Finance and Consulting Remain Top Choice for New MBAs
MBAs have a plethora of options from which they can choose, but finance and consulting remain the most common career paths taken by graduates.
If you have decided that you need an MBA, you must have asked yourself some of these questions: Which sectors are most alluring to MBA graduates? How do their professional prospects differ geographically? Where do alumni debut in the corporate hierarchy? These are some important unknowns for candidates that we will try to tackle.
So, let’s say a whole class of soon-to-be MBAs will finish their degree in a couple of months. What are their prospects of landing a position in one of their preferred business sectors? The 2016 Alumni Perspectives Survey Report of the Graduate Management Admission Council outlines the global industries that hire business school graduates. The first two sectors with the highest need for employing MBAs are traditional - products and services, and finance and accounting (19% for each of them). These are pretty broad areas that may include very adaptable firms. The third sector that comes close with 17% is more concrete - technology.
The future will show how sustainable the technological boom is, but the need for talented leaders indicates the rapid pace of this area’s devolvement. Both analysts and businessmen are talking about the third industrial revolution (mechanical manufacturing and the moving assembly line in the 18th and 20th century being the first two). It seems, at least for the moment, that the assumption that technology holds the key to the future may hold true.
The abovementioned GMAC survey sounds representative enough. It was conducted in October and November 2015, and its findings were derived from 14,279 alumni from 70 business schools worldwide. It also shows that 63% of alumni work in three fields: 24% of them - in finance and accounting, 21% in marketing and sales and 19% in general management.
Finance and consulting still most popular
Before we dissect the most popular industries among MBA graduates, let’s take a brief look at internships, because the readiness to hire MBA interns denotes the programme’s value to employers. GMAC surveyed 179 employers from 31 regions/countries and found that 73% of them offered internship opportunities to MBA students. Why is this important? Sometimes an internship may lead to a job within the company or tilt the balance towards being hired by another company later.
Check out: Top Industries for MBA Grads
An MBA degree increases the chances of employment. The GMAC 2015 Global Management Education Graduate Survey reveals that 68% of the part-time/flexible MBA jobseekers from 2015 received job offers before finishing their degrees, as did 63% of the two-year full-time and 36% of the one-year full-time students.
The top three favourite industries for full-time MBA students vary slightly, depending on the length of the programme. For the one-year MBA, finance/accounting (26%) is the most preferred field, followed by products/services (23%) and consulting (19%). The two-year full-time students’ favourite spheres are finance/accounting (24%), consulting (22%) and products/services (19%). The discrepancy is very slim and may fall within the statistical margin of error. The part-time/flexible MBA students prefer products/services (26%), consulting (17%), finance/accounting (14%), technology (14%) and health care (13%).
As we already said, the IT boom also increased the demand for employees with business education in the technology sector - 93% of tech firms said they wanted to hire MBA graduates. Many business schools realise that increasing technology within businesses is more than a temporary phase in the development of the modern-day economy.. On the contrary - it is a direct reflection of how companies will appear and conduct business in the future. Douglas M. Stayman, Associate Dean for MBA programmes at Cornell University, explains about the Johnson Cornell Tech MBA: “Primarily, this is an MBA about the digital economy. The campus is about the digital economy and how the digital technology and informational revolution is changing the way business is being conducted. The traditional MBA, like the traditional engineering college, was built for a certain kind of economy and a certain kind of corporation and a certain way of doing business. And Cornell Tech was developed because the way products are developed, the way they are tested, the way they are brought to the market, the way they are managed, is changing.”
Energy and utilities, and the technology sectors show the highest preference for hiring MBAs, followed by products/services (86%) and finance and accounting (84%). Moreover, 81% of consulting companies, 81% of manufacturing companies and 75% of health care and pharmaceutical companies also say they need MBA alumni.
Business education and international careers
One of the focal points in taking the decision to go to business school is the possibility of using the degree as a passport to an international career. But which world region is likely to be most receptive to expatriate job candidates? In 2015, the Asia-Pacific companies were most inclined (43%) to hire international students. They were followed by 28% of employers in the US and 23% of recruiters in Europe. Behind the dry numbers, one must take into account the strength of the concrete national economy and the overall entrepreneurial culture and spirit that make the life and hiring of expatriates easier. On a more micro level, the individual profile of companies also matters - due to their dealings with worldwide businesses, finance and accounting (38%) and consulting (36%) firms were most welcoming to international candidates.
Another interesting topic is relocation. In principle, international education gives you a chance to transfer your career - 69% of the candidates hired outside their home country had an international graduate business degree, the GMAC data shows. But, at the same time, almost nine-tenths (88%) of MBAs in the world remain in their home country. This means that relocation still remains an exception.
Check out: Spotlight on the MBA Graduates
The US seems most conservative in this respect. Just 3% of Americans with an MBA work abroad. Of course, this may also mean that the conditions for MBAs in the US are particularly good. In comparison, 29% of Europeans go to a different country. Of course, given the specifics of the single European market, it is understandable - an alumnus from Sweden may relocate to Denmark, or one from France to the UK. The GMAC polls show that most alumni from Central and South Asia (55%) prefer to move, albeit within their own region.
Positions, size of companies and entrepreneurship
It is common for MBA graduates to perceive their education as a career accelerator. Almost three quarters (73%) of them believe that taking the degree led to faster career advancement. In addition, 8 out of 10 claim that it prepared them for leadership posts. An important question is where, on the corporate ladder, do MBAs start after graduation? Globally, most graduates begin at mid-level (46%) or senior-level (31%) positions. The exceptions are the ones who skyrocket to executives (13%), and the C-suite (3%) - CEOs, CFOs, etc. Fewest of all (7%) start work in entry-level positions. According to GMAC, 23% of graduates with business degrees other than MBAs start work in entry-level posts compared to just 4% of MBA holders.
We now come to the subject of company size. It shouldn’t really matter how big a company is. Depending on personal preferences, one may feel better in a smaller start-up or a boutique firm, or in a larger, more established organisation. The highest proportion of alumni (30%) work for large firms with 25,000 or more employees, 20% for companies with between 100 and 1,000 staff, 19% for firms with a workforce between 5,000 and 25,000, 16% for entities of between 1,000 and 4,999 people and the remaining 15% for companies with fewer than 100 people.
The self-employed are a very special group among alumni. One in every ten graduates is self-employed. These are entrepreneurs with a high level of autonomy who also report high job satisfaction. While 65% of employed MBAs say that they are satisfied with their work, 81% of the self-employed say the same. Average working hours for this group is 49 hours per week and the average pay of entrepreneurs is 145,000 USD per year. For those who want to depend on themselves, an MBA with a specialisation in entrepreneurship might be a suitable choice. Here, unsurprisingly, the greater the leaning towards autonomy, self-reliance and freedom, the greater the responsibility.
This article is original content produced by Advent Group and included in the 2016-2017 annual Access MBA, EMBA and Masters Guide under the title “Old-Timers & Golden Classics”. The digital guide file will soon be available for download.