Markets' Dips Raise Concerns for Business-Bound Seniors

It's been a ride wild enough to make job-hungry seniors and stockbrokers alike queasy.

From a spectacular high of 9337.97 in mid-July, the Dow Jones Industrial Average has zigzagged its way down some 1500 points, closing at 7795.50 last Friday--a net drop that rivals the 1987 Black Monday crash of 20 percent.

The fluctuations have prompted some prominent analysts to predict the run of the bull is turning into the year of the bear, and seniors are listening.

But an earthquake on Wall Street makes only a tremor on Mass. Ave., as corporations fall over each other to get on this fall's recruiting calendar.

Large investment banks and consulting firms view recent graduates as shortterm, low-risk hires, while companies whose business isn't the market aren't feeling a pinch in an otherwise stellar economy.

All the same, smaller companies and recent graduates looking for jobs say the unyielding optimism of a few months ago has given way to caution.

Bracing for the Fall?

Predictions about the market are as easy to find, and as diverse, as the imagination.

The chief economist of Deutsche Bank, a German investment bank, has said the Dow will bottom out around 6500, while Abby Cohen, a prominent analyst for Goldman Sachs, is predicting a return to the 9300 plateau by the end of the year.

But any confusion over the markets' recent spins, as well as troubles in Russia and Asia, have not been had much impact on the job market in America: Unemployment remains at nearly a 20-year low of 4.5 percent--1.8 percent for college graduates.

Seniors notice the paradox.

"The market's volatility is cause for concern," says Brooke Herlihy '99. "But the economy and job market are very strong."

The Office of Career Services (OCS) says it's been swamped as always by recruiters wanting to come on campus and attend the annual Career Forum.

"We've not been affected by this," says Judy Murray, OCS director of recruiting. "We actually have had to turn away [recruiters]."

The only decrease in interest from companies has been for students to work in Russia, she says.

To some extent, Harvard's Ivory Tower and reputation are tall enough to keep its students above the economic fray. Murray emphasizes that recruiters focus on Harvard because they want the cream of the crop.

"They still want the brightest and the best to work for them. They're not going to cut out coming to Harvard," Murray.

She adds that the presence of Harvard alums at the highest ranks of corporate America guarantees a demand for graduates.

Even in 1987, when the market's dive meant a fall in hiring during the recruiting season, Harvard was hit softer than most schools, she says.

A larger factor, however, is that hiring companies see the market's downturn both as short-term and as only a part of a larger-successful-economy.

"If you reacted to the market on a daily basis, you'd be on a funny farm," says a recruiter at a Greenwich, Conn., investment bank.

"Our business is not affected because stock market fluctuations have very little to do with actual, underlying business results," says Carl Burke, recruiting manager at Integral Consulting in Cambridge.

Even high-profile companies that have taken a beating in the market insist that their hiring will not be affected.

Paine Webber's stock has dropped some 40 percent from a year-long high in mid-August to its current level at the end of trading Friday, but a spokesperson said the stock's volatility would have "no effect" on the company's recruiting plans.

Smaller Firms, Less Optimism

While large New York investment firms stress that recruiting would remain constant, jitters are apparent in smaller firms.

The head recruiter at a Connecticut-based consulting firm that employs about 100 people says the job market is shaky.

He says the market's volatility makes him more conservative when hiring. He is all-too-familiar with companies that are floundering, and responding to inquiries from people thrown out of work by the market.

"I was just talking to a person on the phone [who is looking for a job] because the company had blown up," he says.

Although he is still hiring, he says he doesn't blame companies who are taking the market downturn seriously and are in a hiring freeze.

Recent graduates who are looking for work say they notice a subtle shift in the attitudes of prospective employers.

"Everybody's still hiring, but it seems that people think more," says Harry B. Kargman '98, who has been feeling out offers since graduation.

"I don't think that the job market has been hurt yet, but there's more time spent interviewing for the right people. Even though they're looking for a ton of people, they're more cautious," he says.

He isn't worried--yet.

"I still feel confident now, [but] who knows what I'll feel six months from now....There seems to be less security today," he says.

The difference in hiring attitudes between small and large firms centers in employer expectations.

The New York investment bank "machines," with thousands of analysts, have a very high rate of turnover. Recent graduates accept positions as a way to gain work experience before business school, and they aren't expected to stick around.

"A lot of the positions that [investment firms] recruit for are two-to three-year analyst positions. They provide them with the work experience to get into a top-tier business school," Murray says.

Often recruiting for those firms focuses on the immediate impact that new recruits offer. Hiring them for a few years is a low-risk proposition because companies can respond quickly to economic difficulties by cutting back on hiring.

Smaller firms are looking for the company's future leadership, and hiring is a long-term commitment, which makes adjusting to a downturn more difficult.

Main Street, Not Wall Street

Moving away from finance puts distance between a job-seeker and Wall Street's unpredictability. Firms whose success is less tied to the market say the dance of the Dow isn't cause for alarm.

Executives for Proctor & Gamble, the Cincinnati, Ohio-consumer products corporation, say their plans for recruiting are unchanged.

Although Proctor & Gamble's stock price has declined some 30 percent from a year-long high in July, the company is expressing nothing but optimism.

"We continue to believe that the company is growing," says Chuck P. Moore '73, a company executive and recruiter, who is also a former Crimson business manager. "We still intend to be a $70 billion company by 2005."

While investment banks and consulting firms have always formed the meat-and-potatoes of recruiting, technology companies are increasing their presence.

Some, like Internet bookstore Amazon. com, are tied to the market through their stock, but their business is less dependent on the market's strength.

The company is one of the poster children of technology wonder-companies that have had astronomical growth in a very short time.

Founded in 1994, the Seattle, Wash., firm's stock, fueled by high expectations, has grown tremendously this year.

But the success has been muted over the last three weeks, as the price dove from 134 3/4 points to 761/8 after Friday's close.

While the stock's dizzying progress has made headlines, the company says it is not focused on its market performance and will hire accordingly.

"As a company, our philosophy is to look at the long term," said Erynn B. Petersen, a company recruiter.

"We have very clear long-term goals. If we allowed ourselves to be swayed by market fluctuations, we would get nothing done," she said.

Kathryn A. Knowles, a recruiter with Austin, Tex.-based Trilogy, cautioned that even the smartest students aren't "immune from the economic downturn."

All the same, technology companies have tremendous growth potential and are constantly in need of new recruits, she said.

"Our biggest problem is that we're growing faster than we recruit," she said.

Beyond Corporate America

For seniors looking outside the private sector for the next year, the news is also encouraging.

Murray says the availability of graduate school loans is not affected by the stock market.

And opportunities in the non-profit sector are expected to improve with a rough market.

For instance, recessions are the peak of recruiting for the Peace Corps, says Rae M. Mims, spokesperson for the Boston affiliate of the international non-profit development agency.

"Economic downturns are our plus side. If they aren't any jobs, [students] come looking for us," Mims says.

As a whole, employers from Wall Street to Main Street emphasized that the stock market doesn't drive the labor market. When it comes to hiring, companies said that as long as Harvard produces the best, there will be a place for its graduates--at least as for now.

"There is a strong demand, and there will be a strong demand, for the brightest students," says Karen Kidder, a recruiter with the consulting firm McKinsey & Company.