Why does everyone leave their first MBA job so soon?

"200 students, 500 offers made with an average CTC of 30 lacs"

These are headlines that we read every year when premier B-schools in India come out with press releases about their performance in the placement season. It's a widely known fact that for young professionals, tier-1 MBA schools give access to some of the most sought-after jobs that our nation's economy has to offer.

However, what is less known is that, even though the salaries are high, job satisfaction is not that high in these jobs. You will be surprised to know that more than 50% of the students in my batch have already switched to new jobs, within 1 year of graduation, and talking to my friends, I feel that this number will only go higher. And this is not a batch specific problem as alumni also attest to the fact that people do not work for long at their first job after MBA.

So, why is that? Why are students unhappy at jobs they worked so hard to get and why are companies not able to retain the talent they worked so hard to acquire? In this article, I will try to answer this question from a student's POV based on my experience as a recent MBA graduate.

1. The University Hiring Process

The hiring process I faced during my MBA was not a whole lot different than what I saw in placements during engineering. In most cases there is a separate university hiring team created, that has quotas to hire candidates from a list of tier-1 colleges. A pool of interviewers is created, consisting of employees that have volunteered their time in organization building. Shortlisted candidates go through this pool of interviewers in completely random order and a final round is typically taken by a VP or a partner before rolling out the offer.

The problem with this system is that the team that is hiring you can be completely different from the team that you will be working with. You are not evaluated based on whether you will be able to do your day-to-day responsibilities well, or not. The focus is on bringing in a bunch of "smart" people and then distributing them internally based on which team has the requirement. This is one of the few times when you actually feel the "resource" in human resource.

While hiring, companies do not know who your manager will be, how your skill, experience, and personality match with that of your manager, and what kind of team dynamics you will be working in. And according to me, all of these are extremely important factors from an employee retention point of view. When I applied for jobs through a non-campus hiring route I observed a striking contrast. The hiring managers have complete control over the evaluation of your candidature. You are asked questions that directly relate to the tasks you will be expected to perform if hired and since managers are super involved in bringing you into the firm, they tend to go the extra mile, to help you settle in.

2. Students don't know what they want

Misalignment of expectations vs reality is not always the fault of the organization. Many students do not have clarity on which field they want to make a career in, after their MBA. Even the ones that do have this clarity, sometimes have it for the wrong reasons like a superficial understanding of what working at a role means. I have seen students change their career plan from marketing to consulting just because a lot of other students were preparing for consulting interviews and the peer pressure got to them.

To further understand my point, imagine two kinds of cohorts that enter an MBA program. Ones that plan to go back to the field they worked in prior to MBA i.e. consulting, operations, marketing whatever it may be. Others that did not like their previous field and plan to "switch" to a different field. Based on my experience the first cohort has it a lot easier, as trying to find your career path along with your MBA can become an anxiety-filled ordeal for some.

People in the second cohort only have access to external sources of information like internet research, inputs from batchmates, inputs from alums, etc. This may lead to making uninformed decisions that may land you in a situation where you are looking for a new job just 6 months after joining. For example, you take up a job in corporate strategy, only, you're not making any strategy at all and most of your day goes into putting Excel sheets in a particular format. In my opinion, roles such as strategy, CEO's office, program manager, etc, whose interpretation can be slightly different from firm to firm are at an even higher risk of this expectation vs reality problem.

3. Hangover of previous jobs

People who join a premier MBA program, typically have amazing academic backgrounds, great entrance exam scores, and are highly motivated since they invested time and effort in preparing for the program while working full-time jobs.

Hence, these people were also, for a lack of a better word "killing it" at their pre-MBA jobs as well. Most of my batchmates were excellent performers, earning multiple promotions and awards in their previous jobs and it can be disappointing when they can't pick up where they left off. Even if you don't want to go back to your previous field, you still want to make the same level of impact, which can be difficult early on in your first MBA job. You're not learning at the same rate as you did as a fresher and it is much more difficult to stand out of the crowd because firms also have much higher expectations from you. According to me, the feeling of making an impact or adding value is a much stronger driver of employee retention, than compensation.

All of this leads to a feeling of dissatisfaction which might lead to you not giving your 100% which again leads to a feeling of not making an impact and a downward spiral starts. You feel like you are entering a slump so early on in your career. For many such people, getting a new job and starting fresh is the answer to all these problems.

4. That time of life

"If the standard hike in the industry is 25%, then everyone will keep switching firms every few months and infinitely increase their compensation. That is not how it works. There exists a band in the industry for the level of skill and experience you have, and besides that, there are many positives of staying with a single firm for a long time"

These were the words of my first manager when I told him that I have an offer from another firm and was planning to make the switch because they are offering me more money. Since his views made a lot of sense to me, I have always been a little gun-shy about switching just because of more money. I have always believed that whenever you are evaluating an offer, always think of other factors like learning opportunities, employer brand, exit options, etc, and not just the compensation offered.

However, graduating from your MBA (typically) also coincides with your late twenties. Even if you're not going through major life events like getting married, you still anticipate them in the near future. For some people, practicality creeps in, where compensation or location becomes a lot more important. The point that I am trying to make is that it is rare for people to have 5-year goals after an MBA like they do after undergrad and people want to make the most of the next 2-3 years before they plan to "settle". Hence you'll find a pro "switch" mindset takes prevalence at a macro level, as opposed to a pro commitment mindset.

5. Good Leadership is rare

Organizational culture is one of the most popular topics for people to talk about on LinkedIn. Firms are personified and are believed to have "values" and "principles". While it is true that for any organization if all employees are expected to follow a common set of processes, they will also adopt a common set of beliefs. But it is also important to remember that organizations are not living, breathing beings, and more often than not, it is the "values" of the immediate reporting manager that form the basis of employee satisfaction.

According to me, good people managers are those who are inspirational yet approachable, who drive team performance along with team well-being, and who have high organizational power and use it to highlight your achievements. Since it is a very demanding role, you will find that even though every organization has many managers, very few of them are good managers.

A good manager identifies employee dissatisfaction very early on and tries to resolve the underlying cause. In fact, this is the phase of their careers when young professionals need a lot of guidance. Unfortunately, in some cases, the equation with the manager or the team members becomes the very reason why people start looking for better opportunities.

Conclusion

If you've read the article so far, you might have felt that your post-MBA job is one of the worst things that can happen to you. Even though this article paints a gloomy picture, but let me assure you that it's not all bad. Some fields such as MBB consulting or FMCG leadership programs, face very little attrition after the first year.

Moreover, I would also like to highlight that I am not an expert on hiring policies. Neither do I have a Ph.D. in human resource management. I am just a guy who was really popular in his batch and hence gets to talk to a lot of people about their jobs. The university hiring system definitely works and every year, thousands of students get access to their dream jobs thanks to the system. I am just trying to highlight some inefficiencies that if improved will make the system that much better for both students and companies.

Special shout out to Priyal Choubey for an amazing cover image.