Last year started off with a bang. Layoffs were abundant and MBAs may have been dusting off their CVs. Citigroup announced 11,000 job cuts and Morgan Stanley 1,600, or 3 per cent of its staff.
Barclays Capital announced that it would cut 3,700 jobs and, a little closer to home for U.S schools, Goldman Sachs said it would reduce its headcount by 5 per cent. Push a little closer to the financial crisis and the figures get worse. Since 2011, Bank of America cut nearly 18,000 employees through to September 2012.
A week ago, business schools were brainstorming ways to ramp-up their European financial recruiting efforts. Last year, demand for MBAs among the top financial services firms dropped 8 per cent in some regions of Europe.
But there is also evidence in the States that the value of an MBA degree is declining. While MBAs degrees are still required for certain jobs, some companies have begun to hire undergraduates who are willing to work for considerably less than business school grads.
Some observers, however, are more optimistic. “We continue to see demand for MBAs among financial services clients,” says Bill Driscoll, President of the New England District at Robert Half International.
The company has pioneered the concept of professional staffing services and has been in business since 1948. They pass scores of MBAs through their system each year.
“Companies have commonly sought MBAs for their corporate finance departments to serve in senior-level accounting and finance positions," he continues, adding: "Finance organizations seek MBAs who have previous experience and can fill positions with data analysis, budgeting, forecasting, modelling and FP&A responsibilities.”
Robert Half reported revenues of 4.11 billion in 2012, versus $7 million in 1986, with 2012 net income of $209.9 million. The company has seven professional staffing services divisions, including Robert Half Finance & Accounting and Robert Half Management Resources.
Though banks still hire plenty of MBAs, the numbers are shrinking in investment banking. The University of Chicago Booth School of Business, a top-ranking U.S school, sent just 35 per cent of its class into finance, down from 43.2 per cent last year.
The Wall Street Journal also reports that there has recently been a significant increase in job opportunities for undergraduates in financial services, the traditional bastion of finance-focused MBAs.
According to the latest recruiting trends report from Michigan State University's Collegiate Employment Research Institute, employers forecast a 7 per cent increase in undergraduate hiring for the class graduating in 2014, buoyed by gains in professional services and manufacturing.
In a more far-flung assessment, financial services respondents to that survey also said they expect to cut jobs for graduate business students by up to 58 per cent this year, although this is dismissed by many.
But Bill says that the industry can’t satisfy its hiring needs. “Companies in essentially any industry looking for MBAs with experience in corporate finance, budgeting and forecasting simply can’t find these professionals,” he tells BusinessBecause.
“The recruiting challenges are severe and the competition for these candidates intense. Professionals with an MBA, in-demand technical expertise and outstanding soft skills can quickly secure three or four employment offers if they choose to enter the job market.”
Bill joined Robert Half in 1992 and worked his way up the ranks, eventually becoming a regional president of New England, a position he has held for the past eight years.
Robert Half is listed on the NYSE and is a member of the S&P 500, operating in hundreds of locations world-wide.
“The experience professionals bring to an employer on top of their MBA can be the determinant in how strong their job prospects are,” he says, before explaining that the job market is bright for MBAs with experience, although challenging for MBAs without it.
“Though demand persists, particularly among corporate finance departments and companies with corporate leadership development programs.”
Employment stats would seemingly contradict Bill’s view. But he points out that financial rewards for MBAs can be enormous. Starting salaries for accounting and finance professionals with a professional certification or advanced degree, such as an MBA, can be up to 10 per cent above the market average, according to the 2014 Salary Guide from Robert Half.
The initial decline in hiring around the financial crisis was expected to hurt business school hiring trends, but that levelled out before dipping slightly again.
Banks still want the brightest graduates, and Bill says they place MBAs with clients in strategic planning, data analytics, budgeting, forecasting, modelling, and financial planning and analysis positions.
Even investment banking looks bright. “Within investment banking, institutions both on the buy side and the sell side seek MBAs who can take on research and analytics roles,” he says.
The limited employment numbers in financial services is frustrating some business schools. But even if numbers have dropped, many believe it will not deter U.S MBAs as much as it has done in Europe.
“It’s not just experience and technical expertise employers seek. They also look for professionals with outstanding non-technical or soft skills,” says Bill. “Companies need staff who are leaders, excellent communicators, and [are] able to align their business unit’s goals with the firm’s big-picture objectives.”
Some banks have cut back hiring on campus. But Bill believes MBAs from top schools are still snapped up at universities' doors, while others with a strong track record pre-MBA still receive multiple offers.
Robert Half still places plenty of MBAs into consultancy roles. And for finance, Bill remains similarly confident. MBAs can expect greater opportunities within a few years of employment, he adds.
“Individuals who gained experience and then an MBA quickly become in demand, and will be strong candidates to move to opportunities of greater responsibility and prestige.”
He continues: “Professionals’ business analytics expertise and ability to manipulate data can be their trump card. These skills often override all other attributes employers seek when hiring.”