A recent report noted that 23% of MBA graduates from Harvard Business School remained unemployed in 2024 even after three months of graduation. Similar numbers were noted at other Ivy League colleges like Stanford Graduate School and Wharton School. What is the reason behind these unemployment struggles?
In Short
- MBA graduates from Ivy League colleges face trouble landing jobs
- MBA hiring slowdown in tech and consulting sectors a main cause
- New hiring trends shift focus from degrees to skills
While India has been facing skill development issues for a long, this isn’t a problem limited to our country. Recent MBA graduates have been struggling to get jobs even in the US — and that too, when holding degrees from Ivy League colleges like Harvard, Stanford and Wharton, notes a recent Wall Street Journal (WSJ) report.
The report notes that 23% of the MBA graduates from Harvard Business School’s (HBS) spring 2024 batch had failed to get jobs even after three months of graduation. In 2022, the number stood at 10%, while in 2023, it grew to 20%.
The International Labor Organisation’s ‘Global Employment Trends for Youth 2024’ notes that 13% of the young labour force remained unemployed in 2023, equivalent to 64.9 million people.
As per the World Economic Forum report of 2020, only one in four management professionals were employable, and the situation hasn’t improved much since then.
OTHER B-SCHOOLS ALSO FACE MBA EMPLOYMENT STRUGGLES
Apart from Harvard, other top-tier B-schools like Wharton (20%), Stanford (22%), and New York University’s Stern School of Business are facing similar problems with dropping placement figures among their fresh graduates.
This shows that even students of the most elite institutes across the world are unable to escape the economic slowdown and other issues plaguing the white-collar job industry. MBA graduates are having a hard time getting jobs even in other prestigious US institutes. The number of unemployed graduates has tripled in the University of Chicago’s Booth School and Northwestern University’s Kellogg School of Management. Even after three months of graduation, 13% of Kellogg’s MBA students were yet to get jobs.
WHAT SEEMS TO BE THE PROBLEM?
Despite the unemployment issue, MBA grads from top institutes are still in line for high earnings — median starting salaries are often higher than $175,000. So, why aren’t they getting hired?
As per WSJ, one of the main problems is that we are looking at fewer job opportunities in the tech and consulting fields.The year 2023 saw large-scale job cuts. Top tech companies like Google, Microsoft, Amazon and consulting giants such as McKinsey and BCG have now reduced their MBA hires to a great extent.It is also no secret that post-pandemic working structures have undergone a sea change in many companies, which are now looking at smaller and more efficient teams. Also, the rise of AI and automation has changed things even further.
Companies have also been telling institutes that they won’t be coming to campus to hire any more, as per the WSJ report. This changing hiring strategy seems to be in line with Elon Musk’s moto-skills matter, not college degrees.
The preference now is for MBA grads who do not possess only generalist business knowledge but have a good hold over specific technical skills. This means traditional MBA programmes wouldn’t work any more — MBA education would need to level up to cater to the current needs of the job market.
Boot camps and targeted certifications for more specialised skills seem to be new favourites among top companies.
WSJ also reported how even those MBA graduates who manage to secure jobs face delays and changes in their career plans. Starting dates being pushed back amid mounting student loan pressures seem to be common stories.
As per Harvard’s Kristen Fitzpatrick, the situation likely won’t change anytime soon. Institutes are now trying to look for alternate and innovative solutions.
An AI tool is being tested at Harvard that matches jobseekers with job roles, and also recommends what courses may be needed to bridge any existing skill gaps.
Moreover, the MBA graduates who have lowered their expectations have managed to land jobs, as per a Forbes report.
Whatever seems to be causing this setback in MBA hiring, one thing is clear — skills now trump degrees. MBA education needs to evolve rapidly and job-seekers need to upskill regularly to keep up with the changing requirements of the job market.
The overseer of career development and alumni relations at HBS told the Wall Street Journal that they weren’t “immune to the difficulties of the job market”.
Interestingly, Kristen Fitzpatrick also noted that aspiring employees simply need to have the right skills. “Going to Harvard is not going to be a differentiator,” she said.
