EssaySnark

Today we’re gonna put together some themes we’ve been discussing in separate, seemingly unrelated posts just recently.

Before the July 4th holiday we were talking about the trends of application volumes decreasing at business schools in the U.S.

Then earlier this week, in your rude awakening back to real life on the Monday morning after that holiday, we launched straight into the importance of career goals in your MBA apps.

Now let’s put those things together.

Imagine for yourself, won’t you? A little thought experiment. What happens to you as a motivated, striving, earnest MBA student who’s headed into their second fall of bschool, after the internship, in the midst of a job search to secure that picture-perfect post-MBA job… and the economy falls apart?

Because that’s the one more factor to consider that’s marginally related to this question of application volumes, and that’s the question of trends in the world.

Not so much because you need to worry about how much competition you will have when you submit your apps (that’s out of your control) but more because you should have an awareness of trends and an appreciation for what the world’s economies may do in the future — as in, the time you will be graduating.

This is WAY more important than whether HBS et al saw apps go up or down last year.

Because of the importance of that, let’s look at these charts in combination:

graph from EssaySnark datasets

graph from GMAC Researchers

Chart of unemployment data published in WaPo

As you either already know, or you’ll learn in bschool: The first chart, capturing MBA application volumes, is what’s called a lagging indicator — it shows what has already happened in the market (in this case, the “market” for getting accepted to bschool).

We can’t look at these numbers in isolation, though. People apply to bschool for a variety of reasons, but many of them — most of them, probably — are economic. If someone’s job is going well and they are getting paid a satisfactory wage, they’re less likely to leave to go back to school. And, if someone’s job is at risk, where there are layoffs being threatened, then that’s an excellent time to jump ship — even more so if it’s an industry-wide downturn and you want to seek a safe harbor for two years (aka bschool), to ride things out. So app volumes are a lagging indicator, because they show what people do in response to a change in the economy.

Just for purposes of illustration, the second chart is a leader indicator in the context of a slice of the application market: It shows hiring intent of major companies for international MBA grads only. This particular graph doesn’t actually show us an economic indicator, as it’s not saying that those companies think that their economic outlook is worse. Instead, it’s one predictor for what will happen in the future to application volumes for the non-resident applicant pool. (By contrast, if this were an economic chart, depicting hiring plans for major companies, then it would be an economic/market indicator rather than an application market indicator.)

Want to see a leader indicator for the economy?

Duke Fuqua’s Professor Campbell Harvey was quoted here:

"Yes, the economy looks good right now, but the yield curve is about the future"

Prof @camharvey explains why that future looks bleak in an interview with @BobbyAllyn and @MichelMcQMartin of @NPR https://t.co/Zd74tK22mi

— Duke Fuqua (@DukeFuqua) July 3, 2019

(Pro Tip from Not-A-Pro: Nobody can predict a recession — and whenever a recession is about to hit, especially when it’s a big shock like what happened with the dot-com meltdown or the housing markets, there are a gazillion pundits saying “Oh, but this time it’s different!” See article .)
 

That third chart above is what the underlying American economy did over time. The main line is the number of unemployment claims. The fewer unemployment claims there are, the lower the unemployment rate, and a low unemployment rate indicates a healthy economy. (Unless it gets too low, and then there is all this hand-wringing about inflationary pressures. Rising inflation should be occurring right now. It’s not. That’s why the economists don’t know what to make of things in this specific moment in time.)

That spike in the third chart above with unemployment numbers depicts the very bad era of layoffs and sadness that happened when the housing market collapsed in 2007-2008 and everything went into a tailspin. That spike is bad.

If you think of that bumpy line inverted, it gives a directional sense for economic expansion: The more people working, the better shape all of us are in. If that line were flipped, then it would loosely mirror the stock market, and if you’ve been paying attention to those charts, you know they are ratcheting higher again. And, as you and Mr. Newton both know, anything that goes up has to come down, and insofar as the stock market and our record-breaking economic expansion, that’s where the ‘Snark gets concerned.

Here’s the first graph overlaid on the third.

We took liberties of adding in our own projection of what app volumes did at these two schools in 2018-19 via the dotted lines on the graph.

That does seem to indicate that NOW is a window of great opportunity in applying to business school.

Because, if the economy weakens — strike that, when the economy weakens — it’s going to send people flooding into the grad school market. App volumes will again go up, perhaps not immediately, because it takes time to jump through the hurdles of GMAT testing and all. But on a lag of some reasonably short duration, the effect will be seen in the admissions offices again. Since that hasn’t happened (yet — though there are signs of weakness in some industries including manufacturing and trucking) then that means that this year is indeed looking to be an advantaged one for all of you planning for the Class of 2022.

We’ve mentioned this caution in passing before, and we don’t want to be all alarmist and make a big deal about it, because you need to live your life now, and plan for the future, and go for your dreams, and you can’t get paralyzed by what the economy may or may not do. And besides, we have no crystal ball to tell you for sure if you’re gonna get in, or the economy will do this or do that in the next six months or six years.

So the point of all this is to only get you to take stock.

What if you put all these plans into place, you execute flawlessly, you have the wind at your back and you make it into the school of your dreams?

What if you relocate to that new city and have a fabulous first year, and go off to your internship, and head back to campus in August 2021… and the world falls apart at the seams?

Talk to any MBA grad from the Class of 2008 and you’ll know what we mean.

Thinking through your plans, as best that you can, is an intelligent thing to do as you are embarking on something this big.

Maybe putting more extra money aside than you think you might need, not just for those two years of bschools but for at least another nine months or a year thereafter too.

Remember, your student loans will start coming due for repayment in about six years after you graduate — whether you have a fancy new job or not.

All of this may seem amorphous and unreal, thinking about it now. After all, you haven’t even been accepted yet! But looking for contingency plans, and considering worst case scenarios along with those rose-colored best, is a good way to vet your plans and decisions and make sure you’re pursuing a sound plan as you can from the get-go.

A point that sometimes escapes excited Brave Supplicants thinking about post-MBA plans: The school has no obligation to find you a job. They will do all that they can to support you, to make opportunities available, to work relationships with in-demand companies and get recruiters to campus to meet you. But if the job market implodes and hiring freezes are enacted, the school will have no more options for you than your Uncle Bob would in finding you that prestigious new job.

If your dream post-MBA job becomes impossible, what would you do? Go back to doing what you’re doing now? What options would you explore?

It may not be fun to think about, but it’s kind of like the stock trader who’s made a killing, year after year — and has only ever picked stocks in an economy with full employment. It’s hard to imagine what you have not experienced, but it’s useful to force yourself to sometimes anyway.

We live in uncertain times. It’s impossible to predict what will happen in the economy (whenever we do, we tend to be wrong, though that doesn’t stop us from trying). This MBA admissions season is likely to be similar to last one, and last season, lots and lots of BSers made it in. If you’re getting your ducks in a row to try for the Class of 2022, then we think you should end up with some success — with proper preparation of course! (Shameless self-promotion: Our Complete Essay Package can support you in that!) It’s not going to be a cakewalk but it also shouldn’t be a bloodbath this year.

We wish you luck, and beseech you to GET STARTED NOW!

Today we’re doing a lazy lame VERY HELPFUL thing and instead of blathering on about some MBA admissions topic, we’re going to simply redirect you to this post where a former Brave Supplicant who ended up at their top choice MBA program illustrated in detail why the schools want you to figure out your post-MBA career goals NOW, before you apply.

And we’re doing the lazy lame VERY HELPFUL thing of copying in what an admissions director said about goals , as reinforcement:

And, we’re doing the definitely lamer thing of shameless plugging our Career Goals App Accelerator at the same time.

The schools seemingly care less about career goals than they used to. True that. Most schools have dropped questions about “long-term goal” from their essays and apps, because heck, we can’t even figure out where we’re gonna be at the end of this year, much less in 5-10 years. But you still should be mapping out some plans for yourself. Stanford asks you to “Describe your aspirations” and even if your goals may change radically from what you’re thinking today, you still need to have a reason for pursuing an MBA. And you need to be able to articulate that. Goals have less of an emphasis in apps but if you’re not prepared, they will come up when you don’t expect it — so, plan on them coming up.

This is the first thing you can do to build your app strategy.