The full impact of the Covid-19 outbreak on the world economy is yet to unfold. Although no two crises are alike, it may be helpful to recall how business schools fared in the aftermath of the economic crisis more than ten years ago and what career prospects alumni faced then.

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Surge in MBA applications

A series of credit shocks and bank collapses that started in 2007 resulted in a deep global recession followed by a decade of slow recovery. Providing a snapshot of the situation back then, the International Monetary Fund (IMF) said that “the global economy is in a tough spot, caught between sharply slowing demand in many advanced economies and rising inflation everywhere.

Against this gloomy background, applications to MBA programmes increased globally. GMAC, which owns the MBA admissions GMAT exam, tried to make sense of it. “Because searching for a job may take months of time and effort, some people choose to temporarily leave the workforce in turbulent economic times and pursue further education full time in the hopes of re-entering with newly acquired knowledge and abilities when the economy is strong again, and unemployment rates are lower,” GMAT said in its 2008 Application Trends Survey. It was a clear sign that interest in business education tends to increase amid economic hardship.  

The statistics strongly suggest that business professionals see schools as a haven from a difficult job market and a springboard for future success. In 2008, 77% of full-time MBA programmes reported that they received more applications than they had in 2007, according to data compiled by GMAC. The year 2009 was equally difficult for the economy, but not for business schools as professionals kept applying to MBA programmes in hope of extending their knowledge and skill set. Nearly 70% of one-year full-time MBA programmes reported an increase in the number of applications compared with the previous year. What is more, 66% of flexible MBA programmes -- on-campus courses that combine both full-time and part-time options for students -- reported year-on-year growth in applications.

Read: Business Schools or Schools of Business

MBA graduates after the crisis

So, what happened to all those students who decided to pursue graduate management degrees in times of a global recession? A Bloomberg Businessweek survey of 15,050 MBA alumni has tried to answer this question. The poll is based on the analysis of graduating classes of 2010, 2011, and 2012 from 126 business schools around the globe. In general terms, it found that, despite entering an unstable job market, most found work after graduating. At the beginning, some went to industries that were not their first choice, but later, as the global economy recovered, many found what they wanted.

One of the most interesting findings was that the financial services industry, which was hit hard by the crisis, accounted for more jobs right after the MBA graduation than any other industry. One possible explanation is that, despite sector-wide layoffs, financial institutions were still seeking to hire fresh MBA talent. Maria Ponce, who joined JPMorgan Chase’s leadership development programme right after obtaining her degree, told Bloomberg Businessweek that the bank continued hiring despite ongoing job cuts. “What I witnessed was laying off of the excess—in terms of that middle band of people who had been there for a long time, that were kind of static in their jobs—and sort of a resurgence of bringing in either young, new talent or top talent.”

Banks were not alone in their pursuit of newly minted MBAs in the difficult years after the crisis. In 2013, for instance, 75% of companies said they planned to hire MBAs, up from 71% that hired in 2012, according to GMAC data.

Even more surprisingly, pay was unaffected by the crisis, especially for graduates from the top schools. Not only that, it actually increased. According to data collected by the Financial Times, students from the top 100 MBA programmes in its annual ranking, who enrolled in 2008 and 2009 and who graduated in 2010, saw their salaries double in the years up until 2014.

Covid-19 and MBA alumni

No one knows what will happen once the ongoing crisis is over. There are a lot of voices claiming that the world is never going to be the same again. We are yet to find out what it will actually look like and what exactly the implications will be for business schools and MBA alumni.

Right now, schools are trying to keep their academic operations intact while ensuring that prospective students are able to submit their applications. So far, they have been doing a good job. Alumni, on the other hand, know that their career prospects are closely linked to the impact the outbreak has on the economy.

Whatever the future holds, business schools and their alumni have every reason to be optimistic. They managed to weather the last major crisis. If history is any guide, they will be able to overcome this one, too.