MBA Employment Outlook on the Mend But Still Challenging, GMAC Survey Finds
The job market for new business school graduates remains difficult, but there are clear signs that employers are becoming increasingly confident about the economy -- and more eager to hire -- according to newly released data from the Graduate Management Admission Council (GMAC).
The percentage of employers planning to hire newly minted MBAs is up this year compared with 2009, although the number of new hires per company is expected to decline slightly, GMAC researchers found in their annual survey of recruiters. Approximately 55 percent of respondents to the GMAC Corporate Recruiters Survey said they planned to hire new MBA graduates in 2010, reversing a sharp drop in 2009, when the comparable figure fell to 50 percent from 59 percent the year before. Graduates of other types of master's-level business programs also should see their prospects improve in 2010, the survey data suggest..
"Employers have spoken clearly. The intrinsic value they place on the skills people develop in business school does not rise and fall just because the economy does," said Dave Wilson, president and CEO of GMAC, an international non-profit association of leading business schools and owner of the Graduate Management Admission Test (GMAT), used by thousands of business schools as part of the admissions process. "Management talent is always critical to the well-being of any organization, and as conditions improve, employers will find ways to acquire more of that talent."
The top industries in terms of predicted job opportunities for MBA graduates in 2010 are consulting and health care. Positions in marketing and sales are likely to be most plentiful, followed by finance-related slots in areas other than investment banking.
Percentage change in MBA opportunities by industry sector worldwide in 2009
Source: QS TopMBA.com International Recruiter Survey 2009
Employers expect to pay a significant premium for MBA talent. The average starting salary recruiters plan to offer new MBAs this year is $80,508, nearly twice the $41,860 average salary people with only a bachelor's degree can expect to receive. In addition, 59 percent of U.S. companies plan to offer signing bonuses to new MBA hires in 2010.
In a particularly positive development for job-seekers, the survey indicates that employers are shifting away from an emphasis on cost-cutting and retrenchment and paying more attention to growing their businesses. Sixty percent of respondents said they planned to expand their customer bases in 2010, up from just 49 percent a year ago. Meanwhile, the proportion of respondents concentrating on cost-cutting as a key organizational goal dropped from 66 percent in 2009 to 57 percent in 2010. Improving performance remained the top priority for survey participants.
The findings of a separate GMAC survey indicate that employer optimism may take a while to translate into actual job openings. The percentage of graduates from full-time two-year MBA programs who had an offer of employment prior to finishing school dropped to 40 percent in 2010 from 50 percent the previous year, according to the latest GMAC Graduate Management Education Graduate Survey. The number of job offers reported by survey participants in these MBA programs who did land positions declined about 13 percent. Still, students graduating in 2010 were slightly more optimistic about the economy than people in the class of 2009.
At the same time, there are a number of signs that the MBA job market could improve, albeit slightly, in the coming months and a growing sense of optimism prevails among career services officers, says Kip Harrell, president of the MBA CSC. According to his group's survey, full-time MBA job postings appear to be rebounding; 34% of schools reported an increase in full-time postings this fall. And, perhaps even more importantly, fewer schools are reporting declines, with 48% of schools seeing a reduction in full-time postings, as compared with 70% of schools last year.
The still-shaky job market is a bitter pill for many MBA students, who came to B-school 18 months ago in the hope that the recession would be long gone by graduation and are now finding that it isn't. The surge in B-school applications at the start of the downturn was one of the biggest on record, as many fled the uncertainty of the job market for what they viewed as a surefire career boost and six-figure salary. Today, that all seems like a cruel joke, but on campus a fragile optimism prevails. "We are seeing signs that the economy is turning around, so the mood at business schools now is that everyone is waiting with lots of hope," says Harrell.
Another bright spot is that internship opportunities for first-year students may be bouncing back. In the survey by the MBA CSC, 31% of career services officers say they expect internship recruiting activity to be down, while 33% expect it to be up and 36% expect it to be flat. Last year at this time, 62% of career services officers said they expected internship activity to be down.
"It is definitely an improvement over last year," says Harrell, vice-president for professional and career management at the Thunderbird School of Global Management (Thunderbird Full-Time MBA Profile). "We do expect the internship process to run longer than usual this year, with some just-in-time internships coming up going into the summer."
The GMAC Corporate Recruiters Survey, conducted in cooperation with the MBA Career Services Council and EFMD (European Foundation for Management Development), reflects responses from 2,367 employers representing 1,960 companies in 57 countries. The GMAC Graduate Management Education Graduate Survey collected data from 5,274 graduating students at 147 business schools around the world. Both surveys were conducted from mid-February to mid-March. Reports about the surveys are available online at www.gmac.com/surveys
The Graduate Management Admission Council (www.gmac.com) is a nonprofit education organization of leading graduate business schools worldwide dedicated to creating access to and disseminating information about graduate management education. GMAC is based in McLean, Virginia, and has a European office in London. The GMAT was created in 1954 and is used by more than 4,800 graduate management programs at nearly 1,900 business schools around the world to assess applicants. The GMAT -- the only standardized test designed expressly for graduate business and management programs worldwide -- is currently available at approximately 500 test centers in over 110 countries. More information about the GMAT is available at www.mba.com.
SOURCE: Graduate Management Admission Council