UNDERSTANDING POST-MBA CAREER OPPORTUNITIES
By Dominic Basulto
A quick look at the glossy brochures and slick websites
available for prospective MBA applicants may seem to indicate that a
1- or 2-year tour of duty at a leading Western business school is a
necessary and sufficient condition for a significant boost in one's
career. Each business school, whether in the Top 20 or the Top 100,
entices candidates with promises of international careers, cutting edge
job opportunities, and the unstated assumption that graduates will soon
be managing entire phalanxes of workers. Indeed, B-schools spend an
inordinate amount of time arranging a full array of corporate presentations,
coaching students on interviewing techniques, and assuring that each
student has full access to alumni databases and proprietary information
in order to make such promises realizable. However, there needs to be
a rational consideration of what different career paths are available
after earning an MBA degree, especially for Russian candidates who are
not completely aware of what a business school education entails.
What follows is some sobering advice on assessing
post-MBA career opportunities. Is earning the much-vaunted MBA degree
all about $100,000 job offers, General Manager titles and "corner
office" perks? In a word, no. First, Russian MBAs may not enjoy
as many job opportunities as nationals of Western Europe or the USA,
given the reduced need for staffing in Eastern Europe and Russia. Second,
the top strategy consultancies (McKinsey, BCG, Bain) and leading investment
banks (CSFB, Goldman Sachs) establish pre-determined hiring needs for
MBA graduates on a worldwide basis- and it is only these jobs that make
the $100,000 offers. Third, the notion of graduating from business school
and being hired as a "General Manager" of a major company
is ill founded. With a few exceptions, the major multinationals, investment
banks and consulting companies hire all candidates at the same level,
albeit with some salary considerations.
MYTH #1: RUSSIAN MBAs CAN CHOOSE TO WORK ANYWHERE IN THE
WEST.
In establishing career goals, it is important to determine
whether to focus on returning to Russia, working in a mature, developed
market (i.e. USA or Europe), or working in an emerging market. For most
Russian candidates, the "return to Russia" option is a non-starter,
meaning that the choice essentially becomes either USA or Europe, since
the world's emerging markets are currently at a nadir and even growth
opportunities in core-Asia (Japan, Hong Kong, etc.) are limited by the
extent of Asian economic weakness. Keep in mind that U.S. schools are
best at placing candidates with American firms, while European B-schools
are best at placing candidates in Europe. One can even extrapolate that
rapidly-emerging Russian business schools, such as AIBEc or IBE, are
best at placing students within Russia. In truth, there are only a handful
of Western countries that actively recruit MBAs: United States, U.K.,
France, Germany, Switzerland, and the Netherlands. Working in other
nations may be easier by attending a more "regional" school
such as IESE in Spain or SDA Bocconi in Italy.
Also bear in mind that Russian MBA candidates most
likely will be recruited to work in the Eastern European/Russian marketplace
rather than in "core Europe." Finding other job opportunities
not leveraging first-hand knowledge of the Russian marketplace is more
problematic. It takes additional perseverance to leverage additional
skills (clients in non-emerging markets, language fluency, etc.) in
order to avoid being pegged as a "future manager in Eastern Europe
or Russia." After all, even jobs not based in, say, Prague, will
involve consulting projects in the home country, doing market/strategy
analysis for "emerging Europe," or considering product launches
or manufacturing options in the Russian marketplace.
MYTH #2: ALL JOBS AFTER BUSINESS SCHOOL PAY $100,000 PER
YEAR.
The inflated salaries currently paid to graduates
of the leading business school programs can largely be attributed to
the overwhelming number of the top grads who opt for careers in finance
and consulting. Obviously, business schools can provide an important
change in one's career or provide a smooth transition to an emerging
career sector, such as high-tech venture capital. More probably, though,
business schools provide the conduit to the cash-rich job opportunities
in finance and consulting. Take a quick look at the placement statistics
of any top business school, and the truth becomes apparent: approximately
55-70% of all students select jobs in finance and consulting, meaning
that only 3 in 10 students choose jobs in the "real sector."
In fact, 48% of INSEAD's 1997 graduating class accepted offers in management
consulting and another 27% in finance. Furthermore, just in the past
five years, the number of INSEAD grads entering "industry"
has fallen from 50% to the current level of 25%. Once one sets foot
on campus, the reason for this becomes apparent: it is the old maxim
"follow the money." Consulting firms have upped the ante in
the recruiting wars, offering $100, 000 base salaries and a number of
bonus or tuition forgiveness options. However, the hiring frenzy for
consultants may have reached a peak. With the current Internet and "dot
com" mania gripping America and Western Europe, a new hot area
of career development has become the high-technology sector and leading
newspapers have already been discussing the evolution of the "techno
MBA."
Secondly, the hiring needs of companies may vary widely
depending on the economic environment. There is no guarantee that the
boom times can continue, especially if the unprecedented growth of the
US economy abates or the EU integration process stalls. Investment banks
burned by the emerging markets crises have already reduced hiring needs
after absorbing big hits to their capital base. Investing in MBAs is
an expensive option that leads to uncertain payoffs for many companies.
The perception that consulting companies and banks have priced most
MBAs out of reasonable range has meant that some multinationals and
manufacturing companies have chosen the route of developing their talent
base "in house." Those that choose to hire MBAs pay more in
the range of $55,000-$65,000 per annum rather than the oft-cited $100,000
figure.
MYTH #3: MBAs ARE HIRED AS TOP-RANKING GENERAL MANAGERS.
While an MBA is oftentimes a necessary precondition
for being accepted into the upper ranks of management, it is not true
that MBA grads are hired immediately into these positions. Instead,
companies provide generous training and career development opportunities
that provide a sufficient base for making a later "lateral"
move into senior positions in industry or the services sector. The usual
path from business school requires 4-8 years to make the move to "partner"
or "managing director." The promotion path may be more rapid
for an older, highly experienced candidate, but in general, the 25-year-old
whiz kid and the savvy 35 year-old will both inherit the same title
after B-school.
Also, the peculiarities of the Russian market may
have distorted realistic assumptions of young corporate professionals
in Moscow. Keep in mind that large American corporations and banks dwarf
their Russian counterparts, meaning that a freshly-minted graduate is
hired as a "future" leading manager, not as a current general
manager. The notion of rosy-cheeked 28-year olds running banks and offices
in Western Europe and America is, well, laughable. There are simply
many more layers of management between entry-level MBA positions and
the proverbial "top" in well-known Western firms. For instance,
the offices of the most prestigious investment banks staff thousands
of professionals worldwide; even with such mass, though, these leading
firms may only look to hire 30-50 MBAs on a global basis (i.e. New York,
London, Hong Kong).
In conclusion, it is worth reiterating that a careful
consideration of post-MBA career options is important. First, it allows
one to choose the appropriate school with proven placing power in certain
countries, regions, sectors, or industries. Second, it helps candidates
define their career plans and why exactly they are spending up to $80,000
on what is essentially a two-year job search. Third, it may dispel some
MBA myths and lead to a rationalization of many young professionals'
desires to attend business school. After all, in a classic case of "cognitive
dissonance," Russian professionals focus on the magic salary number
$100,000 and do not take into consideration that business school often
means long 12-hour days 7 days a week, relocation, visa & work permit
headaches, possible separation from family or spouses, and the acceptance
of a rigorous post-MBA career path that may include 100-hour weeks at
dog-eat-dog investment banks and rigid, "up-or-out" consulting
companies. For those still skeptical of these facts, additional insights
into post-MBA careers can also be found at some websites such as www.bschool.com,
www.mbaplaza.com, and www.wetfeet.com.
Dominic Basulto is a 1998 graduate of Yale School
of Management and currently works as a consultant for Pericles ABLE
(American Business and Legal Education) in Moscow. Pericles offers a
full MBA advising program.