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Why More Applicants Are Retaking The GMAT

Source: GMAC analysis, July 2016

Source: GMAC analysis, July 2016

HIGHER SCORES ALSO FIGURE INTO SCHOLARSHIP AWARDS AND SOME JOB OFFERS

Dan Bauer of The MBA Exchange

Dan Bauer of The MBA Exchange

Dan Bauer, founder and CEO of The MBA Exchange, another leading admissions consulting firm, agrees. “Over the past five years, average GMAT scores have increased at 17 of the top 25 ranked business schools,” he says. “For example, Wharton’s average GMAT for the class entering in fall 2015 was 732, up from 718 in 2011. This mass escalation surely motivates serious MBA candidates to use multiple testings to achieve higher scores, especially since they can simply cancel any disappointing results along the way. So, why stop trying if ‘one more GMAT’ could boost your score and make your application more competitive?”

In some cases, increases in the average GMAT scores at leading schools have been steep. Northwestern University’s Kellogg School of Management, for example, has boosted the average GMAT for its incoming two-year MBAs by 16 points in the past six years to 728 this year, putting the Class of 2018 at the 96th percentile of all test takers,  from 712 in 2011, when the class was at the 91st percentile (see GMAT percentile chart below).

Abraham also notes that GMAT scores frequently figure into scholarship awards and in some highly competitive industries internship and job offers. “Taking the test multiple times, can pay off big time,” she says. “Among the most popular employers of MBAs are consulting and financial services firms. The more elite among them want to see a 700+ GMAT. If you see yourself going into those fields, that requirement creates pressure to take the test until you get the score you want.”

Source: GMAT Total Score percentile rankings are based on three years of GMAT exams taken from 2011 to 2013

Source: GMAT Total Score percentile rankings are based on three years of GMAT exams taken from 2011 to 2013

Moreover, there is no downside to taking the test multiple times, other than the time or the $250 cost. “Responding to competition from the rival GRE test, owners of the GMAT made dramatic changes that enable MBA applicants to, essentially, ‘game’ the test-taking process,” believes Bauer. “Individuals can see and cancel a disappointing score within 72 hours, with no record of that cancellation reported to the schools. And cancelled scores (since January 2014) can be reinstated at will. In addition, the waiting period between repeat GMAT attempts is only 16 days vs. the previous 30 days, so test takers can and do take more attempts as application deadlines approach. In fact, there is no longer a reason against taking multiple tests. One’s ‘batting average’ is almost certain to improve if no one is calling strikes.”

A MASSIVE ARRAY OF PREP RESOURCES MAKES PREP EASIER AND CHEAPER

Bauer also points out that today there is a massive array of prep resources and solutions. “Google the term ‘GMAT preparation’ and you’ll find over 641,000 results. Enough said. The variety of tutors, tools and tips is simply overwhelming,” adds Bauer. “The choice of delivery vehicles – from traditional books to in-person instruction to customized e-learning platforms – offers something for everyone at every price point. Today, improved test-taking skills and customized strategies are within reach of everyone on the planet. So, applicants understandably believe that their GMAT scores can almost always be improved though more prep — and more testings.”

The GRE also offers a post-GMAT safety net, according to Bauer. “Many applicants try and try again, but still can’t achieve a competitive GMAT score,” he says. “However, as long as they don’t report those results to business schools, such individuals can simply walk away from even a series of sub-par GMAT results and make a fresh start with the GRE. So there’s no need to throw in the GMAT towel prematurely. Furthermore, most schools don’t report their “average GRE” whereas ‘average GMAT’ is not only published but can impact a school’s prestige and competitive rankings. So, the GRE is readily available, last-minute option for applicants who can’t beat their dream school’s average GMAT score after multiple tries. ”

Ultimately, there may be another factor at work behind all the repeat GMAT testing: The popularity of admission consultants. “I think that the other factor that is driving this are us, the admissions consultants,” concedes Alex Leventhal of Prep MBA Admissions Consulting. “We have a crew of clients and we want to have the best batting average possible so clients are happy and refer. So I think consultants are putting some pressure on too to push clients to do better–and most of the time it works!”

DON’T MISS: AVERAGE GMAT SCORES AT THE TOP 50 U.S. BUSINESS SCHOOLS or AVERAGE GRE SCORES AT THE TOP 50 U.S. BUSINESS SCHOOLS

  • DACochran

    While I understand what you mean (I’m a white American male who got a full scholarship based on a 740 GMAT), I wouldn’t say that business schools are “using” Indian and Chinese applicants.

    That seems to imply some sort of sinister intent of that those candidates shouldn’t have been accepted. My experience working in teams with my Chinese classmates has added significant diversity of thought, an invaluable part of my MBA experience. Similarly, one of my closest friends who has helped me with a class and I’ve helped him with interviews is Indian.

    As someone else noted: if you have a ton of great candidates, why wouldn’t you take the ones with the best GMATs? While it’s certainly not the end all be all of intelligence indicators (I highly doubt I’m in the 3% of people intelligence wise as my score indicates), it’s one tool you can use to compare candidates, both for business school and at least in consulting, for recruiting.

    If, as you note, a candidate who gets a high GMAT gets into a good school, potentially gets a scholarship, then gets a great job, who is really “using” who?

  • test123

    You are assuming that good test takers are not well rounded candidates.

    Maybe good test takers are more well rounded candidates than others and hence they are selected and hence the increase in average gmat scores.

    If a kid has the gpa, the work ex, the extra cur., the references AND a good gmat score, he/she is more well rounded than a kid who has similar credentials except the gmat score.

    Maybe kids from certain countries are more competitive and maybe they take the admission process more seriously and prepare accordingly. Any student who puts in the effort becomes more deserving than other students who don’t.

    Your disdain for admission staff is horrible. They have a task at hand that is directed by ‘high level employees’. They simply follow orders and execute. Mocking them and their job really serves no purpose except consoling yourself for whatever it is they did to you.

  • I agree with John and the data in the article he cited supports the point.

    Furthermore I attended a GMAC conference a couple of years that showed data correlating scores with hours spent studying and prepping. The GMAC reps also showed data on the hours spent studying by different regions of the world. Asians simply studies more.

    Furthermore, my comment on the increase in non-U.S. GMAT takers does not mean or imply that increase is the ONLY reason for the increased average GMAT score. There are others:

    1) Increased use of test prep and perhaps better test prep techniques.
    2) I believe, although I don’t have proof, that those who are not great test-takers are preferring the GRE when applying to bschool.
    3) The GMAT score cancellation policy of the last two years encourages retakes and people on average do somewhat better on retakes (and if they don’t they cancel.)

    As to your point regarding finance professors’ tests. If they are creating different tests as you said above or grading on a curve, you don’t have a valid comparison.

  • I get into this in a comment below. But here’s the reason: Chinese and Indians spent far more time trying to do well on the GMAT exam. The median number of hours that students in India spend preparing for the GMAT is 100, and the median for test takers in China is even a bit greater. Compare that to European students, whose median is 60 hours, and U.S. students, whose median is just 40 hours.

    Besides the extra hours of study, students from these two nations may be more practiced at taking standardized exams. Their access to higher education is often determined by the use of standardized tests. A score can mean the difference between a life in poverty or a ticket to the professional lifestyle. So standardized tests are taken far more seriously in many countries than they are in the U.S. where the stakes on such tests are not nearly as great.

  • Over the past ten years, the growth in test takers from both India and China has been extraordinary. As we explain in the article, students from these two nations may be more practiced at taking standardized exams. Their access to higher education is often determined by the use of standardized tests. A score can mean the difference between a life in poverty or a ticket to the professional lifestyle. So standardized tests are taken far more seriously in many countries than they are in the U.S. where the stakes on such tests are not nearly as great.

    Students in other countries also tend to spend far more time preparing for the GMAT than Americans do. The median number of hours that students in India spend preparing for the GMAT is 100, and the median for test takers in China is even a bit greater. Compare that to European students, whose median is 60 hours, and U.S. students, whose median is just 40 hours.

  • Orange 1

    @MBAPrepCoach. What makes them better test takers? Study habits? State of mind when they are in the room?

  • AP

    Agree with MBAPrepCoach. If you are an Indian applicant, no matter how good your GPA or Grades are, how unique your story is, if you don’t cross the 700 mark, schools don’t really like you. That is why you often see students with 680 or a score like that retake the test.

    Another point which I’d like to make is this – in the US News ranking, GMAT scores count for 10-15% of a school’s total score. In my opinion, schools are mainly using Indian and Chinese applicants to inflate these scores. What also works in the school’s favour is the fact that these high-GMAT students often accept jobs in the tech industry where there is high demand.

  • Indian Dude

    The article explains GMAT scores by county, but it does not mean that a certain ethnic group of students is responsible for the increased GMAT scores. I have talked with multiple finance professors at Top 20 business schools who collected and tracked data on student performances on their exams over the past 10 years. The median scores all stayed relatively the same during that 10 year period with very little deviation. Since GMAT scores are going up, it would stand to reason that the median test scores over 10 years would go up as well. These professors are creating new questions and new problems. The main reason that GMAT scores are increasing is that almost all students are taking prep courses. 10 years ago, fewer students took prep courses. Over the past 10 years, these prep courses have improved their algorithm and content, so that when a student takes MGMAT test or a Magoosh GMAT test– it is very similar to the GMAT. MGMAT tests are probably harder than the actual GMAT in the quant section. The GMAT, however, has not changed its algorithm in the past 10 years. If you are taking 6 to 7 simulated practice exams that harder or very similar to the GMAT, actual GMAT scores will increase over time because students know how to take the test.

  • deferan

    It is really sad to see how the race for higher GMAT led for acceptance of the best “Test Taker” rather than the best well rounded candidates. You know most kids now start taking the gmat during the undergrad and they practice it hundreds of times to get the +700. Not only to get accepted but for the scholarship money. On the other hand, most admission people are low level employees that have limited view and lack the good skills to beyond rigid numbers (otherwise they would not have landed these low level jobs anyway).

  • This article on GMAT scores by country explains some of it, for sure.

    http://poetsandquants.com/2014/01/04/why-53-countries-beat-the-u-s-on-the-gmat/

  • Indian Dude

    I disagree with this point. Let me make this clear– Asian and Indians are not the reason why GMAT scores are increasing. Using your deductive reasoning skills, what other explanations are there?

  • Another related point is the increasing percentage of Asian students taking the exam and the declining percentage of Americans. Asians tend to have higher scores. I don’t remember the exact point in time, but up until roughly ten years ago, most GMAT-takers were from the U.S.

    Those increasing percentages have increased the average GMAT score and also raised the requirement for the groups best at test-taking.

  • Very good and relevant point. Thanks for making it.

  • MBAPrepCoach

    I think another relevant piece to this is that overrepresented Chinese and Indian applicants are excellent test takers. If you belong to one of those groups and do not get a 700 + score, youre kind of behind the 8 ball, and likely to retest to become a viable competitor.