Whoever says the economic recovery has been tepid hasn’t been to a business school campus recently.
Two new studies–of the latest graduating class of B-school students and of the corporate recruiters who hire them–show that renewed optimism among employers is leading to more job offers for MBAs. The only disappointing news was that median starting salaries were slightly down–$90,000 in the U.S. vs. $92,000 in 2011. The Graduate Management Admission Council (GMAC), which conducted the studies, said such slight declines are not uncommon in post-recession years.
GMAC reported today (May 21) that 62% of newly minted MBAs and other management education grads said they have job offers, up from 54% a year earlier. No less impressive, some 79% of companies surveyed by GMAC said they plan to hire MBAs this year, up from 72% in 2011. Moreover, the average number of planned new hires per employer increased to slightly over 17 in 2012 from 13 last year. GMAC said that hiring expectations were greater the larger the company. On average, those with fewer than 1,000 employees plan to hire 6.1 MBA candidates, compared with 24.2 MBA hires for large companies.
At the low point of the MBA job market in 2009, employers had originally told GMAC they expected to hire no more than 5.8 MBAs so the latest data reflects a three-fold increase from those dark recessionary days (see table below). “Given that companies have consistently underestimated their expected number of new MBA hires for the past few years, the employment opportunities for class of 2012 graduates could be greater,” GMAC said.
The survey results also showed that while companies intend to employ more MBAs, they also plan to hire fewer bachelor degree graduates and fewer experienced hires. GMAC said the companies surveyed reported that they would hire 52.5 undergraduates this year, down from 59.8 in 2011, and 79 experienced professionals, down from 134.5.
All across the board, the news on the MBA job front was extremely positive–the best since the Great Recession crashed the MBA employment market in 2009. Nearly four in five companies plan to hire at least one MBA candidate in 2012, according to GMAC. This is up from 72% in 2011 and 50% in 2009. Employer reasons for hiring are also encouraging. Sixty percent of survey respondents report they continually seek new graduate business school talent and more than a third expect to hire to replace staff (37%). Furthermore, among those hiring in 2012, 36% will be hiring because of an increased workload and 14% because an increase in profits will allow them to hire more staff.
Average Number of New MBA Hires Expected to Hit 17.4 This Year
These companies, with fewer than 1,000 employees each, accounted for the largest proportional increase in demand for graduate management hires among the 1,096 global companies surveyed.
Typically, students in the Class of 2012 who had already received a job offer when responding to GMAC’s survey said they submitted about nine resumes, had four interviews, and received an average of two offers of employment. GMAC said the data suggests “they expended less effort and achieved a higher job offer yield than Class of 2011 graduates with job offers, who submitted an average of 16 resumes, landed six interviews, and received the same number of job offers. Students graduating in 2012 who still were seeking employment at the time of this survey submitted an average of 13 resumes and landed half as many interviews (2) as their peers with job offers.
Employers in some parts of the world expressed greater confidence than firms based elsewhere, reflecting the unevenness that characterizes the global economy. On average, companies in the Asia-Pacific region and the United States expect continued growth in hiring in 2012 for all management graduates, whereas European companies project that hiring levels in 2012 will be similar to what they saw in 2011.
Across the board, leadership and management skills topped the list of skills employers want in their new management graduate hires. Employers also want new hires that are able to organize and combine information from multiple sources to solve complex problems and make sound judgments. These data analysis and high-level integrated reasoning skills were noted as particularly important to companies looking to hire graduate management students.
Employers in the U.S. expect to pay MBA graduates substantially more in 2012 than new hires with only a bachelor’s degree. This translates into annual earnings for new MBAs that are $40,000 higher, on average, than the salaries bachelor’s degree-holders can expect, the data show.
Among students who had at least one job offer at the time the survey of graduates was conducted in February and March, full-time MBAs saw the largest gains between pre-MBA and post-MBA salaries (81 percent). This is up eight points from last year.
On the student side, the most popular industries in which class of 2012 graduates looked for jobs were products and services, consulting and finance/accounting, according to the Global Management Education Graduate Survey. The products and services sector yielded the fewest job offers for this year’s graduates, but also saw the highest increase in salary from pre-degree to post-degree earnings (75 percent).
Percentage of Firms That Hired Or Plan To Hire New Employees–By Candidate Type
In an industry attractiveness index developed by GMAC, more graduates are switching out of the finance/accounting sector than are switching into it in 2012. Despite graduates’ highest success rate in landing a job in the manufacturing sector (76 percent), the manufacturing industry is seeing more graduates leaving the industry than switching into it.
Industry Hiring Trends
GMAC said that more companies across all industry types plan to hire recent MBA and Master of Accounting graduates in 2012 than did last year.
· Technology: The proportion of companies intending to hire recent MBA graduates is expected to increase 22% in 2012, compared to 2011. Additionally, there are notable gains expected in the proportion of companies hiring Master in Management graduates (+19%) and Master of Accounting graduates (+15%) in this sector.
· Nonprofit/Government: There is substantial growth in the proportion of companies planning to hire other specialized master’s in business graduates (+64%) and Master in Management graduates (+52%). In addition, more companies in the nonprofit/government industry plan to hire MBA graduates in 2012 (+19%).
· Manufacturing: Within the industry, the largest proportional gain by new graduate degree type is expected for Master of Accounting degree holders (+48%). Master in Management graduates were also in demand by a greater percentage of companies (+12%). The largest drop in demand both within the manufacturing industry and across all industries was observed in the share of companies hiring graduates from other specialized master’s programs (–12%).
· Health care/Pharmaceuticals: Growth in the proportion of companies that intend to hire was most notable for graduates of other specialized master’s in business programs (+37%), Master of Accounting graduates (+28%), and Master in Management graduates (+24%).
· Products/Services: Increased hiring projections in this sector are particularly strong among the proportion of companies that plan to hire Master in Management graduates (+22%) and Master of Accounting graduates (+17%).
· Energy/Utilities: Growth in the proportion of companies planning to hire was spread among graduates of other specialized business master’s programs (+19%), Master of Accounting graduates (+17%), and MBA graduates (+14%). The industry also indicated a drop in the proportion of companies planning to hire Master in Management graduates (–8%).
DON’T MISS: WHAT COMPANIES ARE PAYING MBAS THIS YEAR