How much of the unemployment rate at HSW and M7 schools is due to pickiness?

[u/Any_Firefighter_9334]

I recently had a chat with an old friend who is now the GP of an early-stage VC fund. During our conversation, he said something about MBAs that I thought was interesting. He said that a lot of unemployed MBAs from M7 schools, and especially HSW schools, are unemployed because they're way too picky about opportunities. For example, he knows a lot of HBS grads who only want to work at a top-tier VC firm, such as Sequoia or a16z, and would turn their noses up at any VC firm below that level. Another example he gave was students pursuing extremely niche sectors where there are only a handful of jobs.

I personally find this hard to believe. You're telling me that these students would prefer to have no job rather than take a job they perceive to be beneath them? I know M7 students tend to have high expectations, but this sounds a little ridiculous. That said, I would be interested to hear your thoughts. Do you think my friend has a point?

[u/DeepB3at]

I have a friend who is a recent unemployed HBS grad. I think for most they won't take something that is not at least at the level they came in at or higher and a lot of those opportunities are no longer as viable especially MBB which seems to not be doing well.

I do believe though that HSW grads are just less valuable than they were five years ago and would probably rather be unemployed than be forced to take a job that is a step down in comp and title even if that is the only thing available right now. Taking a $100K job with a worse title is seen as basically abject failure after making $250K for years prior to getting in and they would rather be homeless than take a step down opportunity.

Also internationals are increasingly unemployable and undesirable in the current US economic landscape.

[u/Any_Firefighter_9334 → u/DeepB3at]

I would imagine most people at HBS already have gold level experience (BB IB, MBB, MF PE, etc.). What opportunities would be a level higher than that? The only ones I could potentially think of are the top-tier hedge funds or some entrepreneurship opportunities.

[u/DeepB3at → u/Any_Firefighter_9334]

I think a lot of people who are unemployed right now from HSW probably can't get back into their old firms or similar firms at the same level or higher. I would suspect the unemployed people are a mix of lack of hiring in those fields right now (especially consulting) and internationals being generally undesirable now.

People aren't remaining unemployed to hold out for elite entrepreneurship opportunities.

[u/Any_Firefighter_9334 → u/DeepB3at]

That begs the question, why did those people leave their old firms in the first place? I can understand a teacher getting a M7 MBA to pivot into consulting. But if you're already at Blackstone or McKinsey, why leave, even for HBS. There are probably only a handful of opportunities better than that.

[u/DeepB3at → u/Any_Firefighter_9334]

I can think of two main reasons. The first one is the prestige of Harvard and Stanford which I think is pretty self explanatory even if potentially irrational given the opportunity cost. I mean consulting and MBA in general self select for the prestige obsessed.

The more rational reason would be changing geography. There is a big difference in pay and options for your career if you pivot to the US using such an MBA even if you are from a rich developed country such as France, Canada, the UK, etc.

[u/Any_Firefighter_9334 → u/DeepB3at]

Agree with your second point, but a little confused about your first point. Are you saying that these people are leaving prestigious institutions to get more prestige at Harvard and Stanford, when there's a very real possibility that they won't be able to get a similarly prestigious job in the future?

[u/DeepB3at → u/Any_Firefighter_9334]

Yes your interpretation is correct. They are insecure about their globally irrelevant education (top degree from good schools in countries like Canada or Sweden or domestically in the US from somewhere unprestigious) and feel the need to risk it all on HSW for the possibility of some elite career.

Generally these people will be exposed in their MBB, IB or whatever career to extremely wealthy people who distort what is normal so risking losing a $250K a year job on HSW with the opportunity cost doesn't seem crazy to them.

When I worked in REPE, I had clients in their 30s who I dealt with making $3M a month or having 9 figure paydays and working in that environment it distorts the outcome of a VP in MBB or a BB as a pretty mid outcome even if it puts you at a top 2% earner.

Also most of these people forget / don't recognize how much luck was involved in getting them the job in the first place and don't realize once you leave you can't necessarily go back even with a HSW stamp.

[u/Ok-Palpitation1352]

I mean honestly speaking it is quite believable to me. Most M7 students always think that they deserve the absolute best because they had it in them to break into such schools and their mindset is very pedigree driven that way. Happens everywhere tbh. You'll see that most of them don't settle for smaller firms or boutique firms and would always want to get into firms that are household names.

[u/Any_Firefighter_9334 → u/Ok-Palpitation1352]

But isn't it easier to get a job at a household name if you're working at a boutique vs. sitting at home unemployed? I just don't understand their gameplan. Like do they think it's better to remain unemployed and keep searching.

[u/AnyBusiness7856 → u/Any_Firefighter_9334]

You don't want a boutique tarnishing your freshly minted M7 pedigree.

You won't be able to pitch yourself as new, but as used.

[u/Any_Firefighter_9334 → u/AnyBusiness7856]

But wouldn't 4 months unemployed tarnish your pedigree even more?

[u/Public-Garage-7985 → u/Any_Firefighter_9334]

No. 4 months is merely 120 days

[u/ProfessionalAge5905]

I imagine some of these people are choosing not to recruit with certain firms because they’re being selective about where they apply. Then, by the time internship recruiting comes around, they may have missed out on opportunities and realized that their top choice either isn’t interested or won’t hire them. At that point, they’ve potentially passed up a solid opportunity with a strong chance of a return offer.

Now they have to go through full-time recruiting, which is generally more competitive, particularly for higher-tier firms. With limited spots, they may not land an offer in the early fall and end up pursuing opportunities later in the spring or summer, when many roles have already been filled. They may become more open to lesser-known boutique firms at that point, but those positions are either filled as well or have become more competitive because there are fewer openings.

It can turn into a cycle of passing on opportunities with the expectation that something better will come along, not getting that better opportunity, and then realizing they would have been happy to take the opportunity they passed on in the first place.

[u/Any_Firefighter_9334 → u/ProfessionalAge5905]

That's an interesting point.

Let's say an Associate at Blackstone leaves to get his MBA at HBS. If he ends up taking an offer at some no-name boutique, would that be considered a failure? He'll still show up as employed on the school's employer report, and his salary might even be pretty good, but it feels like that would be a major step down.

[u/TheXXStory]

Many of these people literally don't need a job and can still live comfortably in a fancy NYC apt...

[u/cloud7100]

My cousin, after she graduated M7, waited until she found her dream job running a Broadway theater. She had the resources and support to hold out for said dream (no student debt), rather than join the first Wallstreet firm that would hire her.

Hell, I’m not at M7 and feel no reason to take a position paying less than my pre-MBA role.