New graduates entering the job market will face a very different landscape from even a year ago, with a murky economy and potentially more limited career prospects.
Though unemployment figures in the US remain near historically low levels, the pace of hiring in April slowed, according to the Bureau of Labor Statistics. US employers added 175,000 jobs, seasonally adjusted, far fewer than the more than 300,000 in March and below the 240,000 analysts expected.
For those seeking business careers, success might mean searching beyond traditional first jobs like consulting or large firms. Slowdowns can be the best time to explore an unexpected path, professionally or geographically.
Harvard Business School faculty share their viewpoints on the ever-changing job market, with a sharp eye on what it means for corporate careers from consulting to private equity.
Paul Gompers: All it takes is one ‘yes’
The venture capital and startup job market is particularly slow this year. I am reaching into my network more than in prior years to put students in touch with people in the industry.
Down rounds and layoffs in tech have been in the headlines for the past 18 months as startups adjust to the need to get to breakeven and to deal with unreasonable valuation expectations of the last several years.
That being said, my research and research by others has shown that venture capital and startup market slowdowns are opportune times to enter the industry.
“Prospects are likely to improve over the short run and perseverance is rewarded.”
Returns and attractive exits are higher for startups formed during these periods in history. Overall, I emphasize that students need to be patient.
Good jobs are out there to be had. All it takes is one yes.
My own view is that the public markets and venture capital fundraising markets are slowly improving. Prospects are likely to improve over the short run and perseverance is rewarded.
Paul Gompers is the Eugune Holman Professor of Business Administration at HBS.
David Fubini: Brace for tough conditions
There’s no sugarcoating it: students looking to start careers in consulting are facing some of the toughest market conditions we’ve seen since 2007 and 2008. Just a few years ago, as a derivative of the COVID-19 pandemic, firms experienced a dramatic and sudden increase in demand, which led to a sharp increase in hiring. Contrary to many firms’ expectations, things soon settled back down, and project volumes decreased.
At the same time, adjacent industries like tech, venture capital and private equity also experienced slowdowns, which meant fewer consultants left their firms for other tech and PE/VC opportunities. As many recent grads have come to learn firsthand, firms have not only slashed hiring overall, but also pushed back start dates for those who have been hired.
They have also adopted a stance of “firm first” rather than “accommodating” when dealing with new consultants as they work to, in their view, get supply in balance with demand.
“When openings are so scarce, remember that there are a huge array of consulting firms with different strengths and specialties.”
Given these challenges, students hoping to go into consulting need to fundamentally rethink their approach along three dimensions:
Broaden your search. Too often, MBA students concentrate their efforts on the large strategic consulting firms such as McKinsey, Bain, and BCG. This approach severely limits opportunities. When openings are so scarce, remember that there are a huge array of consulting firms with different strengths and specialties. Some are industry- or function-specific in focus, while other firms concentrate on small or family businesses, the public sector, and even private equity. By limiting your focus to the major strategic firms, you will significantly decrease the probability of your success.
Focus on your unique strengths. You must focus your search based on your personal value proposition: What is it that you’re uniquely able to contribute? In periods of oversupply, personal intelligence, drive, and leadership qualities alone will not attract an array of offers. Firms are looking for associates they know they can easily deploy with experience that suits client needs.
In this increasingly complex world, there is no shortage of client demands for digital transformation, emerging artificial intelligence (AI) applications, renewable energy, risk mitigation, pricing/yield management, climate change, and supply-chain realignment, to name but a few. As an applicant, you need to be able to articulate how your background and experience will help the firms fulfill specific client needs.
Be flexible. You’re going to have to show a willingness to accept different roles, geographies, and work-life balance demands. In the past, advisory firms increasingly accommodated applicants’ personal circumstances in a drive to “win the war for talent.” Today, this is, unfortunately, not as critical.
A desire to relocate geographically for personal reasons or to work at a pace and in a manner that benefits your personal situation will create barriers at a time when many firms are actively seeking to trim their workforce. Flexibility and willingness to be available for opportunities as they arise will be a differentiator given the few offers they will be making.
David G. Fubini is a senior lecturer at Harvard Business School and a former senior partner at McKinsey.
Letian Zhang: Collaborative skills are increasingly important
The labor market is changing in a lot of ways. Some of my recent work looks at changing skill requirements from employers. In this paper, for example, I find that the role expectation for managers has shifted. Instead of expecting managers to supervise and command, employers increasingly expect managers to play the role of collaborator. This is consistent with other findings that social and collaborative skills are becoming increasingly relevant in today’s labor market.
Despite shifts in the job market, some considerations remain constant:
Analytical and technical skills are still important. In other research, I find that more employers are looking for what I call foundational skills. These not only include social skills, but also analytical thinking and math. One possible reason for this is that the types of skills needed are constantly evolving, so many employers prefer workers with a strong foundation in a variety of skills. This allows them to learn quickly and adapt to whatever new skills are required of them.
Country and context matter. Another of my recent papers shows that employers’ skill expectations vary significantly from country to country. For example, not every country places the same value on basic skills. We show that a country’s level of trust can shape the types of skills employers seek.
In higher-trust societies, employers are more willing to make long-term investments in their employees and place a higher value on candidates’ foundational skills. In lower-trust societies, however, employers perceive the employer-employee relationship as more of a short-term transaction and prefer to select candidates who already have the relevant skills to hit the ground running.
Letian (LT) Zhang is an Assistant Professor of Business Administration in the Organizational Behavior Unit at HBS.
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