PG&E’s finance department began recruiting more MBAs in 2000, prizing their skills, experience, and leadership potential, says CFO Chris Johns. Other departments took notice, and the company stepped up such recruiting for all functions. Last year, PG&E hired 13 MBAs; this year, it’s aiming for a dozen, says Johns.
“Companies that were hiring one or two MBAs for the past few years are now looking for eight or nine, and a whole slew of new companies are coming onto the campuses,” comments Maury Hanigan, president of the MBA Scouting Report, a consulting firm that helps employers target recruiting efforts. Companies such as American Express, Johnson & Johnson, Raytheon, and Textron report they are increasing the number of campuses they visit and the level of hiring for their MBA finance-recruiting programs, most of which are just five or six years old.
Salaries are going up, too: at Wharton, the median salary offered to the 22 percent of the class going into corporate finance has jumped from $85,000 to $95,000 over the past two years, plus sign-on bonuses. Meanwhile, the travel and entertainment costs involved in recruiting have tripled this recruiting season at PG&E compared with the previous one.
How to retain these up-and-comers until they reach maturity, however, is another issue. The general turnover rate among MBAs who have worked for a company 18 to 24 months is “staggering — probably 50 percent leave,” says Hanigan. That puts pressure on every step of the recruiting process — from selecting the right campuses and deciding whom to put on the interview beat to identifying the right prospects and nurturing their careers.
What Companies Want
Later that Saturday at PG&E, seated in a tony executive office, Ananda Baron attempts to answer the “So why are you here?” question. In her case, the biggest draw was the California utility’s new and ambitious goal to cut greenhouse emissions through alternative fuel sources, such as solar power and cow manure. This is a good answer: interviewer Rand Rosenberg, senior vice president of corporate strategy and development and a former investment banker, eagerly explains that the “green” initiative was what convinced him to join the company a year earlier.
The conversation has become more formal since breakfast. As leader of PG&E’s MBA leadership-development program, CFO Johns has urged his colleagues to focus on the 3 (out of 12) hiring criteria they have been assigned and to be judicious about how high they score the students on the five-point scale they’re using. “They’re all good, so you have to ask pretty probing questions to see what distinguishes them,” he says.
Now Rosenberg is trying to follow the rules. Responsible for assessing Baron’s skills in strategic thinking, ethical convictions, and concern for high performance, he swallows his enthusiasm for the environmental stuff and moves on to ask her what the one thing he should remember about her is; what her biggest disappointment in life was, and what she learned from it; and how her past experience in the nonprofit world led her to business school.