The MBA has really become a global currency, with companies increasingly joining the hunt for MBA talent. The perennial MBA recruiters - investment banks and consulting firms - have returned to campus in full force. Current MBA candidates can anticipate even more job opportunities and higher salaries when they graduate.
The class of 2008 is looking at a pretty fast payback on their MBA investment. The good news, which is certain to appeal to the ones considering earning an MBA degree, is that the current job market is strong. Employers have renewed their confidence in the economy and this leads to a healthy recruiting environment. Most surveys predict a huge demand for MBA graduates in the next few years as the global marketplace gets more and more interconnected.
New MBAs were commanding significantly higher salaries in 2008 than in 2007, with salaries up more than 4 percent. Thus, the average starting base salary is $92,000, according to new research from the Graduate Management Admission Council® (GMAC®). European MBA salaries even slightly exceed North American ones. With the job market heating up, companies are ready to propose higher salaries and bonuses. Experts say this trend should last well into the future.
Those taking an MBA can expect a payback on their fees within two to three years. If an MBA is taken in the U.S the payback period is just more than three years. Even if we take into account the forgone salary, in three years after your MBA you will get a return on your investment. For a one-year European MBA, the payback period may be only two years.
Two-thirds of MBA job offers include signing bonuses that average $17,603, according to GMAC. Bonuses serve to compensate the expenses spent on MBA studies. By offering bonuses and compensation packages, companies are competing for the most prominent and talented MBAs.
In 2006 new MBAs enjoyed strong bidding for their qualifications and services. This is partly due to the fact that the number of graduates remains stable whereas the number of MBAs being hired has been increasing. More MBA graduates are finding jobs while still in school. Thus, there is a considerable increase in the average number of offers received by MBA undergraduates. Fifty-two percent of respondents to the 2008 GMAC Global MBA® Graduate Survey said they had received or accepted a job offer before graduation, compared with 50 percent in 2007.
GMAC researchers also found that most MBA students feel their investment in business school was worthwhile. About two-thirds of respondents to the survey rated their degree as an outstanding or excellent value and another 29 percent said it was a good value. Students revealed that they based their opinions about the value of their MBA on factors such as the quality of the curriculum, their ability to develop key skills and abilities, and the culture of the school they attended. When assessing their investment in graduate business education, 6 percent of participants in the survey said they placed strong emphasis on the potential to increase their financial well-being.
In addition, the survey found that MBA graduates are, on the whole, interested in the kinds of jobs that employers say they would like to fill. For example, nearly half of the respondents said they hoped to land a mid-level position—the type of position for which recruiters say they are most likely to be hiring. The greatest percentage of students said they are interested in working in the finance/accounting industry, followed by the products/services and consulting sectors.
ESADE Business School in Barcelona has seen the number of consulting firms and investment banks on campus increase by 50 percent McKinsey hired around 90 INSEAD graduates. Internships are hugely important for companies, which is the reason why more and more resources are dedicated to internship recruiting. On-campus recruiting this past fall was even more competitive than the previous year. Among companies which are going to campus are boutique players from asset-management firms, hedge funds, and private equity firms, as well as smaller consulting firms. Also, some retail companies have instituted more aggressive MBA recruiting techniques.
Several cases were reported when undergraduates received a full-time offer from a particular company in spite of having previously declined an internship offer from the same employer.
However, students and recruiters view internships differently. Students have competing objectives when making their choice and they view an internship as an opportunity to experience a different industry or employer. Corporate employers are more focused on building the full-time candidate pipeline. Of the 61 percent of this year's survey respondents that reported receiving a full-time offer from their internship employer, only 40 percent said they planned to accept it.
”An MBA is first and foremost an investment in yourself and in your future. MBA students benefit from a high financial return on investment through salary growth after graduation, as well as enhanced career opportunities. They also enjoy a non-financial return on investment with the new skills and broader perspective they acquired during their MBA, a creative approach to solving problems, innovative ideas, improved performance, a valuable network and lifelong friendships. An MBA truly is the door to excellent personal and employment opportunities.”
Pipsa Ylänkö, Marketing Manager, MBA Programs, Nyenrode Business Universiteit “Incoming students don't look as closely at price as they do at quality” says Jim Pavelko, Assistant Dean of Finance and Administration at the UC Irvine. "It's an investment in yourself. As long as they get that quality, I don't think they're as worried about the price." Gregory Touret, a 29-year-old who's now a managing director at GIFT Ventures says: "If I had to pay twice that money to have that [same] result, I'd have done it anyway."
In turn, schools take students’ needs into account. Many programs increased scholarship aid to top applicants. At Thunderbird (The Garvin School of Business Management in Arizona), new scholarships allowed 26 percent of the class of 2007 to receive some aid, versus15 percent of the previous class. According to Business Week, the UW Madison MBA program is ranked among the best for investment return. It gives students the fourth-fastest financial return in the nation.
On average, the UW class of 2008 each paid $186,800 for their MBA and started earning salaries $42,343 higher than before obtaining their degree. A graduate could break-even in four and a half years, not counting lost income for full-time students. The top three schools with the fastest return are: Brigham Young University, Marriott School of Business; Michigan State University, Eli Broad College of Business; and University of South Carolina, Moore School of Business.
According to a study by the Graduate Management Admission Council (GMAC), most graduating MBAs are "very positive" about the value of their degree compared with the monetary cost of earning it. Prof. Michael Nimier, President of the American University of London, says the MBA degree is more than a perfect way to increase salary or to enhance career opportunity. Prof. Nimier says an MBA is, "the most popular business qualification in the world" because it has become "a prerequisite for most management decisions." Patrick Molle, President of EM Lyon Business School, says you need to: "Consider how one's salary progresses post-MBA as against how one's salary would have progressed if an MBA was not undertaken."
Ronald S. J. Tuninga, The Director Dean of the Maastricht School of Management states: "In today’s global economy MBA is a great investment. The MBA degree is one of the few programs with global recognition.” An MBA is definitely a ticket to success.
If you are still hesitating on whether to invest in your MBA studies, keep in mind that MBAs have never been more popular. Applicants worldwide get more and more confident in the value of the MBA degree they hold. Each year over 100,000 students sign up for MBA programs. With an MBA you will advance your salary greatly in your current MBA job or you will be able to apply for a new job in a field that will offer a more competitive salary.
Consequently, graduates experience less tension after graduation, as they receive multiple job offers long before they accomplish their studies.
"Unofficially, companies like DaimlerChrysler (DCX), McKinsey, Goldman Sachs (GS), and others are telling us that they see strong hiring through 2008 as well," says Samer Hamadeh, co-founder and CEO of Vault, a New York-based company that provides industry information to job seekers.
Top consulting firms are the most active MBA recruiters and are extremely successful in hiring MBAs. They advertise their compensation structure, job perks and other benefits. Moreover, consulting offers a rare opportunity to continue learning while increasing experience and exposure.