours, a very unpredictable schedule of travel. You’re basically remote-controlled by what the clients’ needs are, and that isn’t for everyone,” says Sven Merten, a managing director at CoMatch, an online marketplace for independent consultants.

Technology

Bloomberg data show that grads are nearly twice as likely to work in tech now, vs. before they went to business school. Before business school, 1,377 worked in tech, 1,728 landed there immediately after graduation, and 2,457 were in tech in 2018.

Lee Anne Grant decided to leave her job at Google in 2010 to attend Yale School of Management, partly because she thought tech giants were unstoppable, even amid financial crisis.

“I felt Google was doing so well that, no matter what I did, we were doing well and I couldn’t really have an impact,” Grant says. “I wanted to learn what it’s like to be at a company that is still figuring it out, where I can help a little bit more and not ride the coattails of a trend.”

After graduation, Grant worked at several startups including PopSugar and Brandless. She’s now at San Francisco-based Assembly, a startup focused on providing a health and wellness space for women.

Health Care

The share of MBAs working in health care rose to nearly 6% in 2018, from 3% before business school. Ben Kraus of the University of Pennsylvania’s Wharton School class of 2012, says the Affordable Care Act of 2010, aka Obamacare, was the driver.

“The ACA opened up the industry. It was done in one very rigid way for a long time, and that barrier was removed,” Kraus says. “It basically meant any way you can deliver health care efficiently, you will get paid more.”

Before Wharton, Kraus worked at a hedge fund covering the health-care and tech sectors. The fund generated positive returns during the crisis, but Kraus wanted to start his own company. After graduation, he went to consultant McKinsey & Co. instead, to pay bills and cover New York’s living costs. He stayed for 2 ½ years, then moved to a health-care company. Later, he turned his entrepreneurial aspirations into reality by co-founding Stellar Health, a tech platform designed to enhance physician performance.

Media

Ranjan Roy worked at Bank of America in New York during the financial crisis, and that was the final push he needed to go to school.

It was “realizing that the entire industry in trading was going to change significantly and not be the same thing it was,” Roy says. “I was nearing 30 and realizing if I didn’t try to change things at that point, I’d kind of be stuck in the same industry.”

Roy had always wanted to go into media, but when he completed his undergraduate degree from Emory University in Atlanta in 2002—right around the dot-com crash—the sector was cutting more jobs than finance, he says. So Roy chose what he thought would be a more stable route.

Business school gave Roy the opportunity to pursue his passion, and he started working at the Financial Times after graduating from INSEAD in 2010.

Roy continues to work in media as the founder of a content strategy agency in New York, but he’s unusual. In fact, of the 330 surveyed alumni who were working in media before graduate school, 270 ultimately switched fields. Only 1.6% of those surveyed currently work in the media.

Real Estate

You don’t need to tell Brandi Downey that the financial crisis crushed the real estate industry. Still, professionals who worked in real estate before going to business school were more likely to return to the industry afterward than were those working in any other field. About 42% of real estate professionals employed prior to getting an MBA continued to work in the industry upon graduation through present day.

So did Downey. A 2011 graduate of Jones Graduate School of Business at Rice University, Downey sought an MBA because the position she wanted at her employer, a real estate investment firm, required one. When she graduated, corporate real estate firms were laying off, rather than hiring.

“I thought I was going to go to back to the same company, but in the summer, it was really challenging to find a real estate internship,” Downey says.

Her heart was set on real estate, but Downey couldn’t find anything, so she accepted a short-term consulting gig. Six months later, she was hired to help start up a real estate brokerage. She remains in real estate and now owns a boutique brokerage firm in Houston.

“The funny thing is, in business school, I never intended to be an entrepreneur,” Downey says. “I was actually opposed to it.”

https://www.bloomberg.com/business-schools/2018/insights/alumni-career-path