Confident in their prospects in a rapidly expanding economy, MBA students are optimistic about their employment prospects, according to the 13th annual MBA employment survey conducted by a company that provides training courses for Wall Street banks and financial institutions.
Training The Street’s survey of more than 450 MBA students across the United States reveals a very bullish group of first- and second-year MBAs, with almost 80% of respondents saying they are “very” or “somewhat” confident about landing a good job — in stark contrast to last year at this time, when just 43% expressed confidence about their employment prospect and 57% said they were very or somewhat pessimistic. Only 9% of those surveyed said they are dissatisfied with their job offers this year.
But things won’t be going back to normal, if these future business leaders have any say (and they do). MBA candidates responding to TTS say while they are ready to go back to cities, but a large majority prefer a hybrid work schedule, splitting time between the office and working from home; only 18% said they prefer to be in the office full time.
A NOTE OF CAUTION ON PLACEMENT & PAY
The TTS survey was conducted between April 9 and May 10. To collect the data, the organization — which styles itself as “the world’s leading provider of courses in accounting, asset management, capital markets, financial modeling and corporate valuation training to investment banks, financial institutions, consulting firms, federal government agencies, law firms, business schools, and top colleges” — surveyed 451 students currently enrolled in a business school and pursuing an MBA. More than half of respondents with an internship or full-time offer — 52.4% — say they expect to make an annualized salary of over $125,000, and 73.9% of MBA students expect to make at least $100,000 this year.
However, 26% said they have not received a job offer, indicating the job market is very competitive with graduates from 2021 also competing with 2020 grads. Placement rates for Class of 2020 graduates lagged amid the lagging economy.
A closer look at pay data from U.S. business schools sounds a note of concern, if not caution, as well. It is true, according to a new Poets&Quants‘ analysis, that half of the top 26 business schools in the U.S. reported select graduates striking it rich, with base salaries north of $200K in 2020, while 17 B-schools reported improbably large sign-on bonuses of $100K or greater. The latter group includes a UNC Kenan-Flagler Business School MBA who got a $250K bonus, the highest reported; the former includes a newly graduated MBA from Stanford Graduate School of Business who accepted a job in financial services in the West for a base salary of $400,000, as well as two Harvard Business School MBAs who reported starting salaries of $375,000 and an international MBA from Columbia Business School who pulled down a cool $375K.
But those singular successes distract from the bigger story, which is that MBA pay slumped in the coronavirus year of 2020, growing — where it grew at all — more slowly than previously years and not keeping pace with the relentlessly rising cost of the degree. Nine schools saw their total pay decline from 2019 to 2020, including two Southern California schools, USC Marshall School of Business (-3.3% from $155,267 to $150,191) and UCLA Anderson School of Management (-2.1% from $151,837 to $148,704); between 2018 and 2019, only one school (Washington Foster School of Business) suffered that fate.
Overall, using the data gathered by U.S. News & World Report for its 2022 ranking, we see that pay in 2020 increased at a rate of 2.3% for MBA graduates of the top 26 schools, less than half the rate it grew in 2019 (4.9%).
MORE THAN HALF SAY 3 TO 4 DAYS IN OFFICE PER WEEK IS ENOUGH
Yet optimism reigns for the young and upwardly mobile MBA set, notes Scott Rostan, CEO of TTS.
“The surge in optimism among MBA students reflects the improvement in the overall economy as businesses reopen and return to growth mode, as well as the recent strong performance of the M&A and IPO markets,” Rostan says. At the same time, he adds, “2021 graduates need to contend with candidates who had a much more difficult employment environment last year and are still searching for positions.”
The TTS survey also found that despite what some have called an “exodus” from big cities, an overwhelming majority (83.6%) stating their preference for working in a major city — but just 18.1% say they prefer to work “fully in-person,” compared with 54.8% who would like to be in-person three to four days a week. Nearly a quarter (23.5%) said one to two days of in-person work is ideal.
“The very strong starting salaries and preference for a hybrid working model are another sign of the confidence that this year’s MBAs are feeling,” Mr. Rostan stated.
In response to a question of where they see themselves working in five years, 24.6% of students said “corporate / industry position (corp. dev, finance, strategy, etc),” 18.1% said “private equity/venture capital/hedge fund”, and 14.2% of respondents said “tech (established company, e.g. Facebook, Google, Amazon).” The percentage of MBA students interested in pursuing a career in tech has increased each year from 12.5% in 2020 and 8.9% in 2019.
The biggest factors in selecting a position were career growth opportunities and salary. Nearly half (47%) of respondents ranked career growth opportunities among their top two priorities and just over 45% of students ranked salary among their two most important factors in employment considerations.