Harvard Business School finds itself in unfamiliar territory in the newest U.S. News & World MBA ranking published today (March 17). In the final year of Nitin Nohria’s deanship, the school collapsed to its lowest U.S. News ranking ever, falling three places to rank sixth behind business schools that are rarely considered direct competitors with HBS for the best applicants.
Harvard’s arch-rival, Stanford Graduate School of Business, moved up a spot to share first place with the University of Pennsylvania’s Wharton School. By U.S. News‘ reckoning, Harvard is no longer the best business school in Beantown. The new ranking put Harvard behind Northwestern University’s Kellogg School of Management and the University of Chicago’s Booth School of Business, both tied for third place, and MIT’s Sloan School of Management in fifth place.
Only two years ago, HBS topped the list, as it has on 17 different occasions since 1990, though it has sometimes shared the crown with either Stanford, Wharton or Chicago Booth. But last year, Harvard slid into third place for a three-way tie with MIT Sloan and Chicago Booth, and now the school finds itself in even a worse position. Until this year, Harvard’s weakest showing on the U.S. News list occurred in 1996 when it finished in fifth place and Stanford was first.
HARVARD BUSINESS SCHOOL FELL IN FIVE OF EIGHT KEY DATA POINTS IN THE U.S. NEWS MBA RANKING
Harvard Business School’s lackluster performance comes only a month after the school surveyed its own students and found that U.S. News is the most read and influential of all the MBA rankings by Harvard’s MBAs. In that survey, 74% of the responding students said they consulted the ranking while applying to business school, while 46% said the publication’s rankings influenced their school choices.
Harvard’s decline, the largest of any top 25 MBA program, was the result of a drop in a majority of the key metrics U.S. News employs to rank business schools. HBS fell in five of the eight data points, including employment rates at graduation and three months later. After two straight years of application declines, Harvard’s acceptance rate rose to 11.5%, up from 10.4% a year earlier. The average class GMAT fell three points to 728 from 731.
Most of the changes were small, if not inconsequential, but the best schools are closely bunched together in rankings so slight changes can result in outsized differences. Harvard MBAs employed at graduation, for example, fell to 77.3% from 79.1%, while grads employed three months after commencement declined to 88.5% from 89.3%. U.S. News’ peer assessment survey of deans and MBA program directors slid to 4.8 from 4.9 on a five-point scale with five the best possible score.
AVERAGE SALARY AND SIGN-ON BONUSES FOR HARVARD MBAS NOW TRAILS SIX OTHER SCHOOLS
Even though average salaries and sign-on bonuses for Harvard MBAs increased by 3.5% last year to $164,872, HBS grads now trail six other business schools in that basic pay measure: Wharton ($172,016), NYU Stern ($168,291), Stanford ($168,226), Dartmouth Tuck ($166,251), Virginia Darden ($165,292), and Columbia Business School ($164,945). U.S. News, however, does not measure other guaranteed compensation nor stock awards, both of which are likely to be factors in overall pay at Harvard.
HBS was hardly the only casualty on the new 2020 list, which U.S. News advertises as a 2021 ranking to prolong its shelf life, even though it is based on 2019 data and comes out in 2020. There was a surprising reshuffling of schools in the top ten, with both Duke Fuqua and Michigan Ross falling out of the top ten into a tie in 12th place. NYU Stern rose by two spots to wrangle the tenth position on the list. Kellogg advanced three spots to tie Chicago Booth for third. Both MIT Sloan and Columbia Business School slipped two places to rank fifth and eighth, respectively. All told, seven of this year’s top ten experienced a change in rank.
Dartmouth Tuck, which fell out of the top ten in 2018, failed to return. The school maintained its rank of 12th from last year but is now in a three-way tie with Michigan and Duke. Three years ago, Tuck placed eighth on the U.S. News list. For the third straight year, meantime, the University of Virginia’s Darden School of Business moved higher by a single spot to rank 11th from 12th last year, 13th in 2018, and 14th in 2017.
Among the top 25 schools, Vanderbilt University’s Owen School of Management climbed the most, rising six spots to finish in 23rd place. The University of Florida’s Warrington School slipped out of the top 25, losing its rank of 25 last year, to a rank of 28th.