By Andy Smith
Journal Staff Writer
Kuo Shirley Hsin Ling, left, and Yu Kyung Hwanbo, MBA students at Johnson & Wales University, help register students at an information session last week. At right, Prof. Thomas Rossi discusses the program.
The Providence Journal / Connie Grosch
When times are tough, MBA programs become more popular.
That might seem odd, particularly when New York City’s comptroller is predicting 35,000 lost financial jobs in his city, the business center of the country. But experts say MBA (master of business administration) programs operate in a “countercyclical” fashion, meaning they move in the opposite direction from the economy.
The phenomenon has held true during past financial downturns, and even though the current turmoil in the financial world is only weeks old, observers in Rhode Island and around the country said it looks like it’s happening once again. On Oct. 14, The Wall Street Journal headlined an article “Escape Route: Seeking Refuge in an MBA Programs.”
Area college administrators say it’s too early to have any hard numbers, since the current crop of MBA students began classes recently, and recruiting is still in the very preliminary stages for next year’s students. But they said indications are that interest in MBA programs, particularly the full-time programs, is on the rise. In Rhode Island, which has been facing economic problems for some time now, MBA enrollments have already gone up from last year to this year.
Mark Higgins, dean of the College of Business Administration at the University of Rhode Island, said he’s noticed more interest in the school’s full-time MBA program, which has 26 students. Higgins said students in the full-time MBA program increased from 17 last year to 26 this year. In the part-time program, enrollment increased from 153 last fall to 165 this fall.
Susan Lehrman, dean of the business school at Providence College, with about 150 students in its MBA program, said enrollment went from 125 last year to about 150 this year. PC is seeing a lot of interest in next year’s MBA classes, she said, but it’s too early to project any numbers.
At Johnson & Wales University, Frank Pontarelli, dean of the Alan Shawn Feinstein Graduate School, said the school had 770 students enrolled as of last spring. This fall, there are about 877 students in the MBA program, 712 full-time and 165 part-time. Pontarelli said about 60 percent of the Johnson & Wales students are from abroad, with contingents from India, Turkey and China. But he said that figure is down from 65 percent, and that Johnson & Wales continues to see interest from students in the United States.
Tuesday night, Johnson & Wales held an information session for people considering entering the MBA program. “When the economy ramps down, that’s when you need to ramp up,” faculty member Thomas Rossi told potential MBA students. “Employees are being very selective right now.”
Among those at the information session was Jennifer L. Spagnole, already a CPA with the Providence firm of Kahn, Litwin, Renza & Co. “I want to remain competitive with my peers,” she said. A 1997 graduate of Providence College with a degree in accounting, Spagnole said a number of people in her company already have MBAs. “Firms are a lot more selective about who they hire and promote . . . I want to get to the next level in my career,” she said, adding that her company has a tuition reimbursement program to help pay for the program.
Also at the session was Elena Pavlova McKittrick, a recent immigrant from Russia who’s been in the United States for six months. A language teacher in Russia — she speaks Russian, English, Spanish and French — McKittrick said she can’t find a job in the United States with Russian credentials, leaving her with a decision to make. “I could have stayed with teaching, or started something new. And I decided to start something new,” she said. “Everything in the world is about economics.”
Lynne Sarikas, director of the MBA career center at Northeastern University, said she’s been getting four or five inquires a week about Northeastern’s MBA program, a number she normally gets in the spring, not the fall. She said the prospective students are asking a lot more questions about the school’s job placement and “corporate residency” programs, in which students spend six months working for a corporation, than they usually do at this stage of the game. “I fully expect we’ll see an increase in applications for next year,” she said.
There are several reasons for a surge of interest in an MBA degree when the economy looks dicey. Many people with jobs are looking to gain a competitive edge by acquiring new skills. Some people who have lost jobs, in the financial sector or elsewhere, see this as a good time to get a degree — and hope that the job market improves in the meantime. And for those just getting out of school, it’s tougher now to find jobs with an undergraduate degree, so many students seek to enhance their credentials with an MBA.
John Riley, 21, of Johnston, graduated from Providence College with an undergraduate degree in accounting in May, and is now getting an MBA from PC, while working as a graduate assistant in the school’s MBA department. Riley said he had job interviews after graduation, but didn’t find anything he really liked.
“I felt I needed more schooling,” he said. “I wanted to diversify myself, so I decided to get an MBA. I don’t want to be pigeonholed into accounting. I want to go into international business, because I feel the world is becoming more connected all the time.” Riley said diversification is a watchword among many of his friends. “You need to learn about a lot of different things.”
Riley said he’s not too worried about future job prospects: “Companies will still need to hire the smart and qualified students,” he said.
MBA program administrators in the state said they notice a difference between full-time programs and part-time programs. There’s stronger evidence of increased interest in the full-time programs, less so in the part-time programs.
Jack Trifts, dean of the College of Business at Bryant University, said part-time MBA students are typically already employed in the business world. In tough economic times, he said, their chief concern is not so much getting a new job as it is keeping the job they have. Even though about 75 percent of part-time MBA students get some tuition assistance from their employers, many are still left with some out-of-pocket expense.
Given the economy, Trifts said, some potential MBA students wonder whether this is the right time to devote the time, energy and money it would take to get the degree. Bryant has about 211 students in its MBA program, 187 of them part-time and 24 full-time.
At Northeastern University, Sarikas said she has not seen a drop-off in interest in the school’s part-time MBA programs, but she hasn’t seen a spike in inquiries.
As for the job outlook for MBA grads, Sarikas said the picture is still murky. “Nobody has a crystal ball,” she said. “The odds that the job market will be better in a year or two than it is now is a pretty good bet. Plus, you’ll have the benefit of an advanced degree.” Sarikas said finance is still a popular major at Northeastern, which has about 150 people in its full-time MBA program, but some students are switching their concentrations from investment finance, which involves managing stock portfolios, to corporate finance, which involves working within the finance departments of companies.
Sarikas said young MBA students tend to be naturally confident people. “They’re not cocky, but most of them are not losing sleep at night, either,” she said. “Actually, anxiety is not a bad thing. It gets them into our office sooner.”
Lehrman, of Providence College, said the economic turmoil is forcing students to take a broader approach to their education and job searches.
“I had a conversation with a finance major who couldn’t get a finance internship, but did get an internship with a tech company,” she said. “People are being more flexible. We try to graduate a very well-rounded student, with a broad exposure to all aspects of business. Versatility is what it’s all about in a down market.”
Business school administrators point out that the bailout plans and regulatory proposals being considered to deal with the current financial crisis might create jobs, both on the government and corporate sides of the equation. “Government will be a growth industry,” said URI’s Higgins.
Students in a strategic financial planning course at Johnson & Wales, many of whom already have jobs, said they were confident getting an MBA would help their careers. Craig Nardi, of Cumberland, a mortgage originator at Navigant Credit Union, said he had a gut feeling that changes were coming to the mortgage world. “The more classes I take, the more I realize I want to get into management,” Nardi said, adding that MBA training helps ensure that “you’re ready for anything.”
Of the students in the class, only one raised her hand when asked if anyone had aspirations to work on Wall Street. That was Krupalini Balasubramanya, 21, of India. “Right now, I figure that it’s a dream way out of reach. Better to think about getting into an industry before pursuing that. At some point, I would like to try Wall Street, but I would give it a solid 10 years first.”
