It’s official: this year’s MBA job market has made a dramatic turnaround.
The Class of 2011 that will be graduating with MBAs over the next few weeks has landed more jobs, with slightly more job offers at higher starting salaries, according to new research out today (May 10) by the Graduate Management Admission Council (GMAC).
The most positive sign of the turnaround comes in the percentage of forthcoming MBA grads who already had at least one job offer at the time the research was conducted in March—more than a month before graduation. This year, more than half (54%) have a job offer in their pocket, compared to only 32% last year, an improvement of 22 percentage points.
NEW B-SCHOOL GRADS CAN EXPECT TO EARN BASE SALARIES OF $91,433 THIS YEAR
Salaries are also higher this year. New B-school hires in the United States can
expect to earn an average base salary of $91,433, up from $89,141 last year and $86,299 in 2009, GMAC said. This compares with $50,180 for graduates with just a bachelor’s degree. In Europe, MBAs can expect to pull down slightly higher base salaries–$91,696—while MBAs in Asia Pacific can expect to earn $30,315.
2011 MBAS INCREASING BASE PAY BY 73% OVER PRE-SCHOOL SALARIES
Just as crucial, grads from two-year full-time MBA programs reported a 73% increase in their post-degree base salary compared with what they earned before beginning their studies, on average. This is an increase from the 64 percent average salary boost seen by their peers in the class of 2010. It’s also the largest increase since 2008 when the MBA boost amounted to 74%.
In addition to a salary boost, Class of 2011 graduates expect other positive changes to their employment situation, according to GMAC. Some 43% expect an increase in responsibilities, 35% will receive a promotion, and 30% will have a change in job title. Another 15% expect an increase in direct reports, 11% an increase in budgetary responsibility, and 5% will receive a cash bonus for completing a degree program.
MBA JOB OFFERS UP TO 2.0 THIS YEAR, FROM 1.7 IN 2010
And job offers increased slightly as well, up to 2.0, on average, from 1.7 last year for two-year, full-time MBA grads. It’s the best job offer number for MBAs since 2008 when soon-to-graduate MBAs reported 2.3 offers, on average. Helping to increase offers is the fact that 67% of employers represented in the survey expect to hire new MBAs during the coming year, up from 62 percent in 2010 and 50 percent in 2009.
The GMAC research confirms several earlier reports of a vastly improved job market for MBA graduates at top schools (see “MBA Jobs: From Dark Days to a Happy Present.”) This latest research—based on two GMAC surveys to second-year students as well as corporate recruiters—precedes the more specific placement reports from individual schools in the fall.
Moreover, the improved numbers reflect B-schools and corporate recruiters across the board, not merely the top 25 or 50 schools which tend to outperform the industry or the large-scale hirers of MBAs that essentially make the market. The survey of students, for example, is based on 4,794 recent or soon-to-be grads at 156 schools. Roughly 20% of the schools are outside the U.S. The survey of corporate recruiters is based on 1,509 responses, representing 905 companies in 51 countries.
“There is a clear connection between the optimism employers are expressing and the improving job prospects business school graduates are seeing,” said Dave Wilson, president of GMAC, in a statement. “Organizations need smart managers to deal with challenges—and they rely on them to seize opportunities.”
GMAC reported that increased hiring was most notable in the following industries: manufacturing, non-profit/government, high tech, finance and accounting, and products and services sectors.
“Viewed in terms of employment offers, the bottom of the 2008–2010 downturn was about as deep as that in 2003, but the subsequent recovery has been a quicker climb for the current class,” the GMAC report said. “The positive upturn in the percentage of part-time MBA graduates with job offers (55%), in fact, has surpassed the height of offers previously recorded in 2001 (51%). Executive MBA students (47%) fell short of the highest recorded percentage in 2007 (56%), but were twice as likely as the class of 2010 to have a job offer in hand. Job offers to two-year full-time MBA graduates (57%) have increased from 2010 levels and appear to have recovered to pre-recessionary levels.”
On average, GMAC said, students with job offers submitted approximately 16 resumes/applications, landed six job interviews, and received two offers of employment. Graduating students still seeking employment submitted slightly more resumes (18) and landed only half as many interviews (3), on average. Comparatively, there were no significant differences based on gender in either the number of applications submitted, interviews received, or jobs offered. “Furthermore, there were few differences by gender when controlling for industry,” according to the study. “Men received slightly more invitations (3.3) to job interviews in the products/services industry than women (2.6) did, but there was no difference in the number of offers received. Similarly, men (3.3) were more likely than women (1.7) to receive an interview in the energy/utility industry, but again there was no difference in the number of job offers.”
92% OF STUDENTS SAY THEIR EDUCATION IS OUTSTANDING, EXCELLENT OR GOOD
The survey also measures student satisfaction with their business school experience. Despite all the MBA bashing of late, B-school students are remarkably enthusiastic about their experiences. GMAC said some 92% of the Class of 2011 rated the value of their education as outstanding, excellent, or good. Grads of full-time, two-year MBA programs were most likely to believe their experience was outstanding: 38% compared to 26% of the graduates of one-year MBA programs and 21% of the graduates of part-time MBA programs.