How much better can the MBA job market possibly get? It’s hard to imagine that the demand for MBAs can become any hotter.
An extensive survey of corporate recruiters out today (May 19) shows that the demand for graduate management talent has reached a new historic high. Though demand is up in every region of the world, the prospects for MBA hiring in the U.S. is extraordinary. More than nine in ten, or 92%, of companies in the U.S. plan to hire MBAs graduates this year, up 12 percentage points from a year-earlier.
On a world wide basis, some 84% of companies plan to add new MBAs to their workforce, up from 74% in 2014 and 62% five years ago, according to the 2015 corporate recruiters survey conducted by the Graduate Management Admission Council study. That level of hiring exceeds the previous peak of 82% set 10 years ago in 2005. It was as low as 50% in 2009 when the Great Recession hit in full force. GMAC said that 59% of these employers plan to increase the number of new MBA hires in 2015, one-third (33%) will maintain 2014 hiring numbers, and 8% will higher fewer recent MBA graduates.
STARTING SALARIES ARE ALSO RISING BY 5% THIS YEAR
“The year 2015 may well turn out to be the best year so far this decade for job-seeking graduate business school students,” according to the report. “Survey findings show that employer demand—and hence job opportunities—for graduate business students, across all candidate types, is on the rise this year both globally and by world region.”
The latest survey, done in partnership with the MBA Career Services & Employer Alliance and EFMD, is based on responses from 748 employers in 47 countries, including 46 companies in the Fortune 100. The healthy market for MBAs is not a surprise because companies have been ramping up through internship hiring to prime the pump for these full-time offers. Last year, 67% of companies had MBA student interns and 85% of these employers offered full-time positions to these individuals.
Not only are jobs expected to be more plentiful. Starting salaries are expected to rise as well for both MBAs and other business master’s graduates. The survey found that more than half of the responding employers will increase starting salaries for new MBA hires in 2015, either at the rate of inflation (30% of companies) or higher (21%). The median starting salary for MBA graduates in the U.S. is $100,00, some $5,000 higher than a year earlier. The median number does not include sign-on bonuses or guaranteed year-end bonus and is based on a wide range of business schools, including many that are not highly ranked.
‘THE MBA DEGREE IS SHOWING MORE STRENGTH THAN EVER’
“The MBA, as an area of study valued by employers, is showing more strength than ever with the hiring of new graduates projected to rise for the third year in a row,” said Sangeet Chowfla, GMAC president, in a statement. “Employer demand for recent business school graduates, notably those skilled in data analytics, continues to increase as companies expect these new workers to use data to drive business decisions starting the moment they are hired.”
GMAC said that demand for MBA talent is greatest among companies in the Northeastern region of the United States, where 96% of employers plan to hire MBA candidates, followed by 93% of Midwest companies, and 90% each for companies in the South and West. “Not only do the majority of companies in the United States plan to hire recent MBA graduates, but a majority in most regions also plans to increase the number of MBA candidate hires in 2015,” according to the report. “For example, in the Northeast, West, and South, between 53% and 67% of employers will hire more MBAs in 2015 than they did in 2014. Forty-seven percent of Midwest companies will follow suit.”
While U.S. hiring is most bullish, demand is rising all over the world, according to the report. Three in 4 (75%) Asia-Pacific companies plan to hire MBA graduates in 2015, an increase from 69% last year. More than half of European-based companies plan to hire MBAs (56% of employers), while 75% of Latin American companies plan to hire MBAs, a percentage similar to that of Asia-Pacific employers and nearly 20 percentage points higher than European employers.