‘THE STRONGEST APPLICANTS WILL CONTINUE TO COMMAND EXCELLENT OPTIONS’
Many observers, including GMAC which laid the blame for the decline on “the current political climate,” say that anti-immigration rhetoric and concerns over getting work visas in the U.S. have only exacerbated the downturn. “It’s the opposite of a welcoming environment when babies are being separated from their parents at the border,” says one director of MBA admissions, not wanting to be quoted by name. “And the biggest competitor is not getting an MBA at all. Companies are fighting pretty aggressively to keep their top employees. It’s a perfect storm.”
Some of this year’s best candidates, moreover, are being more choosy given the economy’s strength. “I think the real story is that brand is becoming more and more important to applicants each year,” adds Shinewald of mbaMission. “We see a ton of HBS/GSB and nothing else. We see schools that were once aspirational, listed as ‘safe schools’ and these applicants often say, ‘I am not even sure I would go there, but I’ll apply and decide later.’ Some schools are not competing with each other, but are competing with applicants simply staying in their jobs amid an economy that is rewarding them.”
Not everyone is claiming it’s a buyers market. “My overall sense if the present trend continues is that the strongest applicants will continue to command excellent options for b-school, as they always have,” says the top ten dean. “What’s new is that the application decline will reduce the element of randomness that tends to underlie admission processes, and the strong applicants will be more assured of admission to a top-tier school.”
‘STRONG APPLICANTS WILL FEEL LESS COMPELLED TO APPLY TO VERY MANY SAFETY SCHOOLS’
Ultimately, he adds, “this increased certitude will accelerate the ‘flight to quality’ and strong applicants will feel less compelled to apply to very many ‘safety schools.’” The upshot? Schools outside the top tier will face a sharper application declines. “Strong applicants will garner more offers among top-tier schools, causing yield rates to decline faster than application volumes. I hesitate to label this a ‘buyers market,’ especially since the admit rates at top schools are still below 25% for the most part and still not close to historical peaks. But outside the top 20 to 25 schools, it does look like a buyers market. Of course, no school can be complacent in light of recent trends.”
The bigger question will be whether schools will see these declines reverse when the economy begins to sour. Typically, MBA applications go up when the economy turns down, and they tend to fall when the economy is strong. “If the economy weakens and apps don’t go up, we have a real problem,” says one head of MBA admissions at a leading school.