Bear Market

In recent years,the annual fall career forum at the Gordon Track and Tennis Center has been one of the most conspicuous displays of the many employment opportunities in finance and technology fields open to undergraduates. Consulting firms and investment-banking companies battled for coveted table spots. Scores of fresh-faced recruiters, mostly recent graduates and living testaments to the possibility of lucrative futures, rushed to shake hands, pass out logo-enhanced freebies, and even exchange pleasantries with the lowest job-hunters on the totem pole: sophomores. The hustle and bustle—and fast-spreading rumors about goodies ranging from Mickey-eared pencils handed out by Disney to posh CD cases from the Internet consulting firm marchFIRST—attracted more than 2,200 students each year, according to Office of Career Services (OCS) director William Wright-Swadel. At its height, the forum was impressive and inspiring: walking through the labyrinth of eager employers, even those undergraduates indifferent to finance—myself included—were easily enticed. After signing up on e-mail lists and chatting with a few companies about internships or jobs, many left wondering whether they might not be interested in consulting after all.

OCS presided over this frenzied courtship like a happy matchmaker, bringing both parties—each more eager than the other—to the bargaining table. In 2000, 146 companies participated in the forum and nearly 40 filled a waiting list, while the number of firms participating in the on-campus recruiting program more than doubled in the last seven years to about 450 in 2001. The numbers of students flocking to the recruitment program, which is dominated by finance and technology enterprises, rose steadily as well: about 800 seniors, or half of the class, and 850 underclassmen participated in the 2000-2001 recruiting season.

"I-banks and consulting have traditionally been the industries that recruit aggressively," says Wright-Swadel. "The opportunities are good, and students here like the competitive, high-pay, high learning-curve, terminal environment": the opportunity to work in consulting or investment banking for a couple of years before pursuing graduate or professional school. All in all, the potential for forming happy and productive partnerships seemed limitless.

This year proved a different story. Last spring's economic downturn parched the labor market, especially in the finance and technology sectors. By the time it developed into a recession that sent the unemployment rate up to 5.6 percent, many of the companies that had so insistently flirted with students just a year before were nowhere to be seen. The 2001 fall forum shrank to 130 companies with no waiting list, and the recruiting program to 300 companies. Smaller companies like marchFIRST had recruited forcefully in 2000, but were forced to lay off hundreds of employees and close offices to cut corporate expenses in 2001. The bigger investment banks and consulting firms put in an appearance, but their ranks had thinned noticeably.

And so seniors—who had watched the enormous success of the classes ahead of them—entered the most competitive recruiting season in years. The job market was pinched even tighter because companies began scaling back almost immediately after signing members of the class of 2001 last spring.

"Last year, the senior class hit the beginning of the downturn in a big way," says Wright-Swadel, whose office stayed busy throughout the summer negotiating with companies who rescinded or delayed offers. "This year, the people who were pushed back a year are still there. Add to that the downturn in the economy, when companies are hiring fewer people, and that's a double whammy."

Make that a triple whammy. The market is even more constricted because companies prefer to make offers to their summer interns before beginning to recruit. Investment banks and consulting firms have begun to rely more and more on courting younger undergraduates whom they can train through internships and then hire after graduation. In this year's annual Harvard College Report, dean of Harvard College Harry R. Lewis wrote that many recruiters predict that up to 80 percent of the graduates they hire will come from the ranks of their own internship programs.

With students taking every opportunity to stay out of the harsh labor market, the yield from end-of-summer job offers to interns has been especially high this year. Nick Zeitlin, a senior applied math and economics concentrator who worked for Credit Suisse in Palo Alto last summer, says he's "not sure they hired people besides the summer interns. Out of 13 people in my summer group, 11 will be back full time."

Caught at a significant disadvantage in the job market, students this year shied away from using summer offers as leverage to garner more lucrative deals with competing companies—a common practice in the past. Rather than playing the field, they signed with their summer employers right away. "We saw co-workers who were hired a year or two ago, who were just a couple of years ahead of us, laid off because of over-capacity," says senior Peter Fleiss, who interned at Morgan Stanley in New York last summer. "I understood why some of my friends and co-workers wanted to take those jobs immediately."

Meanwhile, those who braved the market found the rules had changed. Employers were no longer anxious suitors: students who could expect to be competitive in the past, based on extracurriculars and academics, found this year's recruiters were emphasizing experience to a greater extent than before. The job hunters who have fared well so far in this year's process have largely been professionals—students who have been preparing for their careers with intensive summer internships, sometimes since the summer after their first year. Having spent most of their summers at 80- to 90-hour-a-week jobs, they are now seeing the payoff: they have been the few candidates able to demonstrate focus and commitment to increasingly picky employers.

Heightened emphasis on relevant summer experience has added to the growing pressure on students to begin job searches early in their undergraduate years. It's little wonder that more and more undergraduates are participating in the recruiting program for competitive summer internships: missing out on a lucrative position this year can seriously handicap a future job search.

Zeitlin, who says that his summer job at Credit Suisse made him a standout candidate in this year's especially competitive season and helped him land a coveted spot at McKinsey, knows of few seniors who received offers without having a summer job under their belts. "I know people who are super-qualified who didn't get any offers. They have good grades, Group I, extracurriculars, I imagine they have great interview skills," he says. "Without a doubt, this is the toughest it's been in the past few years."


But some—both at OCS and in the senior class—see the difficult market as a blessing in disguise. Out of necessity, students are reentering the job scene and exploring less lucrative, but more satisfying, career options. "To some extent, the economy frees people to look beyond [jobs in finance]," says Dena Rakoff, a career counselor at OCS. When consulting and investment banking firms began pulling out of the career forum, Wright-Swadel says that OCS seized the chance to diversify the crowd: "We invited other kinds of companies, more nonprofit organizations and international organizations. Frankly, we've indicated to some companies that this is a good year to come to Harvard because I-banking and consulting recruiting is down."

Both Wright-Swadel and students point out that the tight market discourages automatic participation in the recruiting process by students who might have gone into consulting or finance by default in previous years. "I call it the lemming effect," says Wright-Swadel. "Students get in the recruiting program for consulting and I-banks and it's like a tide that carries them along. They see their roommates doing it, their blockmates doing it, their friends doing it. They figure it must be interesting."

But some of these hastily arranged matches go sour. OCS public-service counselor Gail Gilmore says that alumni who rushed into finance as seniors sometimes return to OCS after several years seeking to switch careers. Now that the tight market has made recruiting a riskier option, more students have been considering other avenues before hastily plunging into—and possibly regretting—finance jobs. "I felt almost compelled to do recruiting," says senior economics concentrator Angela Y. Lin, who worked in consulting last summer and, despite a mixed experience, entered the recruiting process last fall because she felt it was expected of her. "Too many people blindly walk down that path, and few step back and evaluate what it is that's important to them."

Senior Raquel Lachman points out that many students, confronted with a tough job market in consulting, have chosen "the next best thing" and applied to law schools—reflecting a nationwide trend that has seen applications overall rise 25 percent since last year, according to the Law School Admissions Council. Wright-Swadel says he expects to see about 33 to 35 percent of seniors apply directly to graduate or professional schools, up from 25 percent in previous years. (At Harvard, where last year's senior survey indicated that nearly 80 percent of the class eventually planned to attend graduate or professional school, many are skipping a couple of years in the workforce and applying straight from college to avoid the tough market.)

Other seniors have followed national trends and turned to public-service programs. Gilmore says more seniors have approached her in the past several months, saying they are interested in taking a year off for community-service projects at home and abroad. "It may be the perception that jobs may be difficult to come by right now, but this year, instead of making a mistake, students are a little more willing to say, 'To heck with these expectations of my Harvard degree and what I should do with it, I'll do what makes me happy,'" Gilmore says. "They're hoping that at the end of one year, they will have had the opportunity to develop interesting skills they can use for a variety of career opportunities. They may also be thinking that the economy will climb out of its hole by then."

Interest in teaching abroad has also risen, according to Dena Rakoff, who has seen a 25 percent increase in the number of seniors contacting her about the Harvard Overseas School Teaching (HOST) program, which places graduates in international schools around the world for a year. In fact, Rakoff says this year's applicant pool is the largest in the five years that she's overseen the application process, and that interest in domestic programs, such as Teach for America, has also grown.

When Angela Lin did not advance past second-round interviews in the recruiting process last fall, she felt partly relieved, knowing that she could follow her interest in education without wondering what might have been. "I've always had education in the back of my head, and it was kind of an excuse [to pursue it]. The companies made the choice for me," she says. She has applied to HOST and to several other teach-abroad programs.

Lin says the difficult market has proved an eye-opener to many seniors—especially economics concentrators who tend to participate overwhelmingly in the recruiting process—who are choosing to seek the road less traveled. "Harvard students do a million things while they're here, so why sign away your life doing the same thing for 80 hours a week?" she says. "So many people are looking into Teach for America or the Peace Corps, which aren't lucrative, but where talented and intelligent people are needed. Being an economics major, it's refreshing to see people looking into different things."       

Berta Greenwald Ledecky Undergraduate Fellow Eugenia V. Levenson is a history and literature concentrator without a lucrative summer internship—but she refuses to believe that's a bad thing.

Read more articles by: Eugenia V. Levenson
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