Heart of the Matter
Andy Chan on jobs, careers, and more

About 30% of our second year class is still looking for a job. With a few exceptions, this stat is similar to most other top b-schools.  There are a variety of reasons why it’s so difficult to get a job now.

The biggest difference this year versus the last few years is that significantly fewer employers are hiring and among those that are hiring, they are hiring fewer people. There are many qualified, experienced candidates competing for these limited opportunities. In addition, larger organizations who may have recruited MBAs during the academic year in the past are taking a just-in-time approach. This results in more ad hoc recruiting processes in which students must do much more networking and interviewing, and be prepared for it to continue into the summer.

Some students have waited until later in the year to start their job searches in hope that the market would improve and that better jobs would come available (especially investment-related jobs). This was a sensible approach, but the market for investment jobs remains weak. It may be time for these students to consider boutique investment banking, restructuring and risk management roles, corporate development, hedge funds and corporate finance. One other option is to do some part-time project/consulting work to bring in income while continuing to network for that investment job.

International students who want to stay in the U.S. have a very difficult situation. Given the U.S. economy, U.S. employers are under pressure to hire American citizens. Given that many students want to change careers and employers have many candidates with exact experience, the challenge is further compounded.

Some internationals who intend to return to their home countries are waiting to start their job search until they return home, which makes sense since networking and interviewing are most effective in person.

Some U.S. students are taking some or all of the summer off and plan to start looking in the fall. This seems reasonable as companies typically hire more in the fall than in the summer. With hope that the economy will improve, it should be easier to find a job than it is now.

In 2002, 2003 and 2004, about 75-80% of the graduating students had offers at graduation. I am hoping that it will be similar this year, but it could be a bit lower given that this recession has negatively impacted many more sectors than did the dot-com bust.

Our career management center staff will be working throughout the summer to help the class of 2009.  The alumni career services staff supports all alumni who need career and job search support year-round. Check out our website for information and contact us if you need help.

Over the past five years, Private Equity was the hottest sector of interest for MBAs (and for lots of other white collar professionals who were seeking greener pastures). Almost everyone was interested in it. Even if they didn’t know what one actually did in a PE job.

PE sounded so glamourous and paid much more than most every other job. What a challenging and stimulating job! It was a blend between strategic consulting and investment banking, with seemingly fewer hours (but not really).  Plus the salary compensation of a venture capitalist and incomparable equity upside. How could you go wrong?

As the proverb goes, “What goes up must come down”.

We are now hearing from both job seekers and PE firms and the feedback is consistent. PE is now effectively shut down to job seekers. Even those with industry experience (pre- or post-business school) are finding it extremely difficult. In most cases, job seekers are competing against more experienced PE professionals who have been laid off.

If you have no prior PE experience, it will be virtually impossible to enter now. Save your time and energy and move on.

PE firms are very reluctant to hire new staff in this uncertain economy. Their investments are hurting. Credit is unavailable. Investors are skittish and having troubles of their own. Hiring is the last thing on the PE firms’ minds.

If you’ve been searching for a PE job and coming up dry, there are other options that we hear folks are pursuing instead:

1) Work for a portfolio company of a PE firm. Although there’s no guarantee that you’ll someday return to the PE firm as an investor, you will be able to maintain and grow connections with your PE firm network.

2) Take a pre-MBA analyst role in a PE firm. It’s not on the partner track, but you’re in the game. However, don’t assume that your firm will eventually give you an opportunity to get onto the partner track. Be thankful that you have the job, build great relationships and outperform expectations in your job. When the market improves, seek out growth opportunities within your firm or elsewhere.

3) Find a corporate development job, typically at a larger company that is doing mergers and acquisitions. If you like the dealmaking aspect of the PE business, this would be a good fit

4) Get a job where you learn how to run a company. This may involve a more traditional marketing, finance, sales, or operations job where you grow into a vice president or general manager over time. Or perhaps you can start or buy your own company with your own resources or with the support of some investors.

Some people moan “I have to get into PE now or the door is shut forever.”

In response to this frequent question, I have often heard PE partners advise, “Become a rock star at what you do – whether as an investor or operating executive. That’s when a PE firm is most interested in making you a partner as you will have proven your business acumen. You’d likely have a high value network plus a large personal asset base. At the same time, you’d probably be able to start your own private equity firm with people in your own network.”

PE ain’t what it used to be. It looks like it’s time to move on.

What’s your view of the PE opportunity in this market? What alternative jobs and careers are you considering?