The Insider Guide to Careers
Insider information, secrets and tips about getting hired and building careers. For employees and job candidates.
Since I get many questions on this topic, I will cover my thoughts across different groups of people with varying work experiences they bring to the table.
1) No work experience:
I recommend that students without full-time work not get into an MBA program. I recommend at least 3-5 years of work experience before a person gets into an MBA program. There are multiple reasons for this.
Once you work in a company, you understand that it is the exact opposite of what you read in business theory you learn in an MBA classroom. In a real-life workplace, you realize that engineering does not talk to marketing and wants to avoid the strategy teams. Likewise, Operations hate the Quality function and want nothing to do with after-sales service. Everybody hates HR. It is a wonder as to how the various dysfunctional company functions manage to work together. The Product Manager role exists because engineering does not talk to the strategy, marketing and customer experience teams. Likewise, if employees, managers and senior management got along very well with each other, HR would not exist.
An MBA program requires specialization in Operations, Marketing, Strategy, Technology Management, Accounting, HR, Finance, etc. If one has not worked in a company, the student does not understand the differences between these specializations. This lack of understanding makes it difficult for one to choose a specialization. All of them seem similar on the outside, and choosing one option is difficult, but each choice can lead to very different career paths. The more one has worked in industry, the more folks know what they should not choose. This choice helps them make better decisions about their careers.
It is possible to move across functions once you join a company. After an MBA degree, you are expected to prove yourself right from day one. Companies do not pay a lot of bucks to you to discover your passion and make experiments in life. Changing roles and functions is unlikely. In my experience with tens of thousands of employees, I have seen barely 1-3% of employees change careers or functions after getting a master’s degree. Once you work in a company, relevant experience is essential to get promoted and get better jobs. When faced with a choice of making lower compensation in a new function vs making higher compensation in the same function, most people bite their teeth and choose to grind it out for additional compensation.
In a tight labour market where demand exceeds supply, the bargaining power lies with employees. They can command premium wages, and companies are okay with relaxing their expectations. On the other hand, in a recessionary scenario like the times we are in presently, companies are very selective about whom they choose as they have a glut of applicants. Generally, there are 300-500 applicants for every job in the tech sector. This number has climbed to more than a thousand applicants for each job posting. A couple of student mentees studying in Berkeley, Purdue, ASU and NYU tell me that there is almost no recruiter interest in students with no work experience. Every company needs work experience. Even in MS programs, the best companies preferentially choose students with 4-5 years of work experience and give the last priority to the students with no work experience. From the companies’ point of view, it is not unfair. Work experience provides business and people skills, which are sometimes more important than technical skills.
Most companies are looking for the right attitude and leadership skills in MBA students they hire. Hindustan Unilever, Cisco, General Mills, P&G, Google and other MNCs have extensive in-house training programs once you join the company. Most of the technical skills to do your job can be learned after entering the workplace. However, the skills no company can teach are people skills, communication skills and leadership skills. You either have it or do not. I know of friends who had joined Unilever and were deputed to the remotest parts of India for the first six months to make them learn humility and connect with the end customers.
India’s situation is unique compared to the rest of the world. In India, most students are in a rush to finish their education as early as possible. The demands of parents and society have yet to evolve to suit the needs of the modern workplace, which requires continuous upskilling and reskilling. Even the best students from the IITs are in a rush to do their MBA from other top schools like the IIMs without applying their logical thinking hat. Everybody is in a rush to compete with their friends and peers, and no one has the time to think whether a mad rush to get into an MBA program straight after college makes any sense. I know of students from the best IITs who have gone to the best IIMs without really applying their minds and, after 15 years of work, have yet to discover their interests or passions. They are either stuck doing mid-management jobs or move to places like Canada to restart their careers and begin life from scratch as Uber drivers.
There are good students in India, especially in non-CS engineering branches like Mechanical, Civil, Chemical, Biotech or science programs, who cannot find meaningful jobs in India. Most of the jobs in their space are very low-paying and gruelling. This scarcity is true even for many IIT students (outside CS and EE) who often struggle during campus placements. They feel that doing an MBA will help them find a respectable, high-paying job. The problem is that they do not consider the opportunity cost. They spend around 33 lakhs at an IIM for two years. They are also not working for the two years they are studying. An MS or MBA degree could be a no-brainer if higher education is free. However, spending money on an expensive degree only makes sense if you are 100% sure it is the right choice. Of course, if you are from a wealthy family where money doesn’t matter, many of these rules will not apply.
Let us discuss whether it makes sense to work in a company with a not well-known brand name, intense work schedules and measly salaries. Early in your career, you should never focus on compensation (comp). Shoot for companies where you get to learn a lot. Learning happens only when you stretch yourselves. You must work hard, irrespective of compensation, early in your career. That is the only time your body and mind is ready to handle all sort of experiences without batting an eyelid. Looking for work-life balance early in your career is delusional and puerile. You will only end up as a stunted employee who is full of themselves and unwilling to stretch and learn.
Early in your career, your only target is to have enough to survive and pay your college loans. High compensation makes little sense. Your focus should be on skills, learning and achievement every year. All the discussion on work-life balance can happen when you have a family, and not before. When you have the right skills and are the best in your work, you can command whatever compensation you desire in the market. So avoid getting lost in the rat race for money early in your career. Companies that pay over the top may have many other issues like crazy deadlines, lack of promotions, bad managers, and no learning environment. So, high compensation should be the last of your goals early in your career. Likewise, it doesn’t matter where you work if you are learning a lot. It is highly recommended that you work for an unknown company and learn a lot rather than work for a great company and learn little. Again, focus on skills. Companies considering you after the MBA program want to know what you learned in the workplace and hear your work stories. A great story will always get brownie points. MBA recruiters are always searching for diamonds in the rough, and you could be a perfect match for what they seek if you have the right skills. Remember again – focus on skills, not on comp.
2) 1-2 years of work experience:
It takes about six months to settle into a company, understand how it works and begin executing a plan where you can add value. When a new hire joins a company, most sensible companies provide around three months for the person to settle in and make mistakes. Typically, the new employee can make many mistakes in their rookie period.
By the end of one year, an employee has an excellent idea of what happens in the company. If they are working on substantial transformational projects, it may require around two years to see any meaningful change.
You should also conduct a skill-gap analysis at the end of every year to check what you learnt so far and what skills you should target in the following year. Never work mindlessly for a long time without cross-checking what skills you are gaining through that work experience.
In year two, one repeats a lot of stuff they learned in year one. This repetition helps in gaining mastery, but it can be repetitive to a person who is quickly bored. By the end of year two, a person has gained whatever that role and that company has to offer. Two years is the minimum time for a fresh university graduate to work in a company and learn things.
Harvard Business School used to have a 2+2 program, where they guaranteed final-year undergrads a spot in the MBA program if they got two years of work experience. This program was a unique experiment rarely seen in business schools. Most MBA programs in the US require a minimum of 4-5 years of work experience. Unfortunately, the quality of the HBS students with two years of work experience was not good enough compared to the others with more experience, leading the school to cancel the program.
3) 3-5 years of experience:
By year three, employees should be ready to learn new things at the level above them. A rule of thumb is that one should ideally get promoted every three years. This promotion should happen so that you are wholly stretched in year three and are doing the work of the role above you. Once you prove that you can manage the work effectively, then you get promoted. If a company promotes you first and then you learn to work in the new role, it is a recipe for disaster. There is a high chance of you failing.
If you are an undergrad and worked for three years without getting promoted, consider working in a different company or role. Variety in experience can help you learn more about best practices and your current value in the job market. If you are underpaid, changing jobs is the best way to get to parity. In addition, the more work experience you get, the more valuable you are to employers. If you are not getting interest from recruiters after three years of work experience, that is also a signal that you are wasting your time in a role or company where you are not learning.
You are in a safe spot when you have five years of work experience. You fit the class profile for most US MBA programs. When a recruiter comes to campus, they look at the average work experience of the students and decide if it makes sense for them to come over. Few recruiters will want to consider your candidature if you are one or two standard deviations below the average. An exception can be lower-tier consulting companies, which badly need warm bodies to cover for their high attrition, high travel load and crazy work-life balance in the workplace.
4) 5-10 years of experience:
Having more than the average years of work experience (work ex) will give you an advantage compared to other applicants. There is too much competition in the 4-5 year work experience range, so admission is easier if you have more than the average work ex. Also, admissions officers do a balancing act. Even if you are not the most outstanding applicant, they can use your work experience of way more than average and compensate for multiple people who may have slightly less than average work-ex. This juggling helps keep the overall average numbers at a certain level. The LGO program at MIT is an example of a program that attracts people with more work experience.
The biggest issue is that recruiters find it difficult to slot you into their new hire batch if you are very different from the average. Most in-house training programs in a company are oriented toward folks with some experience but not too much. Therefore, a person with more work-ex may feel bored and not challenged during the training process, making it difficult for the company to evaluate that person. Most companies play it safe rather than take risks with new hires. Having work-ex that is 1 or 2 Standard Deviations above average can begin to hurt you during placements.
Of course, you can talk to the company recruiter, bag a position more apt for your profile, and get a higher than entry-level position. However, this is easier said than done. Most companies prefer to hire through the open market for experienced roles rather than through MBA hiring.
Indians like Indra Nooyi, Sachin Pilot and Ivan Menezes did a second MBA in the US after an Indian MBA because they wanted the US MNC headquarters experience, which they would not get by being only in India. Sometimes, people do a first MBA to get a reasonably good job and then do a proper MBA after that work experience. I know of people who have done their first MBA from Symbiosis and then gone to IIMs for their second MBA.
5) 10 years of experience and above:
Surprisingly, I have seen people (around 5-10% of the batch) in top MBA programs with substantially high work-ex of 10 years and above. All the problems I noted in the earlier category apply here. Frankly, there is no ideal time to apply for an MBA. You study when you want to, not because recruiters want you to study or because peers or family want you to. Some of these folks are highly motivated. Hence, these folks are comfortable doing their personal job search independent of the MBA career services team. Since they have changed jobs multiple times in the past, finding a new job is relatively easy for these folks.
The truth is that after a decade of work, many people are married, have children or have innumerable other family commitments. Colleges are always willing to consider much older applicants with a good story to tell, but very few folks in this group apply to FT MBA programs. Doing an MBA is their last thing in mind, especially since most programs are expensive. At the same time, the world is changing very fast, and new skills are required every decade. One will need to reskill and go back to college frequently. The earlier mentality of stopping studies after having family commitments is a fad.
In a regular full-time (FT) MBA program, folks with substantially more work-ex will not easily find jobs offering much higher compensation than their peers. Shooting for executive MBA programs for people 10-15 years into their careers could make sense. Wharton, MIT, Columbia, Chicago, IIMs and many others have executive programs and part-time MBA programs targeting much older applicants. Kellogg and Wharton have created a niche brand in this space. People like Satya Nadella are from such executive programs. Many of these folks are sponsored by the company, decreasing the financial stress on the employee. Also, the sponsored employees are considered superstars. They can have a stellar career when they return to the company, as the company is equally interested in getting their ROI by devolving more responsibility.
At this stage, full-time programs make less sense. It is all about executive and part-time MBAs. The Sloan Fellow program is a good alternative for folks with 15-25 years of experience. It has branches in MIT, Stanford and LBS, and the cohort is full of experienced superstars worldwide. The former UN Secretary-General, Kofi Annan and Carly Fiorina of HP were from this program at MIT.
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