This post originally appeared on Stacy's "Strictly Business" MBA blog on U.S.News.com
Class of 2012 grads are breathing a collective sigh of relief—and likely doing some version of the happy dance—as they embark on their post-MBA careers in a job market that looks several shades brighter than when they entered business school just two years ago.
According to new data from the Graduate Management Admission Council's (GMAC) 2012 Global Management Education Graduate Survey and the 2012 Corporate Recruiters Survey, 62 percent of newly minted MBAs have job offers right out of the gate. The good news is even sweeter for graduates of full time, two-year MBA programs, where 64 percent have job offers in hand—nearly matching the all-time record set in 2001, when 66 percent of students had employment offers, GMAC reports.
Companies are feeling optimistic, too, with 79 percent saying they plan to hire recent MBA graduates this year, compared with 72 percent in 2011 and a paltry 55 percent in 2010.
The largest gains came from a surprising source: small businesses. Companies with fewer than 1,000 employees accounted for the largest proportional increase in demand for graduate management hires among the 1,096 global companies surveyed.
"These entrepreneurial firms see real value in the skills that management graduates bring to the workforce," says Dave Wilson, president and chief executive officer of GMAC.
Landing the job: Recruiters want graduates with more work experience, either before they enroll in business school or from internships during their program. GMAC reports nearly three quarters of employers seeking to hire MBAs prefer candidates with more than three years of work experience.
While the search for employment typically requires a multi-pronged approach, some strategies yielded far greater success for this year's graduates. GMAC found that 39 percent of students used internships to land a job, with a 71 percent success rate, making it the most effective job search method that students cited.
Also, MBAs who received a job offer through an internship were offered a greater salary increase over pre-degree earnings (84 percent) compared with grads with new job offers (70 percent). These findings indicate that employers recognize the value added by the internship experience.
Students also reported respectable degrees of success in their job search using traditional, school-based programs, such as career services (53 percent), job boards (43 percent), job fairs (34 percent), or networking with classmates and alumni (32 percent). Interestingly, the recent exponential increase in social media usage and online job search sites proved the least-effective method for 2012 graduates, yielding a success rate of only 17 percent and 15 percent, respectively. Participating in an internship or work project lead to a job offer nearly five times as often as online or social media methods, GMAC says.
Show me the money: Employers in the United States expect to pay MBA graduates substantially more in 2012 than new hires with only a bachelor's degree. This translates into annual earnings for new MBAs that are $40,000 higher, on average, than the salaries bachelor's degree-holders can expect, according to the Corporate Recruiters Survey.
Among students who had at least one job offer at the time the Global Management Education Graduate Survey was conducted in February and March 2012, full time, two-year MBAs saw an 81 percent gain between pre-MBA and post-MBA salaries—up eight points from last year. In 2012, the median expected starting salary for recent MBA graduates working in the United States is $90,000, though many industries report significantly higher starting salaries. Nearly half of all companies offer their starting MBA hires a signing bonus, and the median signing bonus for those candidates is $15,000, a figure unchanged from 2011, GMAC says.
This year's graduates also seem to have an upbeat outlook on student debt, a subject that has garnered much attention over the past year. For the first time, GMAC asked students graduating in 2012 about the level of debt they incurred while in b-school. Although more than half (59 percent) of graduating students report that they expect to have some debt after graduation (a median of $45,000), GMAC reports it has no bearing on the students' views regarding the quality, reputation, and value of their graduate management program.
Those who entered business school in 2010 took a considerable gamble, betting that, come graduation, the economy would have rebounded and their newly honed management and leadership skills would make them even more attractive to prospective employers. Judging by these responses, collected from 6,292 graduate management students at 136 business schools worldwide, the wager seems to have paid off nicely.
Stacy Sukov Blackman launched her MBA admissions consulting company in 2001 and has since helped thousands of clients gain admission to the most selective business schools in the world, many with merit scholarships. Blackman has degrees from both the Wharton School and the Kellogg Graduate School of Management, and is the author of The MBA Application Roadmap: The Essential Guide to Getting Into a Business School. She has also published a series of online guides which contain in depth guidance on how to develop essays for top business schools. Read reviews of Stacy Blackman Consulting services.