MBA Job Market Better But Not Great

by John A. Byrne on

This year’s crop of MBA grads fared much better in the workplace with significantly higher rates of placement than the Class of 2009. That’s the early conclusion of a new BusinessWeek study out today (Nov. 4, 2010) on the job and pay stats of BW’s top 30 business schools in the U.S.

This year, on average, about 12 percent of graduates at the top 30 schools, or one in eight, still hadn’t received even one job offer by the three-month mark, reported BusinessWeek. The magazine said this is an improvement from last year, when one in five students were jobless three months after graduation. Salaries are flat or down at 23 of the 30 schools, with starting pay averaging $97,049, inching up only $549 from 2009. Meanwhile, the much-coveted signing bonus has also seen a fall from favor, with 23 of the schools reporting that the percentage of students with jobs receiving signing bonuses is down, some by 20 percentage points or more from a year earlier. The BusinessWeek report is culled from school surveys completed in preparation of the magazine’s biennial rankings which come out next week on Nov. 11th.

Some schools mounted nothing less than extraordinary comebacks. The University of Texas at Austin had the largest single turnaround. Only seven percent of its Class of 2010 were without jobs three months after graduation, compared to 21 percent in 2009, an improvement of 14 percentage points. The most positive story belongs to Dartmouth College’s Tuck School of Business. In 2009, 14% of the MBAs were jobless after three months. The school scored an 11 percentage point turnaround this year to have the best results of any of the top 30 schools. Just 3% of this year’s class failed to have jobs three months after graduation–the best rate of any school. The three big prestige schools known for producing large numbers of grads for the finance industry–Columbia, NYU and Wharton–each had eight percentage point improvements in their job stats. Columbia went to 6% without jobs from 14%; Wharton to 13% from 21%, and NYU to 10% from 18%. Other major schools with big year-over-year gains for their graduating students include Emory University’s Goizueta School of Business, where only 7% (versus 18% a year earlier) of the Class of 2010 was without jobs three months after graduation.

The biggest shock: A full third of this year’s graduating class at Southern Methodist University’s Cox School of Business were without jobs three months later. That’s even worse than the 27% jobless number of a year-earlier, despite a fall of $6,000 a year in median starting salaries to $81,000 this year from $87,000 in 2009. It was the worst performance of any school in BusinessWeek’s top 30 list. The magazine said that a spokesman for Cox attributed the continual decline to turnover in its career services office.The University of Maryland’s Smith School of Business also lost ground. This year 19% of its graduating class were without jobs three months later, compared to 13% in 2009. And while Duke University’s Fuqua School of Business improved its job stats by five percentage points, a shocking high 19% of the Class of 2010 was without jobs three months after graduation. The jobless rate remained stubbornly high at Michigan’s Ross School, with 22% of the Class of 2010 out of work three months out–the same percentage as it reported in 2009.

School 2010 Without Jobs* 2009 Without Jobs* 2010

Salary

2009

Salary

1, Dartmouth (Tuck) 3.0% 14.0% $105,000 $105,000
2, Ga. Institute of Tech 3.2% 15.0% $85,200 $85,000
3. Harvard 5.0% 8.8% $110,000 $114,000
4. Columbia 6.0% 14.0% $100,000 $100,000
5. Washington Univ. (Olin) 6.0% 8.0% $85,000 $90,000
6. MIT (Sloan) 6.5% 12.8% $110,000 $110,000
7. Texas-Austin (McCombs) 7.0% 21.0% $95,000 $95,000
8. Emory (Goizueta) 7.0% 18.0% $90,000 $91,000
9. Stanford 7.0% 10.0% $120,000 $120,000
10. Yale 8.0% 8.0% $100,000 $96,000
11. Chicago (Booth) 8.9% 13.5% $102,300 $100,000
12. New York Univ. (Stern) 10.0% 18.0% $100,000 $95,000
13. Berkeley (Haas) 11.0% 14.0% $110,000 $110,000
13. Northwestern (Kellogg) 11.0% 14.0% $105,000 $105,000
15. USC (Marshall) 11.2% 19.0% $94,000 $95,000
16. Carnegie Mellon (Tepper) 11.2% 14.0% $95,000 $100,000
17. UPenn (Wharton) 13.0% 21.0% $110,000 $110,000
18. Vanderbilt (Owen) 13.0% 19.0% $88,000 $95,000
19. Virginia (Darden) 13.0% 18.0% $100,000 $100,000
20. Brigham Young (Marriott) 13.4% 17.0% $88,000 $90,000
21. Washington (Foster) 14.0% 19.0% $85,000 $83,000
22. Indiana (Kelley) 15.0% 28.0% $89,144 $92,000
23. UCLA (Anderson) 15.0% 20.0% $100,000 $95,000
24. UNC (Kenan-Flagler) 15.8% 29.0% $95,000 $95,000
25. Cornell (Johnson) 16.0% 24.2% $96,000 $95,000
26. Notre Dame (Mendoza) 18.0% 19.0% $90,000 $92,500
27. Duke (Fuqua) 19.0% 22.0% $100,000 $100,000
28. Maryland (Smith) 19.0% 13.0% $85,625 $85,000
29. Michigan (Ross) 22.0% 22.0% $100,000 $100,000
30. SMU (Cox) 33.0% 27.0% $81,000 $87,000

Source: BusinessWeek

Of the ten schools reporting declines in median starting salaries for their MBAs, SMU, Carnegie Mellon, and Vanderbilt had the biggest drops. At Vanderbilt, median pay for a graduating MBA fell by $7,000–the largest decline–to $88,000 this year from $95,000 in 2009. At Carnegie Mellon, median pay fell by $5,000 to $95,000 from $100,000 a year earlier. Other schools reporting smaller declines were Harvard, Washington University’s Olin School, Emory, USC, Brigham Young, and Indiana.

Of the eight schools reporting increases in median salaries, NYU, UCLA and Yale reported the largest increases. MBAs at NYU and UCLA saw their median pay packages increase by $5,000 to $100,000. Yale’s Class of 2010 saw a $4,000 rise to $100,000 from $96,000 a year earlier. Other schools reporting increases include Chicago’s Booth School of Business, the University of Washington’s Foster School, and Cornell’s Johnson School of Business.


  • Arthur Dullsworthy

    What is BW’s source for this data? Is it available online?

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    Arthur,

    The data was provided by the schools to BusinessWeek. There is a link in this story to a slideshow featuring the data on BusinessWeek’s site.

    Best,
    John

  • Arthurdullsworthy

    Yeah, followed the link but found no data. I find it hard to believe there’s data because 1) Harvard and Wharton won’t turn over graduate and alumni data; 2) information for 2010 doesn’t seem to be on the school websites I’ve checked; and 3) it would be extremely difficult to compile a 90 days after graduation survey of all these schools for a true apples to apples comparison.

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    Believe it. I started the data collection at BusinessWeek in the late 1980s and then supervised it into the late 2000s. The reason why schools haven’t yet put up their full employment reports is because they contain a lot more information than percentage of grads with jobs three months after graduation and starting salary.

  • Arthurdullsworthy

    What about Harvard and Wharton?

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    The data for Harvard and Wharton in the table above was provided by Harvard and Wharton to BusinessWeek. At Harvard, median starting salaries fell by $4,000 to $110,000, and 95% of the Class of 2010 had jobs within three months of graduation. At Wharton, median starting salaries remained stable at $110,000, and 87% of the Class of 2010 had jobs within three months of graduation. Both schools improved their three-month placement records. At Harvard, the year-earlier percentage was 8.8%; at Wharton, it was a very high 21%.

  • Arthurdullsworthy

    I was under the impression those two schools weren’t complying with BW’s requests for data.

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    Not true at all.

  • Arthur Dullsworthy

    Didn’t Harker and Clark pull their schools out of the rankings? When did that change? Also, the data seem riddled with discrepancies. For example, BW shows Tuck’s 2010 class 97% employed 90 days after graduation at a median salary of $105 thousand, which exactly matches the BW median salary number. But their website reports 85% employed as of September 30, 2010, although September 30th was more than 15 days later than graduation plus 90 days. Perhaps these are only the 85% of survey questionnaires returned? But it would be strange if no one who returned a survey questionnaire was unemployed. The assumption has to be either that the percentage unemployed is 15% or that they’re only reporting the best 85% of known outcomes as of September 30. Presumably, the median has to fall as more survey returns are added into the mix. 97% employed at $105 thousand is simply impossible if Dartmouth is telling the truth on their website.

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    Arthur, you raise a point worth noting. Every school which reports these numbers–even in their own official employment reports–bases their numbers on the grads who respond to the school. No school has a 100 per cent response rate. In most cases, 80 per cent of their grads respond which is pretty good. If BusinessWeek were to rely on it’s own survey of recent grads at each school, the sample size would be closer to a 55 per cent response rate.

  • Arthur Dullsworthy

    But John, Dartmouth shows every one of the 85% of respondents is employed both on September 30th 2010 and on September 30th 2009. Only Bernie Madoff wouldn’t consider numbers like those impossible. On the other hand, if I look on Wharton’s website, 80.3% of the class in 2009 reported they had accepted employment as of September 30, 2009. But 5.1% of that class were returning to the employer. This leaves only 14.6% to be unemployed on September 30, 2009 if I treat all the nonrespondents and “starting their own business” types as genuinely unemployed (as I’d be disposed to do). 14.6% is a lot less than 21%. Not sure about the Harvard numbers. There’s a huge swing in the number of company sponsored types from 14% (final) 2009 to only 3% (provisional) 2010. I doubt that admissions made a huge policy change in 2008.

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    So you’re thinking that something is definitely fishy with the Tuck numbers? I can check with Tuck to see what they say. But the much smaller size of the graduating class at Tuck also allows the school a lot more control over the placement of each student. On the other hand, as you know, I often make the point that rankings largely based on data provided by schools need to be viewed in light of possible fudging because some schools simply fudge the numbers. I find it highly unlikely that Tuck would do that, but I know for a fact that some schools do because I’ve had a large number of B-school staffers come to me over the years with accusations that their schools are not reporting accurate and truthful numbers.

  • Arthur Dullsworthy

    Tuck was 1st on the list, so I looked at their numbers. And data is hopelessly messy stuff — I don’t expect clean and consistent descriptive statistics coming from several disparate organizations. Tuck’s own website, however, shows 100% employment for survey responses from 85% of the class on September 30, 2009 and September 30, 2010. The median salary reported by Tuck for 85% of the class in 2010 was $105 thousand (which agrees with BW), so if 97% really were employed on that date I’d expect the median salary for the full class to be somewhat less than $105 thousand. Harvard’s website shows about 8% in categories I’d consider unemployed and that’s before the mysterious effect that somehow produced a swing from 14% to 3% company sponsored/returning to employer between 2009 and 2010 (more like a swing in the other direction during the year). Also, don’t forget that more than 85% of Wharton’s class of 2009 was employed by September 30, 2009. That’s much less the 21% number provided by BW. I can’t look at any of these numbers without a sense that at least a month of quality MBA (or GS analyst) time is required for analysis and reconciliation.

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