A funny thing happened to Jordan Sugar this spring, as he prepared to finish his M.B.A. degree at York University’s Schulich School of Business: he got a job. And not just any job—he got one in banking.
For Sugar, who was hired by BMO to work on its trading desk, that was something of a surprise. After all, classroom chatter around Schulich about job prospects had been every bit as depressing as the economic tragedy playing out on the front pages of newspapers. “Some graduates from 1999, 2000, 2001 came in to talk to my class about graduating amid the dot-com burst and I thought, ‘My God, I couldn’t imagine finding a job in that climate,’ ” recalls Sugar. “Then I saw Lehman Bros. go under and I thought, ‘Uh-oh.’ ”
If last year’s fall of global financial titans—traditional destinations for a big chunk of graduates—seemed to make M.B.A. job prospects disappear overnight, the ensuing global recession made the outlook even more grim. At least outside of Canada. Here, the picture has turned out to be far different. The country’s banking system has held up well, avoiding the need for the large-scale bailouts seen elsewhere. That strength has translated into a sustained job market for M.B.A.s: while American business schools report a drop of as much as 50 per cent in financial sector hiring, Canadian business schools say hiring levels remain strong, though down slightly from last year’s above-normal figures.
That means recent graduates like Sugar, who thought the dream of a banking job sank along with Bear Stearns, are finding that opportunities remain, especially for the most aggressive and talented graduates. “In all the doom and gloom, you want to hear some counter-stories out there, and Canada may be one of them,” says Joseph Palumbo, executive director of the Career Development Centre at York’s Schulich School of Business in Toronto.
It’s not all sunny, of course. Hiring by consultancies such as McKinsey, Deloitte & Touche and Boston Consulting Group has either dropped or remained flat—their clients tightened consulting budgets as the economy faltered. All in all, Canadian business schools report that hiring numbers so far have fallen between two and 15 per cent this year compared with 2008, when hiring was up about 10 per cent over 2007. Though firm stats will emerge this fall, schools say current hiring levels appear to be on par with those seen in 2005.
And while on the whole their performance so far in finding jobs for grads has Canadian business schools cheering, concern remains that the fretting by business schools south of the border might head their way. “The real losses in the financial sector, in New York and in London and throughout the rest of the world, have created a climate of fear that we’re acutely aware of here, even though the data in Canada does not indicate a downturn on any significant scale,” says Jeff Muzzerall, director of the Corporate Connections Centre at the Rotman School of Management at the University of Toronto.
The difference between Canada and the United States comes in large part from Canada’s banking sector. Finance can account for as much as 60 per cent of hiring at some business schools in southern Ontario, where the Big Five—Royal Bank, BMO, Toronto-Dominion, CIBC and Bank of Nova Scotia—remain among M.B.A. programs’ top 10 employers. If anything, the current economy has given Canada’s banks an edge in the global competition for top M.B.A. graduates (along with laid-off senior bankers from abroad). “It’s a great opportunity for organizations like us who are in a growth mode to pick up talent,” says Leslie Quinlan, vice-president of talent management at Toronto-Dominion Bank.
The key for M.B.A. grads now is flexibility. Investment banking is moribund, so those who had their hearts set on it are now considering retail banking or auditing. Some grads will launch their own start-ups, or choose jobs that prioritize quality of life over big paycheques. Muzzerall and others report growing interest among students in energy, non-profits and green technology. Students are also reconsidering government, in which interest had declined since the 1960s as pay and growth opportunities lagged behind the private sector; in the past year, the kind of stability that government work offers has reappeared as a top priority. “I’m not going to say it is full speed ahead, but because of the diversity of the economy, our students are finding opportunities,” says Gordon Fullerton, associate dean of master’s programs at the Sobey School of Business at Saint Mary’s University in Halifax.
Yet even in sectors where hiring is steady, employers are being very selective: they know competition for jobs is the fiercest it’s been in years. Increasingly, companies are looking for people who can provide big-picture thinking, experts say. Business schools have noticed.
They are bringing in professors from multiple streams to teach courses collaboratively, introducing students to the integrated management approach employers want. “Now [employers] say we need strong finance skills, the analysis, but—and here’s the difference—we’re not going to make an investment in somebody unless we feel they will be able to mature into a more senior position in the organization,” says David Edwards, director of the Business Career Centre at Queen’s University in Kingston, Ont.
The increasingly competitive, multi-skilled work environment is also pushing business schools to prefer students who have experience. “You’re just coming from a B.Com.? Go get a job,” Fullerton says he tells some students. “That’s a tough message to deliver, but I think in the long run statistics show employers are looking for folks who add value to the organization with work experience and an M.B.A.”
In the United States, business schools are playing it safe by preferring applicants who are most likely to find work in a troubled economy—which means admitting more people who are looking to advance within a sector or industry, rather than those who hope to use school to transition to a new career. Canadian business schools have traditionally been more flexible in helping students change career paths. But a more competitive environment may mean that schools reconsider their approach.
The shaken economy means many M.B.A. students will have to rethink their plans—and their roles in the emerging realities of business. But that’s nothing new. “Recessions are something we will always have,” says Marie-José Beaudin, executive director of career services at the Desautels Faculty of Management at McGill University in Montreal. “At the end of the day, it’s about thinking through market conditions and seeing where you fit.”
Jobs are only one part of the changing M.B.A. landscape. When historians look back on this recession and its impact on business education, they might find the downturn marked a return to relevance. Business schools in North America emerged in force in the years following the First World War, when young servicemen sought applicable skills with which to re-enter the workforce. Likewise, M.B.A. programs were born in Canada after the Second World War, when the need to adapt war assets and resources to peacetime prosperity created the need for advanced business training. Some experts say the past two decades have largely lacked galvanizing issues for business schools to tackle. “The power and relevance of an M.B.A. degree is unleashed when it finds meaning in something that is of supreme importance,” says Donald Thain, professor emeritus at the Ivey School of Business at the University of Western Ontario in London, Ont. Now, though, the recession has created just such a pressing need: “Essentially we’re flying blind. There is no current theory on which [government and business leaders] are relying as they attempt to turn around the problems in the American and global economy.”
That leaves the door open for M.B.A. programs to adapt their raisons d’etre—and for students to do the same. So, while the financial payoff of M.B.A. study might not be what it used to, consider this: what you learn might end up meaning a lot more.