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MBAs Switching Careers At Massive Rates

When Rob Schoder arrived in the San Francisco Bay Area in July, he boasted a new, shiny MBA from an elite business school and a robust network, but only about a year or two of part-time startup experience. Despite not having much experience in a professional bubble saturated with top talent and obsessed with things like “hacking” and “disrupting,” Schoder certainly wasn’t unemployable.

He had actually turned down multiple offers before graduating from the Chicago Booth School of Business last spring. The former history major turned executive search associate from the Midwest knew what he wanted — an operations role at an early- to mid-stage startup. So Schoder tapped into the network he’d built both within and outside Chicago Booth, spent the first few weeks in San Francisco bouncing from multiple meetings and interviews a day, and within a month landed what he wanted.

Once a recruiter scouring professional networks to find the next CEO, CFO, or board director for Fortune 500 companies, Schoder is now happily eight weeks into an operations gig for a bona fide Bay Area venture capital-backed software startup called Flexport. And his story is not totally uncommon. Using the MBA and a network he pieced together, Schoder did exactly what droves of top-talent young professionals are doing: He completely reinvented his career and jumped industries and functions.

Data released exclusively to Poets&Quants from TransparentMBA, a career platform specifically for MBAs, confirms what many have believed and known to be true for years — the MBA is likely the most powerful career-changing graduate degree on Earth. According to the data, which includes over 1,100 data points largely from recent graduates of the most elite U.S. business schools, 87% of MBAs switch either functions or industries in their jobs directly before and after B-school. Some 69% switch both functions and industries. Individuals using a full-time MBA from an elite B-school to accelerate their current career paths are in the significant minority.

“To me, it confirms what most people expect, which is the full-time MBA is a career-switching platform,” says Kevin Marvinac, co-founder and COO of TransparentMBA, adding a caveat that the data does not include executive or part-time MBA programs. “Chances are, if you are doing the full-time MBA, you are going to switch that career.” Plus, Marvinac notes, switching into higher-paying roles that are more specific to interest areas and functions immediately after an MBA likely leads to what TransparentMBA data previously showed in reporting by Poets&Quants: about an 82% increase in wealth and 58% increase in job happiness.

TRANSPARENTMBA DATA CONGRUENT WITH SCHOOL-SPECIFIC DATA

The new data confirms what career services directors at MBA programs have noticed for a while. “When the MBAs are here, the strongest interest is around pivoting or switching,” says Maeve Richard, assistant dean and director of the Career Management Center at Stanford’s Graduate School of Business. Stanford GSB, Richard says, does “informal polling” of their entering MBA students to get a sense of how many want to explore, switch, pivot, or accelerate their careers. Generally, she says, about 80% indicate interest in exploring, switching, or pivoting. “They’ve had about four years of work experience, plus or minus a year or two experience, and they want the MBA to enable them to do something else,” she says.

This year, for the first time, Richard and her team collected similar data for the graduating class of 2016. According to the self-reported data from graduates seeking employment, 56% switched industries, 61% switched functions, 52% switched geographical location, and 44% switched their level of responsibility. Some 83% changed at least two of those four areas — and 45% changed at least three. Both of those figures, of course, fit within the 69% switching both industries and functions reported by TransparentMBA.

At Dartmouth’s Tuck School of Business, Jonathan Masland, director of Career Development, says the broad data is “not surprising” and something Tuck “definitely” sees. “The punchline is, lots of people are switching industries and functions. There is no doubt about that,” Masland says. “That speaks to why people do an MBA and the value of the degree.” Similar to Stanford GSB, Masland and his team also do an informal poll of how many people plan to switch jobs. For the eight years he has been in the role, he says a majority of students have indicated a desire to switch.

Maggie Tomas, director of the Graduate Business Career Center at Minnesota’s Carlson School of Management, confirms what the West and East coast schools are seeing. “I don’t think it’s that surprising,” Tomas says of the data. “I think that’s one of the things that’s appealing for an MBA.” Tomas and staff also do a career intake form that asks incoming MBAs to indicate their plans before they even arrive on campus. At least two-thirds indicate interest in “switching” or “creating,” she says, while another third are looking to “accelerate.”

TRACKING INDUSTRY-SPECIFIC CHANGES

While the broad switching might not be a surprise, Marvinac and TransparentMBA have gone deeper, tracking industry switching. For example, 21% of the recently graduated MBAs reporting coming from consulting. In their first roles after B-school, the number ticked up to 25%. Just 3% of the population reported having pre-MBA jobs in investment banking, but 11% reported taking investment banking roles immediately after B-school. “Consulting does a really good job of retaining people through the MBA,” concludes Marvinac, noting that many consultants use the MBA as a “career augmenter.” But, he points out, “with other careers, it’s increasingly not the case.”

  • Thanks for a great post. It would be great for you to include posts about EMBA programs as well as expand to coverage outside the United States.

  • Spartan 22

    In most cases you’d do a stint at a MC firm first. However, some companies are happy to take a flier on someone with the smarts/talent that they can in turn develop for purposes of internal mobility and/or prep for business units. Samsung’s a pretty good example.

  • Q

    The “Where Pre-MBA Consultants Go” only adds up to 90.

  • Jenny

    Question. Say I am an engineer who wants to do corporate strategy or corporate development. Why would a company hire me with 0 experience in the field and not get an MBA who has prior WE in the area?

  • We would also love to get school specific stats. There just are not enough datapoints yet. As the platform grows with more MBAs registering and providing info, the more likely TransparentMBA will be able to breakdown the data into schools.

  • somsquared

    Great article. Would love to get school specific stats on this stuff. I know at Cornell Johnson we have a lot of students going from Deloitte to MBB, so basically a career switch going from operations consulting to pure strategy. I think there are roughly 35-40 cases of this in the past 2 years.

  • Thanks for pointing this out. As John said, our software has been buggy. This has now been updated and reflects the accurate career path data. Please let us know if you see any other discrepancies in this (or any other) article.

  • JohnAByrne

    C. Taylor,

    Sorry about that. We’ve been having some problems with the software we use to generate tables and charts. We’re on it, however, and finding a quick solution. Thanks for your patience.

    Best,
    John

  • C. Taylor

    Hey guys, the tables don’t seem to match the article for some reason, e.g.:

    — “67% of post-MBA investment management roles are filled by pre-MBA investment managers. Another 17% come from investment banking,”
    — “Pre-MBA Investment Managers Go To: Consulting 65%, Corporate Strategy 17%, Investment Banking 18%”
    — “Post-MBA Investment Management Roles Come From: Consulting 67%, Operations 17%, Marketing 17%”

    Maybe a few row titles were switched?