While tech hiring at most U.S. business schools has been steadily climbing in recent years, it reached a new phase at Northwestern University’s Kellogg School of Management this year. The technology sector was so popular, capturing a record 28% of the Class of 2018, that it is now only two percentage points below consulting as a career choice for graduating MBAs.
The surge in tech hiring has led to a major change in where Kellogg MBAs are working right out of school. This year, 33% of the school’s grads took jobs in the west, up from 31% a year earlier. Some 26.1% accepted jobs in the midwest, while 19.3% went to jobs on the east coast. Kellogg said 12.8% of its 2018 graduates took jobs outside the U.S., while 8.8% went to the south.
Most of tech’s gains at Kellogg, moreover, have come at the expense of the consulting and financial services industries. In the past five years, tech hires have risen by 16 percentage points from to that record 28% total from just 12% in 2014, while consulting and financial services hires have both declined by six percentage points to 30% and 14%, respectively.
MBB HIRED 16% OF KELLOGG’S CLASS OF 2018
Even so, McKinsey, Boston Consulting Group and Bain remain the school’s top employers, together employing slightly more than 16% of the 558 MBAs seeking employment this year. McKinsey and BCG each employed 33 Kellogg MBAs, while Bain hired 24 grads. Deloitte hired a dozen MBAs, while Accenture Strategy employed six grads. All of those five consulting firms were among Kellogg’s top ten employers in 2018.
Interestingly, however, the five remaining top employers were all tech firms: Amazon hired 21 MBAs, Google (9), Microsoft (9), Adobe Systems (8), and Facebook (7) (see all Kellogg’s major employers over the years). In all, 64 different tech companies recruited students from the Class of 2018, up 33% from a year ago when the total was 48, according to Liza Kirkpatrick, Kellogg’s director of the career management center for the full-time MBAs.
Not one of the school’s top ten employers were in financial services, though graduating MBAs at Kellogg who landed the biggest starting salaries were both in finance. The highest paid graduate got a job in private equity with a $300,000 salary to start, while the second highest paid MBA took an investment banking job that pays $225,000 in first-year salary.
‘IT’S A MUTUALLY BENEFICIAL CYCLE’ THAT HAS LED TO THE TECH SURGE
“We had a really successful year in the Class of 2018,” adds Kirkpatrick. The median base went up, and I think it’s due to the increase in tech hires because a good portion of those roles are more technical which pay a higher salary.” In fact, median starting salaries in tech rose $5K to $130,000 this year, while signing bonuses were $25,250, a bit more than the standard $25,000 in consulting. Even so, median salary in consulting was $147,000, exactly the same as it was last year.
“The percentage of students in tech is one of the highest among the top seven schools,” adds Kirkpatrick. “We are really proud of that. It’s not only big tech, it’s also the small-to-medium sized tech.companies like DoorDash, SpotHero and TripAdvisor.”
Kirkpatrick says the jump in tech hires is the result of increased interest by students and higher demand for MBAs from tech companies. “It’s a mutually beneficial cycle that we are in, and the jobs are across functions. You can do product management, supply chain or finance within one of these high growth tech firms. And within the sector, fin tech, health tech and ed tech are also popular.”
Both the continued westward tilt in employment and the increased tech hiring this year were also fueled in part by the school’s new winter quarter in San Francisco for full-time MBA students (see Kellogg Does Its Own Bay Area Startup). “The San Francisco quarter has become incredibly popular. students are making a lot of valuable connections with employers there. And we’re also targeting Kellogg alumni on the West Coast, with more targeted outreach in a campaign we’ve called Hire Kellogg.”
MEDIAN SALARY & SIGN-ON BONUSES UP 3.3% TO $145K
Overall, the median salary and sign-on bonus for a Kellogg MBA was $145,000, adjusted for the percentage of grads reporting a signing bonus. That’s a 3.3% increase from $140,350 last year and $139,750 in 2016. Median base salaries came to $130,000, up $5K from a year earlier, while median signing bonuses were $25,000, received by 60% of the graduates, down a tick from 61.4% last year.
That compares with median salary-and-signing-bonus packages of $145,750 at the University of Chicago’s Booth School of Business (see Record Total Pay At Booth As Tech Gains Favor) and $149,699 reported by Duke University’s Fuqua School of Business (see Record Tech Hires At Duke Fuqua). Fuqua pay was boosted by median signing bonuses that were $5K higher at $30,000 than either Kellogg or Booth. All three schools did not report other guaranteed compensation this year in keeping with new reporting standards for MBA pay.
At Harvard Business School this year, the equivalent compensation number hit $156,250, though HBS still reports other guaranteed compensation. Including that guaranteed first-year pay in the totals, adjusted for the percentage of students getting the extras, put Harvard MBAs at a record $160,268 in total median compensation (see Harvard MBAs Now Landing Starting Pay Over $160K). Stanford MBAs are consistently the highest paid MBAs in the world, but Stanford has yet to report its pay stats this year.
All these reported numbers are conservative because they do not include such perks as stock awards, relocation allowances or tuition reimbursements. With such a high percentage of Kellogg MBAs going into tech, unreported restricted stock awards are likely to be a more important part of the pay package. “Stock options do exist in the tech space, but it’s variable depending on the size and stage of the company,” says Kirkpatrick.