With MBA application essay questions being released in just a few weeks (if that!), we thought we would take a look into our crystal ball and identify the stories we think might affect MBA application volumes this season. You may be surprised to hear that one person in particular will have the greatest impact on the application pool—and we are not talking about Poet&Quants’ John A. Byrne or Harvard Business School’s Chad Losee. That person is none other than (just in case you were not yet tired of stories about him!) Donald Trump. Yes, MBA application volumes are swayed by macro trends, and the president’s tweets and policies have already significantly influenced who will be applying to business school this year, and perhaps in some cases, where.
- The Decline in International Applicants: At this time last year, the “Trump effect” was still largely speculative, but now that a full MBA application cycle has passed since the inauguration, and given the president’s continued hostile stance on immigration, many potential international applicants have become discouraged by their post-MBA U.S. employment prospects. We have heard whispers from some admissions officers that their international applications are down significantly, and one told us that an event in a global capital that had previously yielded roughly 30 potential applicants drew only three attendees this year. Although the schools’ total application volumes will not be published for a few months, our sense is that the number of global applicants has declined, even at the top programs, and we wonder whether such candidates will shift their focus to schools in Canada and Europe or perhaps even disappear altogether. Will the decline continue into this year, or will international applicants adjust to the new normal and reenter the U.S. pool?
- The Hot Economy: Although the stock market has cooled a bit in recent weeks, it is still near the top of a significant upward run. Meanwhile, unemployment is at record lows; after 90 straight months of employment gains, the unemployment rate stands at a meager 4.1%. With such a strong labor market, will 20-somethings risk their safe jobs and potential for advancement (without an MBA) for the promise of accelerated growth after graduation? Generally speaking, during strong economic times, MBA application volumes tend to wane. That said, while the broader MBA market has seen a decrease in applications, the top 20 programs have held up reasonably well, and several even saw record highs last year. Will the bustling economy and lower numbers of international candidates now diminish applicant zeal?
- Jeff Bezos and Amazon: In recent weeks, the president has been tweeting about Jeff Bezos and Amazon, allegedly upset at the company’s use of the U.S. Postal Service (USPS), though we suspect he may be more angry about the Washington Post’s coverage of him (Bezos privately owns the publication). Thanks to the president’s tweets about the business, Amazon stock has dropped in value by approximately 10% from its high. But why should this matter to MBA applicants? Simply put, Amazon is the single largest employer of MBAs, hiring roughly 1,000 of them each year. The Trump administration pursuing antitrust charges against Amazon or somehow forcing the USPS to increase its fees could be disruptive to Amazon, and any significant disruption in Amazon’s operating plan could have a negative impact on MBA hiring, which could in turn affect employment or job satisfaction numbers, which could then dampen applicant psyches. This sequence might not play out over just a few months, but the speed of policy development seems to be faster than it has ever been, and we simply cannot predict what the president’s next tweet will bring.
- The Tax Cut: With corporate tax rates falling by 20%, many are predicting a boom in mergers and acquisitions. Profitable companies are poised to become even more profitable, and cash-rich companies will have even more cash to distribute. This newfound bounty means that companies are buying back stock, issuing dividends, paying out bonuses, and looking to invest their windfalls by acquiring other firms. If this results in an acquisition boom, Wall Street will likely need to scale up quickly, meaning that investment banks and private equity firms would need to hire MBAs to meet deal demand. For the first time in a long while, these entities could represent a more forceful presence at MBA recruiting events, having taken a back seat to tech firms for years. And more robust hiring on Wall Street could send a signal that the MBA degree is a worthwhile investment, attracting more applicants to the pool.
We will keep an eye on these currents as the new application season progresses. However, as an applicant, your priority is to stay focused on the long game, weighing whether an MBA is the right next step for you and will pay off throughout your career.
Jeremy Shinewald is founder and president of mbaMission, a leading MBA admissions consulting firm
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