The novel coronavirus disrupted not only campus life but also the job market at B-schools. The global crisis had gnawed its teeth at several Business schools. Some companies had frozen their recruitment plans. A few companies had either deferred or rescinded job offers that they had previously extended to graduates.
The pandemic had impacted job offers and acceptances at the world’s number one B-School – Harvard Business School. The current year’s job report of HBS comes almost six months behind schedule.
Meager improvements in pay
The HBS graduates recorded a new high in median pay. The total median compensation this year reached $173,500 at Harvard. The sum sign-on bonuses and other guaranteed first-year compensation showed an increase of less than a percent over last year’s $172,090.
The pandemic had impinged on the employment rate too. Almost twenty percent of the graduates had not secured jobs three months after graduation. Of the ninety percent who had obtained job offers (down four percentage points from last year), only eighty-three percent of the graduates had accepted their offers (down five percentage points from last year).
Sixty percent of Harvard graduates earned a compensation of $150,000, with a signing bonus of $30,000 as starting pay. Eleven percent of the class procured median and other guaranteed compensation of $50,000.
Medial remunerations increased slightly from $148,750 last year while signing bonuses remained static at $30,000. But only fifty-seven percent had obtained the same last year.
The guaranteed compensation fell from $52,000, a median sum procured by twelve percent of the Class of 2019. Total median pay includes base salary, sign-on bonus, and other guaranteed compensation, adjusted for the percentages of graduates receiving a signing bonus and other guaranteed pay.
- Seven percent of HBS graduates chose hedge funds and investment management jobs. The total median compensation at the top end for HBS graduates this year amounted to $203,307.
- Fifty-four percent of this year’s Harvard class earned a median total compensation of $152,682 and sign-on bonuses of $27,500.
- Twenty-seven percent of the class received a guaranteed compensation of $132,500.
The highest and lowest slabs
This year the highest 75th percentile bases or the highest quarter of salaries listed were:
- $200,000 in private equity and venture capital
- $182,500 in energy
- $175,000 in hedge funds/investment management, highly diversified manufacturing.
The lowest 25th percentile base salaries of $100,000 were in government and non-profits.
Shift in sectors
The salary offers the graduates receive and accept indicate the career path as well as the job location.
Although the percentage of HBS graduates choosing hedge funds for their careers nearly doubled from four percent of last year, the total compensation for the year’s hedge fund bunch slipped from last year’s $211,350.
Consulting has been the Harvard graduate’s preference in sectors this year. HBS graduates who chose McKinsey, Bain, BCG, and other consulting firms have earned a total median pay of $195,336.
Ninety-five percent of those who went to consulting have received a package with a starting salary of $165,000 and a $30,000 signing bonus. Nine percent of the graduates also had other guaranteed compensation of $20,400.
Graduates who chose Consulting had bettered last year’s total pay of $194,880. The group that chose Consulting had beaten others who had chosen private equity, venture capital, and buyout firms.
One out of three graduates had procured total pay of $186,609, $160,000 in starting salary, and $25,000 as a sign-on bonus. Sixteen percent had bagged $111,500 as guaranteed compensation for the first year.
The current year’s PE/VC (Private Equity/Venture Capital) total pay numbers dropped for hedge funds from last year’s $194,000 in total median compensation.
Why the shift in sectors?
The current pandemic accounts for the 2020 graduates’ preferences in their career streams. With the job options tapering in the market, graduates have gone for safer bets like financial services and consulting. The two sectors have accounted for fifty-eight percent of career choices in the HBS class of 2020.
Thirty-four percent of the class have signed for financial services, up by five full percentage points from twenty-nine percent of the Class of 2019 that had opted for financial services.
Twenty-four percent of HBS graduates this year have accepted job offers from Consulting, up three percentage points over the twenty-one percent who joined Consulting last year.
But the nineteen percent of graduates who have accepted offers from Technology is a slip of one percent from last year’s batch, though median starting salaries increased by $5,000 to $140,000.
Graduates accepted job offers in financial services in a range of sections:
- twenty-two percent – PE/VC and buyout firms – up from twenty percent from last year
- seven percent – hedge funds and investment management firms, double the figures from last year
- three percent – investment banking, down from four percent last year
Harvard Business School has not had it easier than other B-schools in its job placement offers and acceptances.
While the COVID-19 pandemic has impacted salary offers from organizations that were cautious in their offers, graduates have leaned towards safer zones in choosing their careers. Consulting and finance have remained favorites of MBA graduates at HBS.
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