Show me the money.
That’s the message from MBA graduates who value compensation from employers more than anything else, according to self-reported data from TransparentCareer, an MBA-centric online career platform.
So much for all the millennial focus over work/life balance, the chance to advance in a company, or even the reputation of an employer. It’s the paycheck that ultimately matters most. Asked to indicate the most important “value” in a future employer, a whopping 72% of MBA graduates put compensation at the top of the list. That is almost 20 percentage points higher than the next quality, which was “opportunity for advancement” at 53%.
“As much as we at TransparentCareer try to encourage MBAs to consider other factors, like work-life balance, the reality is that the average student at a Top 25 program is probably graduating with $90,000 to $100,000 or more in student debt,” says Kevin Marvinac, TransparentCareer’s COO and co-founder. “So, in the near term, relevant experience, optionality, and especially compensation are playing the biggest role.”
The upshot: The trend of increasing remote work options and flexibility might not be having the impact companies expect in recruiting MBAs from the world’s best business programs. Work-life balance and flexibility finish fifth out of seven qualities, with only a third (33%) of users listing it as an important value. Quality of co-workers falls behind the opportunity for advancement at 41%, followed by brand prestige, which was listed by 34% of users. Amazingly, only 7% chose firm stability, which was the least desired quality sought in a future employer by MBA grads.
FIRM STABILITY AND OPPORTUNITY TO ADVANCE RELATIVELY LOW
Marvinac says he was most surprised that MBAs did not favor the ability to advance in a firm as highly as compensation.
“When I filled out my TransparentCareer profile, I ranked this as my number one priority in considering companies to look into, because as an MBA I want to know I’m on a management track as soon as possible,” adds Marvinac, who is working on his MBA at Chicago’s Booth School of Business. “I’m a little surprised it’s not closer to the top, although with so many consultants filling out the survey, it makes sense. Most consultants leave their firms after two or three years, anyway.”
The startup bug accounts for such little interest in firm stability, Marvinac confirms. Marvinac says higher interest in “smaller, high-growth” firms where the impact of one’s work can be more visible and appreciated appeals to this generation of MBAs. Plus, Marvinac explains, a strong economy since recovering from the Great Recession has given MBAs confidence they’ll have a soft landing if a smaller, unstable firm goes under. “People have confidence right now,” Marvinac says.
POPULARITY IN CONSULTING AND TECH COULD SKEW DATA
According to Stacey Rudnick, the director of MBA Career Management at the University of Texas-Austin McCombs School of Business, the long hours MBAs know they’ll likely work might play another role in graduates placing such a high value on pay over other employment attributes. The growing popularity of consulting and tech, in particular, might be a factor, Rudnick explains.
“Students expect the company to compensate them for the hours, the time away from home and being in new and somewhat stressful situations on a daily basis on the client site,” Rudnick says of consulting. “Similarly, many high-tech firms may also have long hours, if not so much travel and are typically located in the highest cost areas of the country.”
According to TransparentCareer data previously reported by Poets&Quants, consultants work an average of nearly 60 hours a week in their first jobs after B-school. Investment bankers work nearly 80 hours a week directly out of school.
HOW INDIVIDUAL COMPANIES RANK AGAINST ONE ANOTHER
Rudnick says she has recently seen companies in tech and consulting go “head-to-head” in “elevating” benefits and compensation to secure top talent. Conveniently, Marvinac was also able to compile company-specific data on how current and former MBAs rank companies on each value. And according to that data, no other consulting company ranks higher for compensation than London-based L.E.K. Consulting.
As TransparentCareer users complete their profiles, they are asked to rate their previous employers on the same values that are most important to them. L.E.K. tops the list for consulting firms and is followed by Parthenon-EY Consulting. Bain & Company, the Boston Consulting Group, and Strategy& rounded out the top five for total compensation. On the tech side, Microsoft topped compensation ratings. The tech giant was followed by VMWare, Apple, Amazon, and Facebook, respectively.
Beyond compensation, the ratings reveal high ratings for companies that might not be on the radar screens of most MBA students. For example, Boston-based Analysis Group topped three of the seven categories for consulting. No other consulting firm topped more than one category. Analysis Group topped out in opportunity for advancement, brand prestige, and training. However, Analysis Group, which has less than 1,000 employees, places last in compensation.