London Takes First In BW Global Ranking

The Canadian business schools took a beating in Bloomberg Businessweek's 2016 international MBA ranking but was it justified?

The Canadian business schools took a beating in Bloomberg Businessweek’s 2016 international MBA ranking but was it justified?

Only 12 months ago, Bloomberg Businessweek proclaimed that the best MBA program outside the U.S. was in Canada at Western University’s Ivey Business. But in today’s new international ranking, Businessweek apparently has had a change of mind. Ivey slid nine places to finish 10, replaced by London Business School.

As MBA rankings go, that is one of the most dramatic declines to ever befall a No. 1 school. What caused the drop? According to Businessweek, Ivey fell from first place to sixth in its highly flawed survey of MBA employers. Ivey also slipped in Businessweek’s student survey, salary and job placement ranks, though improved its position in an alumni survey from 18th to 13th

In fact, every Canadian business school lost ground on the list, essentially suggesting a sample problem with the employer survey, especially when three MBA programs in Canada fell nine positions in a single year. Queen’s University’s Smith School of Business dropped nine places to finish 18th, from ninth a year ago; the University of Toronto’s Rotman School of Management fell five places to rank 23rd, from 18th in 2015; McGill University’s Desautels Faculty of Management lost nine places, dropping to 25th, from 16th a year earlier, and HEC Montreal slipped two spots to place 31st, from 29th.

EMPLOYER SURVEY RESULTS TO BLAME FOR DRAMATIC CANADIAN TUMBLE

In each downfall, declining positions in Businessweek’s employer survey appeared to be the culprit. Queen’s Smith School fell 13 spots in that portion of the ranking to 15th, from its lofty second place finish a year earlier; Rotman fell six places to ninth, from third; McGill lost a dozen positions to drop to 29th, from 17th, and HEC plummeted 10 plaes to 31st from 21st among employers.

For prospective MBA students, the drop in Canadian schools is oddly ironic. At a time when there are student visa issues in the post-BREXIT Britain and when U.S. President-elect Donald Trump is publicly discouraging immigration to the U.S., the Canadian schools are among the most welcoming to international students due to the country’s pro-immigration policies. If anything, Canadian business schools are in the best position in years to pick off the best and brightest student immigrants interested in an MBA degree.

London only had to move up one spot from last year’s ranking to claim first. Not far behind on the 2016 list was INSEAD, Oxford Saïd, Cambridge Judge, and IESE Business School in Spain. Oxford had to move up three places from sixth to gain its third place finish, while Cambridge climbed four spots to rank fourth. It was the first time that London won the No. 1 spot in this ranking since 2012 when the school’s full-time MBA program last topped the list. In that year, Ivey Business School ranked seventh.

Among other big movers, Melbourne Business School jumped 14 places to finish ninth this year, up from 23rd a year earlier. Imperial College London gained five spots to rank 15th.

INTERNATIONAL RANKING BASED ON SAME METHODOLOGY AS U.S. LIST

This year Businessweek ranked 31 full-time MBA programs outside the U.S., two more than last year. The magazine said that the new results are based on surveys of more than 1,000 recruiters, 15,000 alumni, and 9,000 recent graduates. The international ranking follows last month’s release of the magazine’s U.S. ranking (See 2016 Bloomberg Businessweek MBA Ranking Of U.S. Schools).

The international ranking is based on the same methodology as Businessweek’s U.S. list. This way of ranking full-time MBA programs, adopted last year, puts a 35% weight on a survey of MBA employers who are asked to identify just ten schools and assess the track record of graduates in their companies. INSEAD won this contest, followed by London Business School, Oxford, IESE in Spain, and ESMT (European School of Management and Technology) in Germany.

A survey completed by school alumni accounts for 30% of the ranking and is based on the increase in their median compensation over their pre-MBA pay, job satisfaction, and their opinions of the MBA experience. The top alumni survey winners were Oxford Saïd, IE Business School in Spain, Cambridge Judge, SDA Bocconi in Italy, and the National University of Singapore. Businessweek then adds in a separate student survey of recent graduates that is weighted 15%. That survey includes 27 questions that contribute to a school’s rank. IMD in Switzerland topped the student survey this year, followed by INSEAD, Melbourne, London Business School, and Cambridge Judge Business School.

IMD WAS RANKED FIRST IN SALARY, MANNHEIM FIRST IN JOB PLACEMENT

Finally, Businessweek tosses in two metrics from school reports: the job placement rate three months after graduation and starting salaries, each counting for 10% of the methodology.

IMD was first in the salary category, largely because its graduates are among the oldest MBA students in the world and therefore have more work experience to leverage in a salary negotiation. IMD students reported the highest pre-MBA salaries, averaging $80,000. London Business School was second, followed by HEC Paris, the University of St. Gallen, and INSEAD. In job placement, the top school this year was Mannheim in Germany, with ESIC Business & Marketing School in Seville, Spain, next, then London Business School, CEIBS in China, and Imperial College London. Oddly, INSEAD was 25th in job placement out of the 31 ranked schools, with 81.6% of graduates employed three months after graduation (compared with 92.7% at London or 97.9% at Mannheim).

So what was behind the major tumble by all the Canadian schools? The methodology behind Businessweek’s employer survey where something as simple as response rate for a school’s recruiters or sample error can cause less-than-credible movements in a MBA program rank. This is especially an issue because the sample of employers is not controlled to insure that the same people are responding each year. Instead, you can get a completely different set of respondents from one year to the next.

PROBLEMS WITH A FLAWED METHODOLOGY TO RANK SCHOOLS

This has become a much greater problem ever since the magazine changed its method of surveying MBA recruiters in 2014. Instead of sending a single survey to each major MBA employer—to the corporate official who oversees MBA hiring—Businessweek surveys every recruiter who comes on a business school campus, getting these lists from the schools. However, most companies sent to the schools alumni who work for them. So having alumni fill out these surveys causes significant bias in the sample. This change forced Businessweek to concede that alumni tended to rate their own schools “significantly more favorably than non-alumni.”

In 2016, Businessweek sent surveys to 11,877 recruiters for the international ranking. Some 1,055 at more than 500 firms returned the survey, though there are probably no more than 250 firms worldwide that actively recruit MBAs at more than half a dozen schools.

The alumni and student surveys also are less than a true measure of a school’s quality because respondents know their answers will impact their alma mater’s standing in the ranking. As a result, they are likely provide less-than-candid answers. That bias occurs across the sample but it is a fact that every year several schools have hard-to-explain scores that seem to defy logic. A few disgruntled alums or students, moreover, can also have a disproportionate impact on the satisfaction rates in the alumni and student polls.

BEST EMPLOYMENT RATE: MANNHEIM; HIGHEST MBA SALARY: IMD

Even so, users of rankings rarely read the fine print and organizations that rank programs rarely, if ever, point out the limitations of their lists. So most prospective students eyeing these rankings will take them at face value.

Some of the most revealing data in the Bloomberg Businessweek ranking is employment rates three months after graduation as well as salary and average debt. International business schools are generally less transparent than their U.S. counterparts with basic statistics on the health of their MBA programs. The new data–largely collected from alumni and students–shows that the best programs for employment are Mannheim, ESIC, London Business School, Imperial College London, and IE Business School (see table on following pages).

When it came to post-MBA salary, IMD led with average salaries of $150,000, $20K more than London Business School and $30K more than INSEAD. And whose graduates racked up the most student debt? The University of Toronto’s Rotman School of Management where average debt totaled $73,000, followed by London Business School where student debt averaged $70,000.

  • SL

    Elsewhere in the UK. The Brexit vote where I am was 52-48 in favor of Remain. To be fair, Brexit was also a reaction against EU immigration. They’re probably less concerned with Asians finding refuge from the H1B lottery.

  • MBA

    So there are as many MBA grads landing jobs in Europe as Latin America from a European business school!! That is very significant and actually proves my point.

    How else do you explain the vast discrepancy between the PPP salaries and absolute salaries? Also don’t forget that Mexico is often included as part of North America so you can add that in there too.

  • tamix

    Why did you pick Bloomberg? why not FT global MBA ranking, which clearly indicates that IE weighted salaries are higher than both IMD and LBS, and second only to INSEAD! It is the most credible ranking because it is audited by a professional auditor.

  • tamix

    Based on the latest employment report, 32% landed jobs in Europe, 11% in North America, that total of 43% ! more than 31% that went to LATAM. I think your point is invalid.

  • MBA

    I personally don’t think a school such as IE competes with any of the Top 15 schools on any meaningful level unless you want to work in Latin America/Spain. The fact that IESE is more highly regarded in Spain and Europe also serves to undermine any claim that IE is truly top-tier.

    Like CEIBS and HKUST, IE continues to do very well in rankings because it places many of its graduates in low cost of living areas in Latin America so PPP adjustments benefit it hugely.

    Look at the latest Bloomberg International MBA ranking and you’ll see that IE graduates earn 40-50% less on an absolute basis compared with INSEAD, IMD, and LBS. This means IE is more of a developing world targeted MBA.

  • charles

    Thank you for your reply. I am again sorry for any inappropriate words. Here is why I do think that IE is in the same league of INSEAD and LBS: For me, the most accurate ranking is the P&Q ranking, last year, it placed IE as the #4 worldwide, but when you look into the common thing among these three schools, INSEAD, LBS, and IE, you will find that EACH one of them is ranked in the top 5 worldwide by EACH ranking that composite the P&Q. This common strong fact is enough evidence for me that these three schools are the top 3 outside US. Another fact, is the employment reports of these schools, it is exactly the same top employers recruit at all of them with varying numbers of recruits. There is of course an area of strength for each school, INSEAD in consulting, LBS in Finance, and IE in technology with special and obvious strength for latin america.

    again, sorry for previous replies, but your statement of “in fact I am really not smart enough to get a HBS offer” is very very provoking and absolutely wrong. The fact that you are here in P&Q means most likely that you know MBA, you have a good undergraduate degree, and you have good exposure to the business world, so, you are unquestionably admittable to HBS, Stanford, or any good school. You should have said “not lucky enough” instead.

  • Dan

    Interesting figures, especially when compared with the data which FT publishes. Some of the gaps are strikingly big, considering that there is only 2 years (and variable compensation components) between both data points.
    IMD, 3 years out, PPP-adjusted, salary only (FT): 157k
    IMD, 5 years out, PPP-adjusted, total compensation (Forbes): 226k
    Whereas data for other schools are very similar:
    IE: 165k in FT, 175k in Forbes
    Cambridge: 156k in FT, 169k in Forbes
    Oxford: 138k in FT. 150k in Forbes
    Definitely strange.

  • Koichi Fuyumi

    I am a bit surprise why you can get so mad when I lay out facts and arguments to prove why IE do not belong to LBS and INSEAD’s league. So I go back to read my reply again. I guess the major reason is the “I” used in the blanket was intended to refer to me, Koichi Fuyumi. But after reading it again, I guess that may be from English point of view, this “I” might lead to connection to the “I” in the previous sentence and make it looks like pointing to everybody who don’t got an offer from HBS. I apologize for my poor English writing ability, non-native speaker is not an excuse. I should improve my English.

    However, the way you replying, when you favorite school IE got questioned, is not trying to lay out more facts and arguments to support your view. Instead you chosen to attack people by saying things like “I wish you speedy recovery” to cover your inability to response to an argument. I don’t think it is an effective way to defend your favorite school. I was even thinking are you intentionally to destroy IE’s reputation by acting an immature IE supporter who failed to response to the point and trying to move around to escape from challenges.

    Anyway, I am less interested to discuss yours or mine personality. If you have more facts to prove IE belongs to LBS/ INSEAD league, I am looking forward to learn from it. Otherwise this discussion lost its value and I am not gonna waste time onto it. But thanks for your input anyway, although they are not very useful to me.

  • charles

    I am sorry that my reply make you “upset”. Your argument about who is smart and who is not is interesting. Anyway, and for your information, the admission directors at HBS, Stanford, and Wharton were in panel few years ago, they all agreed that almost 90% of the applicants they receive, rejects and admitted, are all admittable and high quality people. They never said, and I have never heard a reasonable person who said that if you did not make into HBS or Wharton, then you are not smart!! Just hint: try to get rid off this sickening attitude, it is very damaging and destroy personalities. With regard to the IE, it is great school and definitely and by all measures it is tier one and prestigious institution. it does NOT need your praise.

  • Koichi Fuyumi

    I feel upset that I type a 500+ word reply and only one sentence with a blanket which is not the main objective of the discussion can catch your attention and reply. I should further improve my writing ability.

    BTW, I know, and I understand most people use a term “exceptional case” to describe those cases

    I also think it is a bit naive to consider people who earn an offer from HBS with 490 GMAT or with undergraduate “not smart”.

    In fact they could be the smartest people because they have to prove themselves by other achievements beyond a 4 hours test (plus 1 week preparation time).

    Please understand GMAT and undergraduate is a just a part of the candidate’s profile. You can still get a HBS offer if you did meaningful things, create impacts and bring values.

    Last but not the least, if you care IE’s reputation, I guess there are better ways to get involve in the discussion than showing you are lack of ability to follow the main topic in a discussion thread

  • charles

    “in fact I am really not smart enough to get a HBS offer”, do you really think so? Do you know HBS accept people with 490 GMAT! Do you know HBS accept people without UNDERGRADUATE degree!! If you assume someone didn’t get into HBS because he/she was not smart enough, then I stop here. I wish you speedy recovery.

  • Koichi Fuyumi

    No offense to IE, but I don’t agree IE is in the same league
    with INSEAD and LBS

    Outside numbers (esp. salary), I got a simple rules on
    selecting MBA programs:

    “#1 in something which HBS cannot compare”, so below school
    can fit into this rule

    Stanford – #1 in West Coast – (I don’t want to go to East
    Coat)
    Wharton – #1 MBA with focus on Finance (I want to get a
    finance job after graduated)
    Booth – #1 MBA with focus on Finance engineering (I want to
    take Eugene Fama’s lesson and become more scientific than those who graduate in Wharton)
    Kellogg – #1 MBA with focus on marketing (I want to get a
    marketing job after graduated and take Philip Kotler’s elective)
    MIT – #1 MBA in technology (I want to get a technology job
    after graduated and meet some brilliant scientist who has a patent but don’t
    know how to sell)
    INSEAD – #1 non US school focus on consulting (I want to go
    to MBB after graduated)
    LBS – #1 non US school focus on finance (I want Europe
    experience and get a finance job in Europe (esp. London) after graduated)
    IMD – #1 non US school focus on industry and executive roles
    (I want Europe experience and get a industry job in Europe after graduated)

    Attending above schools, I can always justify I am doing the
    most tailor-made decision for my career instead of I am not smart enough to go
    to HBS (in fact I am really not smart enough to get a HBS offer); it is always
    sounds better to say I go to Kellogg because I want to focus on a marketing
    career and HBS cannot compare to Kellogg in this area, so I have to give up
    HBS’s offer and go to Kellogg. HBS is good but just don’t fit my needs…

    But if I went to Columbia and IE, it will be very difficult for me to justify. How can I explain to others why I didn’t go Wharton or Booth instead if I want to focus on finance? I can only admit that Iam not good enough to get an offer from Wharton or Booth so I end up goes to Columbia. The same for IE, I cannot explain to people why I don’t go to IESE even if I really want Spain experience

  • MBA

    Sorry just double checked and the average age for IMD’s EMBA is actually 39.

  • C. Taylor

    Apologies for the wording, generally meant cost living adjustment as selected by any given publication. That’s all PPP really is. At the city level would be great.

    @Tamix,

    Graduates of one year programs such as IMD and INSEAD gain a year on two year programs. IMD takes a refined slice of normal MBA applicants to elite programs such as Harvard and INSEAD. Generally, elite MBAs are young professionals who demonstrate potential. The slice IMD takes is young professionals with proven potential–budding executives.

    EMBAs and accelerated EMBAs are for mid-career executives. They target people around 35-45, with the average depending on the program.

  • MBA

    I disagree.

    The average age at IMD is 31. HEC is 30 and INSEAD/LBS/Cambridge are 29. European schools (especially 1 year programs) are generally older than US schools, which tend to hover more around 27-28.

    I’m not saying that the 1-2 year gap between IMD and INSEAD/LBS/HEC/Cambridge is negligible but it’s also not a crazy difference.

    IMD has its own executive MBA program with an average age of 41-42 similar to most other schools.

  • lambda

    There are no tiers in europe. all 15 european schools are same.

  • tamix

    I think IMD MBA is an executive MBA program delivered in full time mode. with average age of 31 to 32 and many aged 37, it is pretty much comparable to Programs for mid career professionals such as USC Ibear MBA program, Stanford MSx. It is unfair to compare it with much younger programs of INSEAD, LBS, or IESE where the avg age, 29, 28, and 27 respectively. This explains the higher salaries they get.

  • MBA

    I think the difference here is that the IMD folks managed to attain a certain level of seniority pre-MBA/without an MBA, which speaks to the quality of the candidates. It’s hard to say whether candidates at IESE/IE/HEC/Oxbridge could have achieved the same but IMD virtually guarantees it.

    For example the current IMD class has someone coming in from BCG and she’s already at Consultant (normally reserved for post-MBA). And you’ll find some Sr. Manager/Director level folks too. You should check out the profile of all current students on the IMD website, it’s one of the few schools that actually publishes everyone’s profile going into the program.

    IMD then puts everyone through an 8-hour assessment day comprised of case interviews, group exercises, role play, case studies, etc. to assess your soft skills and leadership potential. Again, it’s the only school that does this and it guarantees a certain quality of candidates that you won’t get from having an alumnus/faculty interview you for an hour as is done at other schools.

    I didn’t actually know that Forbes was PPP adjusted but as you can see IMD grads earn more than those at any other schools even after adjustment for PPP 5 years out. Only LBS and INSEAD are up there with IMD and then there’s a big gap. This generally aligns with the sentiment in Europe that INSEAD/IMD/LBS are the top 3 in Europe.

    And I think at the 5-year mark, the 2 year age gap diminishes since people would be 34-36 years old.

    Here are the numbers from Forbes for cost of living adjusted salary 5 years out. This is by far my favourite ranking since it focuses on what really matters.

    1. IMD: $226,000
    2. LBS: $210,000
    3. INSEAD: $209,000
    4. IE: $175,000
    5. Cambridge: $169,000
    6. SDA Bocconi: $160,000
    7. IESE: $159,000
    8. HKUST: $156,000
    9. HEC: $152,000
    10. Oxford: $150,000

    Based on this I would say Tier 1: IMD, LBS, INSEAD; Tier 2: IE, IESE, Oxbridge, HEC, SDA Bocconi, HKUST; Tier 3: Everything else

  • C. Taylor

    Glad I could help, Dan.

    Probably the main interest of IMD graduates is career growth opportunities provided by post-MBA positions. Similar to Booth graduates, except a step further down the career path. Compensation and cost of living issues take the back seat. Cost of living comparisons would mainly be done after job offers are made.

    Most employers are very aware of graduates’ value and offer cost of living adjustments according to the location and its appeal.

    I speculate that it may be easier for IMD graduates to get interviews for higher level positions, in aggregate. Employers kind of speak with them with that in mind.

    For any grads placing in Switzerland, living in neighboring cantons/towns is an option as Swiss cities are much smaller than London. Koichi Fuyumi would probably find this preferable.

  • C. Taylor

    Developing world applicants already face uncertainty. They seek a US MBA for the cachet and the potential to place within the target program’s sphere of influence. I do not see either one of those reasons changing.

    Developed world applicants apply to programs like GT mainly for the above second reason. I do not see that changing. People who love the US love the US. Which president is in the office is a little superficial to what they like.

    From what I’ve seen it is easier to get a visa in the US, overall, than to get one in the EU. All sorts of language, cultural inhibition, economic, etc. reasons for this. The deutschsprachiger Raum is an exception for fluent German + English speakers. But the dR isn’t the flashy draw for most. London is.

    Drastic curtailment of visa issuance would be necessary to bring US visas down to the EU level. And Trump’s targeted positions are all pro-immigration.

    You need to understand the US has propaganda in the media, just like Russia. The NYT publicly swore a blood oath in August to keep Trump out of office by any warping of the facts possible. This immigration issue was subject to that leftist onslaught, from then and earlier.

  • charles

    you seem unhappy with IE to place it such low place 🙂 while everyone knows that it is in the same league of LBS and INSEAD..

  • DACochran

    “I do not see such concerns impacting decisions much before policies are actually implemented”

    I think that’s the point (nothing has been implemented): uncertainty will (or at least should) have applicants hedging the risk that President-Elect Trump decides to change immigration law drastically.

  • Dan

    Numbeo is very useful, thanks!

    On a side note, it’s probably more accurate to compare with Zurich – essentially, Lausanne is a little village. Taking Zurich, the spread widens considerably. Bear in mind that Munich is the most expensive city in Germany.

    Anecdotal saying about foreigners in CH: You don’t come to GET rich, you come when you ARE rich 🙂

  • Dan

    Very helpful, information, thanks!

    Your last point is important to consider: If you go to other, high-ranked schools and happen to be as experienced as the average IMD grad (and manage to skip associate level as well), you salary-wise probably get quite close to where these guys end up.

  • Dan

    The placement reports calculate their salaries all in a different way and present data very heterogenously. Specifically, schools use different/unknown dates for spot rate currency conversion. I asked some schools for that date and I can tell you that the conversion rate applied plays a very significant role in presented USD salaries (think of Brexit, Greece-crisis etc.). Frankly, comparing these reports is hardly a reliable source for comparisons.

    Absolute values of compensation tell you nothing about your disposable income post-tax and post living expenses. It is this disposable income you want to look at to determine how many shares, tiffany rings or cars you can buy. If you only look at the income side and ignore expenses and taxes, you miss major factors in the equation. Admittedly, I don’t know any ranking that factors in the tax situation (probably because it’s quite individual), but the living expense factor is covered by PPP normalization, which, by the way, also factors in luxury goods. Again, PPP is an instrument to make purchasing power, including your tiffany rings and cars comparable across geographies.

    Your 25%-rule seems to oversimplify a little. Yes, the topic is quite complicated but this doesn’t do it justice.

  • C. Taylor

    Guys, just to clear it up:

    Forbes is five years out and is PPP total compensation.

    FT is three years out and is PPP salary only.

    Bloomberg (shown #s) is six years, seven years, and eight years out non-PPP total compensation.

    As Dan noted, if you don’t know the regional distribution, non-PPP numbers cannot be compared usefully between MBA programs. PPP allows comparison, then you just pick a program which places people in your targeted geography.

    HSG is fantastic for placement in the deutschsprachigen Raum. As good as any other program across the globe–in the deutschsprachigen Raum. Do need fluent German and English for optimal outcomes.

    If you speak French and work in Geneva, you can commute from France. Switzerland is roughly as expensive as London. Most IMD guys place across Europe, although Swiss employers have strong interest.

  • C. Taylor

    Thanks for your input. I can understand why someone might have your concerns. I do not see such concerns impacting decisions much before policies are actually implemented.

    If you are considering Georgia Tech or Indiana, you are primarily targeting a specific region and probably an industry your chosen program has close ties with. I don’t see people applying to City U (Cass) or Warwick in large numbers where they otherwise would have applied to GT. I could understand some hedging; City U + GT. But in the end, I don’t see such hedging shifting target programs much. Especially if exuberance in the US’s economic potential has staying power.

    Geographically, the broader London area is the leading employer of elite MBAs outside of the US. Brexit is looming and, on the balance, I don’t see Trump’s pro-immigration targets shifting applicants to UK programs.

  • Koichi Fuyumi

    1. My number downloaded straight from school’s placement report

    2. Good discussion on which is a better indicator, PPP or absolute. I prefer absolute for two simple reasons:

    1. I save a quarter of my salary every month (Sorry for folks outside East Asia, I know it is difficult to understand why East Asian save money instead of spending all of them : P), I rather save 100k’s 25% than 70k’s 25% so that I can buy more Google’s share

    2. No matter I live in Switzerland or Egypt, I prefer to use international brands imported goods like iPhone and Porsche and my girlfriend prefer gifts from international brands like Tiffany. PPP applies to salary in MBA ranking but do not apply to shops I visit.

    3. I think it is possible that MBA will more likely getting a job in country where they study. It is because they will have more time to network with the alumni staying close-by and alumni is a key source for MBA jobs. As a result, i think it is fair to move schools located in Spain and Italy one tier down because I cannot think of someone who really want to fight for a job in country with high unemployment rate. And I should move schools in UK and Switzerland where most International companies put their regional HQ there one tier up

    As a result, I think a better ranking is
    1st: LBS
    2nd: INSEAD/ IMD
    3rd: IESE/ Cambridge/ Oxford/ HEC
    4th: IE/ ESADE/ SDA Bocconi

  • MBA

    Munich is indeed cheaper than Lausanne. According to Numbeo, it’s about 55% more expensive to live in Lausanne than Munich.

    That being said, the right answer is to probably use something in the middle between PPP and absolute salaries.

    I think we both agree that a full PPP adjustment is a bit too extreme in penalizing schools that place people in highly developed economies with a high cost of living and boosting schools that place people in places with a lower cost of living.

    On the other hand, I agree that using absolute salary is not entirely fair either since some countries are far more expensive than others and one would need to make more to live comfortably there.

    I actually really like the Forbes ranking there since they make cost of living adjustments based on the city the grads work in but not to the extreme of full PPP.

  • DACochran

    Very fair points but what we know about businesses and businesspeople is that uncertainty is concerning. I think everyone would agree we don’t know exactly what President-Elect Trump will do because we can’t trust he’ll do what he says. If I was an international applicant right now I’d absolutely still target the M7 in the US, however I’d definitely have the top Canadian and European schools on my list as well and put in just as much effort.

    I personally go to a 20-30 ranked US program and I wouldn’t advise international students wating to stay in the US who are not interesting in consulting to go to a program like mine, even though it got me an MBB job with a 50% pay raise from engineering and is an overall incredible experience. I think there’s too much uncertainty around immigration for an international student to assume that most F500 companies will sponsor for the types of roles that students outside of the M7 generally get.

    As I noted, I think consulting is a different story. If an international student has a good profile for consulting and that’s their goal then 10-30 ranked schools are still a great option. Additionally, for anyone with the option to get a great job back home could always try their luck here then head back if necessary. However, again there the 20-30 ranker schools that place well regionally are not likely to have as strong of a brand so that’s difficult too.

    All in all, I think it’s very reasonable for potential MBA applicants needing sponsorship to be very unsure of the immigration situation in America.

  • DACochran

    SL, did you move to London or elsewhere in the UK? Just curious as if I recall the Brexit vote split was pretty pronounced.

  • tamix

    1-2 swiss national only, but those with another nationality beside swiss are many 🙂 b schools manipulate this quite a lot.

  • Dan

    I live in Germany, my partner in Switzerland. I don’t know where you live, but that example isn’t unrealistic.

    Germany’s cost of living is roughly half of the cost in CH. It surely depends on the city but that is my first hand experience, comparing Munich and Lausanne.

    So yes, I do get your point but I still prefer PPP because it creates more of an even playing field.

    Where did you eventually end up?

  • MBA

    That’s an extreme example. Germany’s cost of living isn’t THAT much lower than Switzerland to the point where you would be making 20K less at McKinsey as an MBA grad vs. an unknown company. But I think you get my point that I would rather look at absolute salaries given their shortcomings than PPP salaries given their shortcomings.

  • Dan

    Yes, and they pay a hell of living expenses in Switzerland for getting paid at that level 🙂 PPP corrects this distortion.

  • Dan

    Interesting perspective. If you compare the same position in the same company in different geographies: yes, I totally agree. And PPP distorts here.
    Question is: Do we prefer McK in Germany for 110k or joining whatever-company in Switzerland for 130k? What reflects success in a better way? As you say, absolute numbers as a proxy have limits.

  • Dan

    It’s quite irrelevant how many are actually Swiss. The point applies as long as a significant number of alumni stays in Switzerland post-MBA, thereby inflating the salary figures – and I’m sure that that is the case.
    Considered IMD in the first place but didn’t apply because:
    – blurry employment report
    – unknown brand
    – high costs
    However, my partner lives in Lausanne and I’m there every weekend. Nice place to be, that’s for sure 😉

  • MBA

    FT is not absolute salary. It’s PPP adjusted.

    My absolute numbers are based on IMD employment report for immediately after graduation. Forbes ranking for 5 years after graduation, and Bloomberg for 6-8 years after graduation.

  • Dan

    You said these are absolutes:
    “- IMD candidates are more experienced and accomplished than those at other European business schools”
    I agree. But is that a reason for a candidate to prefer IMD over the other schools? Their statistics are (partly) better because graduates are older. That’s a statistical effect, nothing more. Grads from other schools have 2 years to catch up and this level is what must be compared to IMD’s graduate salaries.

    “- IMD grads earn more in absolute terms upon graduation, 5 years after graduation, and 6-8 years after graduation despite not placing many people in finance”
    FT suggests, salaries are similar and frankly, this is the best data point I think we have.

  • MBA

    Not an IMD alum 🙂 But I did attend their assessment day and have respect of the school based on what I saw.

    Your point above applies only when the class is also comprised of people from the country the school is in. There are only 1-2 Swiss people in the IMD class. We can’t assume that 98% of people change geography to Switzerland after completing an IMD MBA. And if that were the case, it would be extremely impressive.

  • Dan

    Are you an IMD-alum? 😉
    Look, it’s quite safe to assume that each school places a majority of its grads in its home country.
    People in Switzerland make loads of money (High school teachers with no experience make 100k USD, just as a reference) and this is reflected by the salary figures. This is what rankings measure: Salaries.
    Even if only 40% of the IMD grads work in Switzerland (which is quite a low number to assume), this distorts IMD’s salary figures heavily.
    The point is: The fact that Switzerland is a high-income country doesn’t make IMD per se a better school than any other of the aforementioned.

  • MBA

    I agree with you there.

    Which is why I like to look at absolute numbers. Absolute salaries aren’t perfect but can actually be viewed as a proxy for both how prestigious your job is and how desirable the location you’re working in is. If you work at McKinsey in Bangalore or McKinsey in New York, you might have a better standard of living in Bangalore but that does not make you more successful, or your job more prestigious. It also doesn’t mean you’re more likely to be a F500 CEO. In fact it’s quite the opposite.

    The fact of the matter is that the most prestigious and desirable places to work are also the most expensive. PPP adjustments assume the opposite.

  • MBA

    Again, all we know is that 70% of IMD grads work in Europe which is to be expected of a European school. There is nothing to substantiate the assumption that they work in Switzerland specifically. The other schools you mentioned are European business schools that also place many of their grads in Europe. Oxbridge is in the UK which is also a very expensive place to live.

    I may not have data to substantiate my claim that not all IMD grads end up in Switzerland but you also have no data to substantiate that most IMD grads end up in Switzerland. All we know for sure based on the data is that 70% of IMD grads end up working in Europe.

    You’re right that it’s hard to directly compare schools because of the diversity of geographies that grads end up going into. But there are some absolutes:

    – IMD candidates are more experienced and accomplished than those at other European business schools
    – IMD grads earn more in absolute terms upon graduation, 5 years after graduation, and 6-8 years after graduation despite not placing many people in finance
    – 70% of IMD grads work in Europe after graduation

    You can argue “what if an HEC graduate was more experienced and works in a country with a higher cost of living” but that’s not the case.

  • MBA

    Switzerland is just one country in Europe. Yes 70% of IMD grads work in Europe afterwards but that is to be expected from a European business school. This doesn’t mean the majority are in Switzerland.

    I don’t actually have any evidence but I have anecdotally heard that about 40% of IMD grads end up in Switzerland specifically.

    You can’t really compare St. Gallen since the majority of St. Gallen grads would actually end up in Switzerland since it’s a regional elite with a focus on Finance and Banking.

  • Dan

    Your last point isn’t clear to me. How do you know that IMD grads “get paid significantly more” than grads from the other schools mentioned? What does a Cambridge/Oxford/IESE/IE grad earn if he goes to Switzerland and he is of the same age as the IMD grad? And how does the picture change if – all other things equal – an IMD grad goes to London, competing there with an Oxford grad? Does the IMD grad get more money? I highly doubt it and there is no data that proves your point (just because the data situation in general is not deep enough to make that claim).
    What is save to say is: Being a Switzerland-located school pushes a school up just because of the fact that salaries in CH are insanely high, and it’s salaries what is measured.
    I think, the top5 or top7 schools in Europe can’t reliably be grouped into tiers just because the labor markets are so fragmented. IMD works in Switzerland, Oxbridge works (particularly well) in UK, HEC works in France etc. Is one better than another? I don’t know.

  • tamix

    One thing is sure, if the employment results are great they would have highlighted it and provided very detailed statistics. When they mix and leave things unexplained, then people will automatically assume the bad things. Employment results are the ultimate indicator of success for the top school in particular.

  • Dan

    Generally agree, but I’m afraid, we don’t have a better way to compare salaries across geographies than PPP.

    Besides, the picture on the share of people moving to developing countries is very blurry given the low quality of European employment reports.

    Take for example IMD’s: They cluster post-MBA locations only very roughly in:
    – Americas (yes, Sao Paolo and NYC together 😉 )
    – Europe (mixing everything together, including Switzerland)
    – Africa / Middle East
    – Asia (not distinguishing between high-salary regions such as Singapore and lower-income countries).

    I don’t see any way to conclude anything valuable from this breakdown. We don’t know how many people went to developing countries, boosting PPP-driven salary data, as you suggest. Or am I missing something here?

  • radish

    as per their employment report, the vast majority of IMD grads (nearly 75%) land jobs in Switzerland or western europe. Salaries in Switzerland are much higher than other countries but so the living expenses. Look at the average salaries of St Gallen full time MBA, it is 133K CHF. much higher than IMD.

  • MBA

    The majority of IMD grads don’t actually end up working in Switzerland. Only about 30-40% actually do. There’s only ever 1 or 2 Swiss people in the class of 90, the rest come from all over the world and go to work all over the world.

    While I agree that the cost of living in Switzerland is very high, the taxes are extremely low (11-20% total income tax) and it is an extremely desirable place to live and work so getting a job there is not easy and highly coveted.

    Part of the reason IMD salaries are higher than other schools is actually because at 31, the average age of MBA participants is about 2 years older than other schools and it seeks highly accomplished people that go on to get more senior general management, corporate strategy, etc. jobs at large companies in industry.

    People can make all sorts of claims as to why some grads get paid more than other grads like “most people end up going into investment banking” or “most grads are sponsored consultants returning to MBB”, two major factors that don’t apply to IMD at all. Every school has its strength and for IMD, grads get paid significantly more than other those of other schools.

  • MBA

    Those numbers are PPP adjusted by the Financial Times which gives schools that place grads in developing countries a huge boost (sometimes tripling the actual salaries) and penalizes schools that place grads in developed countries or have expensive currencies. While this is technically “fair”, PPP dollars are not real dollars and it ignores the desirability of living and working in New York vs Sao Paolo for example.

  • Dan

    … just to add 3 more numbers to get the full picture:
    INSEAD: 166,168
    LBS: 154,830
    HEC: 133,301
    Just by looking at these numbers, there isn’t much of a difference in salaries between INSEAD, IE, IMD (incl. Switzerland-bonus) and Cambridge. However, there is one in tuition and opportunity costs, given that LBS and IESE have a two-year program.

  • Dan

    Where does the salary information come from? If you look at the data from the FT 2016 ranking, it looks is quite different:

    USD, 3 years post-MBA, PPP-adjusted:
    IE: 160,659
    IMD: 157,436
    Cambridge: 156,917
    IESE: 139,714
    Oxford: 138,750

    They are all very close.

    IMD – no matter which ranking and which data – is mainly on top because people tend to work in Switzerland post-MBA, leading to very high / inflated salaries but insanely expensive cost of living once you live in, say, Zurich. The added value seems questionable, especially if you don’t want to work in Switzerland.
    Given the small class size at IMD and the (therefore) unrevealing career report , I find IMD very hard to assess, money-wise. The question would is: Do IMD grads command higher salaries than grads from the other schools when employed outside of Switzerland? No-one knows.

    Oxford (I think) is behind because they have quite a focus on social entrepreneurship which might decrease their average salaries. If you don’t want to pursue that path, you have all reason to assume that you will get higher-than-average salaries.

    In terms of reputation, I completely agree with you. I would even add that even HR people in non-MBA labour markets (France, Germany,…) hardly know INSEAD or LBS but they do know Oxbridge.

  • Koichi Fuyumi

    My logic is simple: I rank MBA program based on my personal needs. The top 2 criteria are money and reputation

    Money: I project myself as an average guy and I will get school’s average salary when I graduate
    IMD 108,186
    IESE 84,732
    IE 77,750
    Judge 74,827
    Oxford 69,943

    Reputation is public’s perception on the program. Simply say how proud will I be when I announce where I did my MBA to my family and friends (and most of them lack of understanding on MBA world)
    So only Oxbridge makes a different. Marginally HEC. For all other European programs nobody outside the MBA world really understand and care

  • Koichi Fuyumi

    Looks like you are an insider of IMD getting some numbers which is not public released. Anymore insights to share?

  • MBAObserver

    I do not know the specifics and can only speak to my experiences but I think that news is overblown and rather dated. My experience with recent IMD grads has been really good. Also, the number of applicants? That does not seem like an appropriate way to judge the school. If recent events in America drive down applications to US schools – that does not mean the quality of the school has decreased. Like I said, I think the top programs for Europe are and will be: LBS, INSEAD, IMD, IESE and IE. Just my opinion though

  • MBAObserver

    This is about right. I actually do think LBS, INSEAD are comparable to M7 and IMD / IESE / IE are in the same range as YSOM, Duke, or Tuck. To Raj – Business is conducted outside the United States and there are good Businessmen in Europe. Have you been to LBS, INSEAD, IMD? I have been to each for recruiting and they are very well run and seem to have ample resources

  • SL

    I agree completely but I’m just wondering if enough people will be turned off by #1. For what it’s worth, I moved to the UK after Brexit and have found it to be a very welcoming society (more so than the US)

  • Raj

    Two problem with your statement: First) putting INSEAD and LBS on par with M7 school is unfair, and not realistic. In simple words, M7 schools in US are in their own league and have no peers at all. Any other good school needs decades and money and successful alumni to reach the M7 school status.
    second) IE is on par with INSEAD and LBS and it is absolutely much better than IMD, IESE.

  • Yaniv

    You are right. Not only you, me too and many other find IMD alumni very impressive and on par with those of LBS and INSEAD. But, as you said it “alumni” , I am talking about the recent four years or so. The school is in decline with many problems in the program leadership and the strong decline of application number. In 2013 the school received 440, in 2014, 327, and in 2015, a close to 300 or less. It used to receive 900 or more back in 2006 or before. The impact is on the last two years grads. It is very difficult situation with poor leadership. The program lost its greatest people in admission, career service, and program management two years ago, when five excellent professionals forced to leave the school on conflict with the weird current program director who did unbearable damage to the program reputation, to the school, and to the alumni.

  • Dan

    Just out of curiosity: What makes you seperate IMD, IESE, Cambridge and HEC in this order? At least according to FT ranking, Cambridge (10) > IMD (13) > IESE (15), HEC (16) all with very little, pretty much neglectable differences. IE probably is in the same tier (ranked #12).

  • Dan

    That will be interesting to see. However, I think that not so much will happen in the short term because
    1) nothing changes for non-EU applicants (except the bad press about the less welcoming atmosphere in UK…), and this group is still the largest applicant group.
    2) EU applicants will have graduated by the time the UK leaves EU, at least when we look at 1y programs. They most likely will benefit from ‘Transition rules’ for EU nationals who already are in the UK.
    3) at least the top UK schools carry enough of a halo effect to be useful in the Business world outside of UK, even if applicants can’t work in the UK post-MBA.

  • Koichi Fuyumi

    Among the top 4 program, I think their is at least a 0.5 tier different between INSEAD/ LBS and IMD/ IESE, my personal ranking is
    1st tier: On par with Magic 7 (INSEAD/ LBS)
    1.5 tier: On par with Top 15 (IMD/ IESE)
    2nd tier: Big names (Cambridge/ Oxford/ HEC)
    3rd tier: Other top business school in Europe (IE/ ESADE/ SDA Bocconi)

  • Dan

    Ok then I didn’t miss anything – I just wondered what the value of the numbers could be. It’s pretty much zero because we don’t even know the regional composition of respondents…

  • C. Taylor

    As mentioned . . for the ranking, BB uses its own approach based on regions. Not clear how appropriate that approach might be. For the numbers you see, there is no adjustment. They are just raw currency conversions. This makes the numbers you see useless for comparing programs for any purpose other than determining whether programs place mostly in strong/weak currency areas.

  • Dan

    Does anyone know how the ranking deals with currency conversion? Or to they not convert at all and create a rank per regional compensation group?

  • MBAObserver

    Great point – I absolutely agree

  • MBAObserver

    While IE is a great school that is certainly improving, I don’t think it is yet there with LBS, INSEAD, IMD, IESE. As for IMD, I have worked with several of their alumni and they were impressive. Rankings change every year – I’ve seen HBS drop to #4 in some rankings – such changes do not change the fact that HBS is the best business school in the world. While IMD is going up and down in rankings, it is still one of the top 3 programs in Europe in my opinion.

  • C. Taylor

    I would say BB’s ranking is most appropriate for comparing performance in your targeted region. So if a program–such as Melbourne–doesn’t geographically place people where you want to work, then you could comfortably exclude it from your consideration set. Otherwise, it highlights the potentially hidden appeal of programs such as Melbourne. This is uniquely valuable.

    FYI: Based on the data I’ve reviewed, I would generally suggest AGSM over Melbourne, when not taking fit into account. Both AGSM and its parent university (UNSW) have strong international brands.

  • Yaniv

    IE on the other hand is pretty stable across all rankings and enjoys strong brand and prestigious reputation particularly in the technology and finance. The school is so dynamic and adaptive to the changes in businesses. It is known as the most innovative school.

  • Yaniv

    Good list with little modification: replace IMD by IE. IMD is no longer the one it used to be. It struggles and the recent grads faced difficulties in the job market. Also, IMD is in consistent decline in all rankings. There was a big drop in the number of applications received this year.

  • C. Taylor

    A couple points:

    1: Bloomberg’s approach has a number of positive elements, such as comparing compensation based on region or industry in ranking programs. It also is based on employment-oriented variables rather than manipulation-friendly variables such as GMAT scores and selectivity criteria.
    2: BB fails to include its utilized regional variations in compensation in its published compensation numbers. This renders its published numbers more useful for figuring out which programs place graduates in high–or low–value currency areas than as a basis of comparison. Additionally, BB separately considers industry and regional variances rather than the combined effect.
    3: Trump’s targeted positions are very pro immigration.
         a: Trump’s targeted growth in employment requires significant immigration
         b: Trump targets expedited visa approval processes–impacting family
             members who have been waiting for years.
         c: Trump has targeted making it EASIER for graduates of US universities to
             get visas
         d: Trump targets H1B abuse by companies. Companies have abused the
             H1B in a couple of ways.
                 i.  Importing low wage tech workers and paying them abusively low
                     wages.
                 ii. Holding foreign knowledge workers hostage at below market
                     compensation (they almost can’t apply for other jobs due to
                     sponsorship requirements).

  • MBAObserver

    From my experience working with MBAs it is 1. LBS, 2. INSEAD, 3. IMD, 4. IESE – after that you have some big brands building out their MBA program (Cambridge, Oxford) which are improving but not quite there yet. Overall not a terrible ranking but some questionable placements

  • SL

    Interesting that 3 of the Top 4 schools are British. Wonder how Brexit will affect students who apply and rankings