Pay packages for MBAs who graduated over the last decade are continuing to grow as the global economy appears to be on the mend, according to new research released today (Feb. 10) by the Graduate Management Admission Council (GMAC).
The median base salary for business school alumni in the survey topped $94,500 last year, significantly above the pre-recession level of $89,000 recorded in 2007. No less crucial, said GMAC, 93 percent of respondents to the most recent GMAC Alumni Perspectives Survey were employed. This was up from 90 percent of participants in the council’s 2009 alumni survey and just below the 95 percent mark seen in 2007.
THREE OF EVERY FOUR STUDENTS IN THE CLASS OF 2011 ALREADY HAVE JOB OFFERS AT BOOTH.
Though the survey measured the outcome for the Class of 2010, all indications are that the next crop of MBA graduates are seeing an ever better job market this year. At the University of Chicago’s Booth School, for example, 75 percent of the MBA students in the forthcoming Class of 2011 already have job offers—up ten percentage points from this time a year earlier. On-campus recruiting activity is up 20 percent over last year, while job postings are up by 30 percent, according to Stacey Kole, deputy dean of Booth’s full-time MBA program.
Career services officials at many top business schools are reporting much the same thing (see “MBA Jobs: From Dark Days to Today’s Bright Present“). “We are seeing an extremely sharp uptick from virtually every sector that recruits our MBAs,” says Pulin Sanghvi, director of Stanford’s Career Management Center. “Most employers are coming back with sharply higher hiring numbers. There are parts of the economy right now that are really booming, particularly in tech, and that boom is creating even more jobs from the ecosystems around these companies.”
In a statement accompanying the new GMAC report, GMAC CEO Dave Wilson said, “Employers around the world tell us they place great value on business school graduates—and these strong compensation figures provide strong evidence to support that conclusion. The message is clear: A quality management education positions people well to thrive in today’s highly competitive, knowledge-driven job market.” GMAC’s latest alumni survey, conducted in September 2010, drew responses from 3,490 business school graduates who earned their degrees between 2000 and 2010.
GMAC’s pay data on last year’s graduating MBA class, along with the highly positive anecdotal reports on the significantly improving job market for MBAs, contradicts recent naysayers who have been quick to write off the degree. Only two weeks ago, in The Economist, the author of “What They Teach You at Harvard Business School” was arguing that the degree’s value has gone down. “More and more students are finding the promise of business schools to be hollow,” wrote the book’s author and Harvard MBA Philip Delves Broughton. “The return on investment on an MBA has gone the way of Greek public debt.”
Not quite. The new data reveal a continuing upward trend in compensation for business school graduates. GMAC said median base compensation among survey participants rose to $94,542 in 2010, up from $91,500 in the 2009 survey, $90,000 in 2008 and $89,000 in 2007. The median bonus in 2010 was $17,565, compared with $10,000 in 2007.