Recent MBAs are happy — very happy — with their degrees. And that includes those who are working in fields they never thought they’d work in before they started business school.
A new study has found that nine in 10 members of the Class of 2016 report finding jobs within four to six months of graduating, with about the same percentage crediting their degrees with getting those jobs and an even higher number being highly satisfied with the value of their degrees. And more than a quarter — 28% — report finding themselves in jobs they didn’t previously consider before B-school.
In a snapshot report released ahead of its major annual Alumni Perspectives Survey, the Graduate Management Admission Council found that 91% of 2016 graduates attained work within six months of graduating, with 88% saying their degree was key to getting their current job — exactly the same percentage as the Class of 2015 — and 96% rating their MBA’s value as “good” to “outstanding”.
“A lot of the numbers in this report are basically on par with what happened in the Class of 2015,” says Gregg Schoenfeld, GMAC research director. “Ninety-one percent of business students are employed? Last year it was also 91%.”
FROM 2015 TO 2016, LITTLE CHANGE IN MAKEUP, OUTLOOK
In fact, Schoenfeld tells Poets&Quants, across most of the metrics of the GMAC survey of 1,000 members of the Class of 2016 — which is a small portion of the overall alumni survey that is slated to be released February 28 — the results were exactly or nearly the same as in 2015.
Respondents graduated from a variety of program types, including full-time two-year MBA (29%), executive MBA (11%), and part-time MBA (33%). Overall, two-thirds of respondents were male (67%), just as in 2015, and most were between the ages of 26 and 30 (36%) and 31 to 35 (27%) years old.
Class of 2016 graduates found full-time employment in a broad array of industries, among them products and services (28%), technology (13%), consulting (13%), and finance and accounting (11%). GMAC found that their most common job functions are in finance and accounting (24%), marketing and sales (23%), operations and logistics (17%), and consulting (13%).
FOR 28%, A COURSE CORRECTION
GMAC has conducted its alumni survey using the current methodology, which relies on schools to supply lists of alumni, every year since 2013. This year, one new question was asked of 2016 graduates: Have you found work in an industry you had not previously considered before business school? Somewhat surprisingly, Schoenfeld says, more than a quarter of graduates (28%) answered in the affirmative, showing how B-school can be a door-opener in unexpected ways.
“We’ve always asked, ‘What industry did you work in before? What industry are you working in now?’ But we never asked, ‘Is the industry you’re working in now the one you expected going into business school?’” Schoenfeld says. “So we don’t have a sense that 28% is unusual, but it gives the idea that going to business school for about a quarter of people is opening up these new ideas and opportunities for them that they never considered before.
“Everyone has an idea of what they want to do with their business degree, right? I come into business school and I’m like, ‘I want to go into finance and accounting.’ I go to school and I’m taking all these courses, talking with all my peers, networking with professors, doing all these co-curricular activities — and I realize that though I thought I was going to go into finance, you know what? I’m really interested in supply chain management. And I would never have thought about that if I had not gone to business school.”
THE ENTREPRENEURIAL ROUTE: STILL THE PATH LESS-TAKEN
So for whom did MBAs work? Eighty-six percent found work with an employer, while 5% became their own bosses — again, the same percentage found in last year’s survey, Schoenfeld says. That’s not to say only 5% of MBAs ever become entrepreneurs — it’s just that in the snapshot of four to six months after graduation when the survey is taken, many would-be entrepreneurs have yet to launch their enterprises.
“Entrepreneurship actually grows years after graduation,” Schoenfeld says. “Research shows higher percentages of MBAs interested in entrepreneurship. Many go back to work for an employer for some time before then venturing off.
“Anecdotally, some people say, ‘I want to work for a company that gives these types of roles that I’ve never had before, to get more experience so when I do venture off on my own, I have the experience. So they are using employment as a way to test the waters and learn even more, using their career opportunities learn more so when they do venture off on their own in entrepreneurship, they have a greater breadth and depth of experience to draw upon.”
Among the 5% of entrepreneurs who hit the ground running right after graduation, 34% started their business before beginning their MBA, GMAC found, while 43% launched their business while enrolled and 17% started immediately after graduating. Many MBAs reported making use of university resources to get their businesses off the ground, whether by seeking guidance from faculty (66%) and other experts within the business school community (56%), or by accessing specialists, such as programmers (53%).
Additionally, entrepreneurs report taking specific courses related to entrepreneurship (41%), making use of workspace for startups (31%), and receiving funding from their school (22%). About one in five (18%) sought venture capital for their business; among them, the majority (60%) were successful in securing funding. Asked to evaluate the level of success of their fledgling businesses, most told GMAC their business is “somewhat successful” (53%), “very successful” (33%), or “extremely successful” (13%).
‘IT’S ALL REALLY GOOD NEWS ABOUT BUSINESS SCHOOL’
Besides the 88% of 2016 graduates who said their degree was important to attaining their current job, a similar number say the knowledge (87%) and skills (89%) they gained were important for securing that job. And 62% credit the networks developed during their MBA as important to landing said job.
Overall, Class of 2016 graduates report very high levels of satisfaction with their graduate business education. Ninety-one percent say they would pursue their degree again if given the choice, while majorities agree their education was rewarding personally (93%), professionally (91%), and financially (68%).
GMAC found that 2016 MBAs also agree their education:
• Prepared them for leadership positions (88%);
• Developed their professional network (87%);
• Prepared them for their chosen career (84%);
• Offered opportunities for quicker career advancement (73%); and
• Improved their job satisfaction (66%).
“Alumni are finding that their experience is helping them with their careers,” Schoenfeld says. “It’s all really good news about business school.”
SATISFIED MBAs = HIGHLY PAID MBAs?
With such high rates of satisfaction, new MBAs must be making good salaries, right? GMAC found that the median total annual compensation for the Class of 2016 — including signing bonuses, stock options, and other perks — is $105,000. But there’s variation by program type. Among full-time two-year MBA graduates, total compensation is $120,000, compared with $60,000 for Master in Management graduates.
About four in five Class of 2016 graduates (79%) agree their degrees increased their earning power; most (55%) had to negotiate to get the starting salary they wanted, with 69% reporting a successful negotiation outcome.
According to GMAC, early indications for the 2017 graduating class are that starting salaries may rise. Results of the 2016 Year-End Poll of Employers indicate that 58 percent of employers plan to increase starting base salaries for new MBA hires in 2017.
“From past years, say back in 2008, 2009, during the recession, things after that took time to pick up, and then it got to this moment of almost normalcy where we are now,” Schoenfeld says. “The employment market has picked up, and students are finding the jobs, and getting the salaries, they are seeking.”