Economist’s show Europe’s (including UK) MBA charms waning.

Question

Request all current students and Adcom representatives to Share their views on the below mentioned article

Article from Economist (https://www.economist.com/whichmba/which ... lcome-here)

NOT so long ago business students flocked to Europe. Compared with their American counterparts, European schools were cheaper and their student bodies more diverse, both attractive features—and the salaries of European MBA graduates were often higher, too. Some of these attractions remain undimmed. But they are no longer enough to bring in the punters. Data from The Economist’s latest ranking of full-time MBA programmes suggest the appeal of an Old World business education has gone into a rapid decline.

The intakes of many of Europe’s flagship full-time MBA programmes have plummeted (see chart). Enrolment on Aston Business School’s MBA, for example, more than halved in the past academic year, falling from 129 students to 59. By far the biggest drop was among Asian students. HEC School of Management in Paris enrolled 181 full-time MBAs in the past academic year compared with 233 the previous one. It is a similar story across Europe. Some smaller schools have been desperately scrabbling around to find the 30 students that some MBA rankings see as the minimum for a course in good standing.

One obvious reason why students might stay away is the dire economy. MBAs can look like a good way to sit out a short downturn. In a longer one they lose their charm. With no job-producing European recovery in sight, going there for an MBA seems not so much cleverly counter-cyclical as stubbornly contrarian.

Europe’s slide also reflects a problem specific to its most important MBA market. The average class size of the British MBA programmes ranked by The Economist has decreased by 11% over the past year. Schools blame Britain’s newly toughened visa requirements for non-EU students. Graduates used to have an automatic right to stay and work for two years. Now, they must find a sponsoring company and land a job which pays at least £20,000 ($32,000) a year. The number of visas available to students wanting to start their own business is piddling.

CambridgeMBA · Answer

@greatps24

Thanks for posting this. I am posting in response to your PM asking me for my thoughts.

I can't speak for the other schools, but now that we have data for the last five years, it would suggest that the intakes in 2009 and 2010 were abnormally high, at least from Cambridge's point of view. The intakes for the last five years were 150,149, 163, 167, 149, 151. So, while our class size went down about 10% between 2010 and 2011, it has gone down to a level that we were in 2008. This could suggest that the 160+ enrollments for 2010 and 11 were the usual class size increase that happens in an economic downturn and now we are returning to the levels before.

Having said that, it does look like the factors mentioned by the Economist have had an impact on other schools. As I have explaned in several posts on this forum, a lot of the visa talk is incorrect. A non-EU student who graduates from a UK MBA program and who accepts a suitable job from a UK employer does not need to go through labour market testing or count against the global quota.

wouldbecrazy · Answer

Conrad, while we understand your position as an adcon but the prevailing sentiment can not be brushed up and ignored.

Visa rule on paper may look 'no worse off' or may be even better but my friend, it does not matter at all. What matters is the perceptions of the recruiters. In private, most recruiter will admit that they percieve the newly added process as hassle and would like to avoid the hassle. It is not so easy to change the perception when there are too many equally good local candidates are availaible. So while interviewing, a recruiter would generally prefer an equal local or even a slightly lesser qualified candidates.... simple that little compromise will help them avoid some 'percieved' hassle. There is no denying that, rest of the things being equal, a local candidate is always more preferred for various reasons, be it language/accent, culture or mixing-up well. Not many companies really bothered too much about diversity like your schools!!

Visa rule in itself is not the last nail but it aggreviate the situation.

The current economic outlook and job outlook in EU is not promising in any scale. Absolutely no green shots are at sight. Probably the most positive news I heard is, it is not worsening further!! So, after spending time, money and energy, you have just 50-50 chance to land in a decent job ... oh no, I am not talking about 'dream job' ... beggers should not be choosers. I said 50-50 chance with full knowledge of school's tall claim of 90% placements ... the reason is simple, you can be one among the 10%, so you have a 50-50 chance to be either in 90% or 10%.

This creates the most important issue that no one ever discussed ........ QUALITY of the students!!

Think practically, do you think anyone doing well/decent in his/her job in this uncertain economic outlook will take the huge risk to leave a proven career? I do not have statistics but my gut feeling is, people retrenched, people in the watch list or dangerous zone and ofcourse the recent graduates will still go for a course. It is quite unlikely that the best performing in the job will think to take the huge risk at the moment. Although really proven and performing people are not a major percentage in business school but generally makes around 10%. These 10% sometime brings the TRUE reality to the boring/academic classroom by sharing their wild experience.

So, there is no denying that the situation at the moment is not so positive, or probably quite gloomy. The only sliverlining or hope is, by Sep 2014 (almost 2 years from now) situation will improve.

If you believe that by Sep 2014 (when you really need a job after your programme) economic situation will be different then go for it.

If you believe that it will take another 2+ years to have any change in economic outlook, then think this way that your GMAT is valid for 5 years!!

Having said that, early birds may get a sweet reward in case of economic turn-around!! Are you ready to take the risk?

by the way, 1 year pass by very fast!!

Leftcoastguy · Answer

wouldbecrazy - Yes, it is too early to determine exactly what the repercussions of the new visa regime might be on job placements in UK schools. From that perspective, you have a point - this  may  negatively affect recruitment. So there is indeed an element of risk involved. I do however disagree with a couple of your assertions. 
 
I have worked as a sponsored worker in the US for seven years so I have some experience with this. This is only a factor is the employer is forced to do a labor market test. You heard Conrad mention this is not necessary according to the current regulations. This means employing a foreign MBA should be not very different from employing a local candidate for a UK employer.

Also, you speak of perceptions and accents and culture and such - I can see this  maybe  being a problem for a local mom-and-pop concern but most of the top tier MBA students are looking to get into global firms that recruit in droves across the world. Those firms have plenty of experience in dealing with different cultures and accents, not to mention HR teams that are very well acquainted with immigration policies. They will therefore be inclined to simply hire the best MBA, not necessarily the best British MBA.

It's been a while since I did my GMAT but this math baffles me. Say in a class of 150, how does any one student have a 50-50 chance of being in the bottom 10 percent? If every candidate's strengths were exactly the same (which by itself is unlikely), wouldn't they have a 1 in 10 chance of that by definition?

My thinking brings me to the exact opposite conclusion. Only the strong candidates would take the risk to leave their jobs in a tough economic climate. Why? Because, over their career, they have picked up enough data points that give them confidence in their ability to find a good job, regardless of the state of the economy.

* Full disclosure - I am interviewing with two such UK schools myself*

wouldbecrazy · Answer

#1 - True for finance and consulting jobs but false for operation kind of jobs. Some jobs require individual skills and some jobs requite team skills. For those operational jobs, FIT is much more important than individual skills.

I stayed in UK and I have seen the perception or phobia of visa first hand. Many of the recruiters first question is "are you EU national"? US is quite open in that sense.

#2 - Search in GOOGLE what does 'dinosaur example' means in probability. If you are one of those unlucky, you will forget all those academic formula!!

#3 - Exceptions are always there but I have quite a few bright colleagues with 700+ GMAT just waiting for the 'best time' to invest their time and money. On the other side, quite a few bottom people, who were retrenched or were in the danger zone joined a programme.

The bottomline is, it depends on your risk appetite and LUCK. For those people who are not so lucky, they try to analyse and try to get some clarity before they embark on some calculated risk. I am raising these questions to get those clarity, which will help many of us.

Leftcoastguy · Answer

#1 When were you in the UK? It is my understanding that until recently, non-EU students did indeed have to undergo the labor market test before being employed in a UK location. But the new immigration law changed that requirement. Perhaps that is why they asked you the question?

#2 Hilarious!

#3 I don't agree but let's say you are right about stronger candidates shying away in tough economic times. It's not like higher ranked universities will just throw their hands up in the air and start accepting the "bottom people". Their acceptance standards do not respond to current market conditions. In that case, they simply shrink their class size, like the article indicates. For this reason, the quality of the student body will remain more or less unchanged, even in your scenario but perhaps some of the real heavy hitters maybe absent.

Having said that, I'm on board with your overall premise. We're dealing with difficult economic and immigration conditions so all prospective candidates should tread with caution.

wouldbecrazy · Answer

#1, You heard of labour market test but never did it yourself and hence commenting superficially. Practically, labour market test was a joke!! You just need to place an ad in a third class news paper that no one reads. Wait for one month and then give an declaration that you could not find any suitable local candidate!! Thats all!! Do you think it was a daunting task, except that wait for one month?

Many innovative companies played with that 1 month period too by placing dummy ad every months!!

Anyway, those market test was not applicable to MBA in first place. Labour test was not applicable then and it is not applicable now, so it is not an issue. MBA's used to get direct HSMP and absolutely no issue in next 5 years, you can change your employer as you wish, not so flexible now, specially after initial 2 years.

Only little diference that I can see is the MBAs are not counted for the yearly quota. But then again, UK quota was never exhausted in the past... no way like the earlier H1 mad rush!!

#2 may appear hillarious to you but that is practical and true from mathematics point of view too. Anyway, many people just scratch the surface and conclude based on that.

#3 ...hmm, I saw even Conrad predicting the same at the start of 2012!! OK, Conrad predicted that for rest of the schools except his own.... and it will be most practical for rest to claim the same.

Economist’s show Europe’s (including UK) MBA charms waning.

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