It’s (still) good to be an MBA — better than not being one, in most cases where finding a job is concerned. But that doesn’t mean all is well across the employment landscape.
That’s the takeaway from the annual Corporate Recruiters Survey released by the Graduate Management Admission Council today (June 29), which shows that hiring projections for business school graduates remain bullish in 2022 — but with a couple of significant caveats.
Ninety-two percent of corporate recruiters said they expect to hire newly minted MBAs this year, and they plan to pay well: An MBA means as much as 40% more in median starting salary compared to a bachelor’s degree. However, median MBA salaries have flattened, GMAC found, a troubling sign amid rising inflation.
‘AN EXTRAORDINARY FIGURE’
Sangeet Chowfla, president and CEO of GMAC, points out that the latest GMAC findings of the Corporate Recruiters Survey show that nearly 9 out of 10 corporate recruiters feel confident or highly confident in the ability of business schools to prepare students to be successful in their organizations — “an extraordinary figure,” Chowfla says in a news release accompanying the report. “It shows that despite the pandemic and the limitations it brought on student mobility, public and mental health, and remote learning, business schools managed to find ways to build an impressive cohort whom corporate recruiters and staffing agencies worldwide continue to bank on as prime sources for talent.”
GMAC’s findings on the overall positive trend in MBA employment comport with a survey released in April by the MBA Career Services and Employer Alliance, which showed employer recruitment for MBA and business specialized master’s students returning to pre-pandemic activity. GMAC, MBA CSEA and the European Foundation for Management Development conducted this year’s Corporate Recruiters Survey, which recorded data from 941 respondents from 38 countries, including 539 corporate recruiters and 402 from staffing firms.
The inclusion of staffing firms is a change from previous years, when GMAC recorded responses almost exclusively from corporate recruiters. Why the change? Seeking to make the overall sample more globally representative, GMAC Research worked with a market research firm to recruit additional participants and “the robust sample of corporate recruiters and staffing firms allowed GMAC to develop geographical snapshots in 2022 that were less apparent in previous years.”
AX INFLATION SOARS, 54% OF RECRUITERS TO OFFER ASSISTANCE
Among the key findings — and the most relevant to those deciding whether to pursue an MBA — is GMAC’s conclusion that MBA starting salaries continue to provide a premium. Median MBA starting salary levels “eclipse those being offered to bachelor’s graduates by 22% to 40% across the world regions for which there is sufficient sample to report,” GMAC reports.
However, the highest median salaries for new MBA hires (which can be found in the U.S.) are $115,000 — a number that has stayed the same for the last three years of the survey. In an economy perhaps best characterized as “inflationary,” that means “the real value of MBA salaries is declining,” GMAC concludes. It found that to combat that decline, corporate recruiters are increasingly looking to benefits packages, including educational assistance like tuition reimbursement and scholarships: Fifty-four percent of recruiters are offering some form of assistance in 2022, up from 35% last year.
Meanwhile, business master’s median starting salaries are on the rise at companies in the U.S., “which plan to offer increased starting salaries to business master’s graduates in 2022 compared to last year.”
UPTICK IN U.S. HIRING OF INTERNATIONAL GRADS
In more positive news, GMAC found that U.S. international hiring bounced back to pre-pandemic levels with the potential of continued growth for 2022. While the highest international hiring occurs in the Middle East (52%) and Western Europe (40%), in the U.S. “this year’s survey results suggest an improving situation for international MBA and business master’s graduates,” GMAC reports. “Looking back at last year’s actual hiring, 43% of U.S. recruiters confirmed they hired international talent in 2021 — a bounce back from 35% in 2020 and 41% in 2019.”
Further, 56% of U.S. recruiters in this year’s survey say they either plan to make international hires in 2022 (35%) or are willing to (21%), up from 48% that said the same in the 2021 survey. U.S. tech companies are leading the way, with 83% saying they either plan to make international hires in 2022 (62%) or are willing to (21%).
“As travel restrictions ease around the world and student mobility continues to bounce back, we are thrilled to have more international students back on campuses across the country. Our mission is to help our students find success and our graduates reap the benefits of the strong job market in the U.S.,” says Isabelle Bajeux-Besnainou, incoming GMAC board member and dean of Carnegie Mellon Tepper School of Business.
ONLINE MBAs GAIN ACCEPTANCE — BUT NOT AS MUCH IN THE U.S.
Students of online MBA and other business master’s programs will be pleased to learn from GMAC’s survey that global corporate recruiters appear to be becoming more accepting of online degrees. But there’s one major market where that is not the case: the United States.
GMAC reports that the percentage of global recruiters who view graduates of online and in-person graduate business programs equally grew from 34% in 2021 to 60% in 2022, “suggesting a significant growth in the acceptance of online programs.” Not so in the U.S., “where the lion’s share of the world’s online MBA enrollments are” and where online MBA students now outnumber those in traditional residential two-year programs. Among responding U.S. corporate recruiters, just 29% said they view graduates of online and in-person programs equally, the lowest of any world region — and an actual decline from 2021, when 33% of respondents said they viewed the modalities equally.
“The growth of online MBA programs has been so strong in the United States that for the first time, the total number of enrollments in online programs exceeded that of full-time, in-person MBA enrollments in the 2020-21 academic year, according to data from the Association to Advance Collegiate Schools of Business (AACSB),” says Sabrina White, vice president of school and industry engagement at GMAC. “Business schools are presented a unique opportunity to align expectations and outcomes for graduates and employers as online delivery emerges from the pandemic as an important part of the graduate management education industry.”
The decline in favorability for online MBAs represents an opportunity, Sangeet Chowfla says.
“As business schools continue to evolve modalities and more candidates are able to access MBA and business master’s programs through online delivery, this presents the graduate management education community with an opportunity to align expectations and outcomes for graduates and corporate recruiters,” he says.