Last week GMAC released the findings of its annual Corporate Recruiters Survey of 565 employers from 44 countries around the world – and results are looking good for business school graduates! Employers around the world are placing more value on the MBA degree, proving that the degree is a good investment.
Percentage of companies hiring new graduates, by degree type. Source: Graduate Management Admission Council 2014 Corporate Recruiters Survey.
Here are several highlights from the report:
• 80% of employers plan on hiring MBAs in 2014, up 7% from 2013 and up 30% since 2009. (In 2009, only half of recruiters hired MBAs.)
• Projected hiring in all sectors is at the highest it’s been since the Great Recession in 2009.
• Only 25% of companies reported a focus on overcoming economic challenges, compared to 58% of companies in 2009.
• 74% of employers plan on hiring bachelor’s degree graduates, compared to 75% in 2012 and 2013 (in other words, no significant difference). In 2009, only 56% hired bachelor’s degree grads.
• 86% of U.S. employers, 83% of employers in the Asia-Pacific region, and 61% of employers from Europe all plan on hiring MBAs in 2014. All have increased since 2012.
• 50% of employers plan on hiring grads from master in management programs, an increase from 45% in 2013 and 18% in 2009.
• 45% plan on hiring grads from master of accounting programs, compared to 36% in 2013 and 17% in 2010.
• The numbers for master in finance grads are as follows: 44% of employers plan on hiring this year, compared to 39% last year and 41% the year before.
• Employers rated communication skills as the most important skill they look for in new hires, ranking it twice as important as the next winner, managerial skills. Other skill options were teamwork, technical, and leadership.
• Salaries – They are flat, but at a comfortably high plateau. Employers plan on offering newly minted MBAs an average of US$95,000 in the U.S., US$69,000 in Europe, and US$21,340 in Asia-Pacific. For bachelor’s degree holders, median base salaries expect to run at US$50,000 in the U.S. and US$41,000 in Europe.
Most commentators on the b-school biz are justifiably happy with the results of this survey. So am I. Here’s why and a few other observations:
1. The most obvious reason to be thrilled with these results is the buoyant job market, especially for MBAs. MBAs are in demand. But they’re not the only ones – holders of specialized degrees in business are also sought after, and with a lower out-of-pocket and opportunity cost than the MBA. Many professional organizations and fields outside of business (law and academia for example) would think they had died and gone to heaven if they could report stats like these.
For those of you in college or just out and trying to decide on career direction, if you have any interest in business or a specific area of business, explore that field. Perhaps get an internship or get a job in that area. Talk to people working in that field. If you enjoy it, consider a specialized masters or MBA to enhance your professional skills and opportunities.
At the same time, and at the risk of being repetitive, every graduate school applicant has to determine that they have a goal requiring a specific course of study and that the course of study is likely to be worth the cost. The payoff can be and usually needs to be financial, but it can also be in terms of improved career satisfaction or simply learning. That is a determination for you to make, but it is one you must make before you commit to an expensive, time-consuming graduate education – even an MBA.
2. The growing popularity of specialized masters, specifically the Masters in Management, among recruiters is striking. It’s less expensive for recruiters to hire holders of Masters in Management, and it’s less expensive for students to acquire the degree.
I would love to see data on how much MBAs vs. MiMs are making let’s say 10 years after graduating college. Now that would be an interesting report. So far it’s not out, but if such a report were to show little or no difference in earnings at that stage in one’s career, than the MiM may be the way to go and the traditional two-year MBA has one more source of significant competition.
Even without that data, as a result of the MiM’s recruiting mojo and reduced cost for students, expect to see more programs developing Masters in Management for early career candidates. Ross, Duke, and London Business School already offer it. It wouldn’t shock me if others offer this kind of a program soon; I would keep my eye on Tuck, Kellogg, and Cornell for early-career Masters in Management programs. MIT Sloan, LBS, and Stanford GSB already have Masters in Management aimed at mid-career professionals.
I also anticipate that more MBA programs will follow Cornell and Kellogg’s lead and offer accelerated MBAs for those with advanced degrees or strong business background. That implies that if you have an MiM and later decide you want your MBA, you would eventually reduce the out-of-pocket and opportunity cost of your MBA.
Finally, those of you who are long-time readers of Accepted’s blog may remember that we picked up on this trend about a year and a half ago in “Grad Degrees that Lead to Jobs,” when looking at an earlier GMAC Poll of Employers. (Sometimes I just gotta say, “I told you say so.” Just a little crowing. )
3. Another remarkable piece of info in this report is the high value employers around the world and in various disciplines place on communications skills when choosing whom to hire among business school graduates.
I wonder if the technical number crunching is taken for granted as a given by recruiters. Consequently what separates those hired from those receiving form rejection letters of consolation are communications skills.
4. The flatness of salaries amidst growing demand for b-school grads and rising tuitions. It is not shocking that salaries haven’t climbed given the recent recession. The good news is that the average MBA salary in the U.S. still provides a significant premium over average salaries for recent college grads. The bad news is that tuitions are continuing their seemingly inexorable rise. For an applicant considering an MBA or any other graduate degree, again, you need to evaluate whether the benefit, for you – not the average Joe or Jane – is worth the cost.
For most students in MBA and specialized masters programs, as this GMAC 2014 Survey Shows, it’s lookin’ good. Real good.
By Linda Abraham, president and founder of Accepted.com and co-author of the new, definitive book on MBA admissions, MBA Admission for Smarties: The No-Nonsense Guide to Acceptance at Top Business Schools.
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This article originally appeared on the Accepted Admissions Consulting Blog, the official blog of Accepted.com.