Employer Demand for MBA Grads Is Healthier Than Ever

by mba

Hunger for talent

Companies hungry for talent are circling around business schools, ready to pounce at the freshly minted MBA graduates. In some industries, demand for new degree holders is so strong that students get job offers right after gaining admission to a programme.

Amid one of the strongest seller’s job markets for business school graduates in recent years, it’s worth exploring the current state of recruitment, some trends, and what all this means for current and future graduates.

MBA hiring expected to remain strong

Following a short pandemic-induced dip, MBA graduate recruitment recovered and is expected to remain robust for years. Nine in ten corporate recruiters expect the demand for business school graduates to increase or remain stable in the next five years – “an indicator that graduate management talent is integral to organisational growth plans”, according to GMAC’s 2021 Corporate Recruiters Survey.

Another piece of good news for MBA graduates is that salaries, which took an expected hit in 2020 due to cost reduction initiatives in organisations, have also returned to pre-pandemic levels, according to the survey. In 2020, the projected MBA median salary declined to USD 105,000 three months into the pandemic. A year later, the median MBA salary reached USD 115,000. This means that the median pay of MBA graduates is 77% more than those with a Bachelor’s degree (USD 65,000) and 53% higher than those hired directly from industry (USD 75,000), GMAC data shows.

Demand from consulting firms is off the charts

Finance, consulting and tech are traditionally the biggest recruiters of business school alumni. Consulting firms in particular are currently among the most active hirers. London Business School’s latest MBA employment report reveals the biggest recruiters of its graduates are McKinsey and Bain.

Competition for talent is so strong that some students are fielding offers from consulting firms before their MBA programmes even begin, the Wall Street Journal reported. Recently, admitted students have been receiving internship offers and even the promise of a full-time job after graduation in 2024. The firms are focusing on MBA programmes with a solid hiring record and come after interviews with the students where they are asked to outline their career goals.

“I don’t even have an ID badge or anything and I could potentially get an offer before I set foot on the campus at NYU,” Nate Hudson, who will start at New York University’s Stern School of Business in the autumn, told the Wall Street Journal.

Business schools on the offensive

These aggressive pre-MBA offers are not the best news for business schools, which are increasingly competing against companies and the bigger salaries they are offering to convince young professionals to skip school and keep working. Employee wages have been growing since 2021 and potential MBA aspirants are finding it hard to walk away from well-paid jobs and return to school full time. Companies have budgeted more money for pay raises in 2022 than at any point since 2008 so they can attract new talent and keep valuable employees, according to the Conference Board, a business research group.

Employer Demand for MBA Grads Is Healthier Than Ever

To keep MBA candidates from walking away after being admitted, universities including Harvard Business School, Carnegie Mellon’s Tepper School of Business and the University of Virginia’s Darden School of Business invited their accepted prospects to campus for sessions designed to demonstrate how the MBA degree can boost their careers.

Virtual recruiting “here to stay”

One of the major trends in MBA employment recruiting is the continued preference for virtual and hybrid activity, according to the MBA CSEA Autumn 2021 Recruiting Trends Survey, which is based on confidential polls completed in January 2022 by 77 MBA Career Services & Employer Alliance (MBA CSEA) member schools.

In-person recruitment events, such as career fairs, are losing popularity at the expense of virtual opportunities at a majority of schools. Most of the summer internships were virtual in 2021, although the number was lower than in 2020 when the coronavirus pandemic was at its peak. According to the report, “virtual experience is here to stay, while in-person activities are slowly returning in a smaller capacity”.

Only a small percentage of schools stated that their students prefer in-person recruiting over virtual opportunities. For many, especially international students, virtual events are much more convenient and are equally as effective as the face-to-face experience.

“Schools and employers continue to adjust to the ever-changing world of student engagement and recruitment, expanding existing programmes and implementing new ones to meet students’ needs. With lessons learned from the past two years, it’s likely that a continued, better form of virtual recruiting will continue well into the post-pandemic world,” the study concludes.

Opportunities in diversity and inclusion

The sharpened focus on diversity and inclusion over the last years is also beginning to have implications for recruiting. Career experts believe diversity is likely to be an important factor for MBA recruiters in 2022 and beyond. This is already evident in many job descriptions which require candidates to demonstrate these core values.

But it’s not only companies that emphasise diversity and inclusion. It turns out that a majority of people looking for work also care about the values of potential employers, according to a paper co-authored by professors Jung Ho Choi of Stanford Graduate School of Business (US), Joseph Pacelli of Harvard Business School, Kristina Rennekamp of Cornell University (US), and Sorabh Tomar of Southern Methodist University (US). In fact, the research showed that some employees would choose to work at inclusive companies over getting a higher salary at a firm that doesn’t share these values.

The push for diversity, however, is not always good for MBA graduates. Facing intense competition for talent and pressure to hit diversity goals, some banks are looking beyond MBA graduates. Citigroup, for instance, said it would start recruiting US associates without banking experience or business degrees. The bank aims to boost its diversity goals by recruiting workers from under-represented minorities and non-traditional backgrounds, hoping that non-MBA candidates will bring different, sector-specific expertise.

The MBA job market is hot and despite recent signs of cooling, the appetite of companies for business school talent is unlikely to be satiated in the foreseeable future. This is a great time to have an MBA degree. In fact, it always is.

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