School of Business > UPDATE > Summer 2002 > Article

New Grads Face Tough Economy
Prospects for Fall May Be Better

Business Week called it "the toughest hiring environment of any since the mid-1990s." Throughout the country, graduates of the Class of 2002 encountered much more uncertain job prospects than in recent years when the economy was booming.

The difficulties affected schools throughout the country, with master's students finding the most difficulties and facing the greatest disappointment. The president of the MBA Career Services Council, Melvin L. Penn III, told the Chronicle of Higher Education, "This year's graduating students entered their MBA program in the strongest job market in 40 years, and they'll be graduating in arguably the weakest job market in 30 years. They're asking themselves what happened."

Karen Stauffacher, assistant dean and director of the Business Career Center, said overall the job market for this year's Wisconsin graduates, as difficult as it was, still was better than at many other business schools. In 2001, one of the biggest problems career services offices faced was companies making offers to students and then rescinding them as the economy weakened. That's happened less this year. Learning from last year, companies were more cautious and waited until later in the school year to make offers to new grads, when they knew jobs would indeed be available.

For UW-Madison business undergraduates, despite the national economic picture, placement news was fairly steady. The average base starting salary was $39,659, a 3 percent decrease from the previous year.

Master's graduates also faced a 3 percent decrease in mean base starting salary from the previous year, $68,833. More disturbing was the decline in the percentage of graduate students with job offers in hand by graduation compared to previous years. Among graduate students, 41 percent were still seeking positions at graduation, compared to 17 percent the previous year.

For both undergraduate and graduate students, signing bonuses were less common and the amounts offered were lower this year. Among undergraduates, the signing bonuses averaged $3,224—an 11 percent decrease. Among MBA and MS graduates, the average signing bonus was $11,989—a 7 percent decrease from the previous year.

Overall, the number of employers recruiting on campus for School of Business students this school year declined about 30 percent, close to the national average, according to the National Association of Colleges and Employers.

Finding employment has been particularly difficult for international students, according to Stauffacher. "After 9/11, and with the decline in the technology sector, employers have been less inclined to apply for H1B visas that would allow international students to obtain jobs with them in the U.S." The Graduate Programs Office added a full-time staff position to work advising and helping place international students due to the challenges facing international students in finding employment in both the United States and in their home countries.

In light of the tough employment situation, Stauffacher said the Business Career Center has pursued several avenues in hopes of increasing the number of job offers. (She also urged alumni to contact the BCC with current job openings in their organizations. See below for details.)

For example, the BCC has waived fees to employers for accessing student resumes and conducting videoconference interviews. Recent graduates still seeking employment have been extended full access to BCC services and job postings through the upcoming fall semester. The BCC has also made changes to its resource center to allow more convenient use of technology by students (see page 27). In addition, School of Business staff members have made a variety of one-on-one employer development efforts with top employers throughout the country. For example, this spring Amy Bina, an assistant director for undergraduate career development, traveled to New York City to meet with Wall Street investment banks and discuss job possibilities for Wisconsin graduates. UW alumni in finance were "extremely helpful in letting us get a foot in the door and we've received many good leads as a result of these visits," Stauffacher said.

As fall approached and the national economy appeared to begin to rebound, Stauffacher was expecting hiring to pick up. "We mirror exactly what's happening in the economy," she said. "At this point, employers are cautiously optimistic about their hiring prospects for next year's graduates."