The world’s leading employers hired 8% more MBA graduates in 2014 and forecast 12% growth in MBA hiring in 2015, led by large technology firms including Amazon and Apple, and energy companies.
But this is a drop from the 14% increase in MBA hiring last year, according to the largest survey of global employers.
That means demand for business school graduates is slowing from the 15% average growth in MBA employment recorded over the past three decades, data from the QS Global Employer Surveys show, released this week, although there has been an increase in emerging markets.
But in North America, hiring of MBA graduates jumped 10% in 2014, as employer confidence grows in the stronger than expected recovery of the US economy, which grew by an annualised 4.6% in the second quarter of this year.
This spurt in hiring is driven by large technology groups which are now recruiting in almost every world region. High-tech and electronics companies hired 11% more MBAs, while IT and telecoms companies hired 8% and 7% more in 2014.
Miriam Park, Amazon’s director of university recruiting, said: “MBAs are very strong problem solvers and analytical thinkers, which makes them a great leadership pipeline. We see MBAs thriving at Amazon because they love taking ownership of big projects and solving hard problems for our customers.”
In contrast, Western Europe reported 0% growth in MBA demand in 2014 as the Eurozone recovery has slowed, although there was growth in Switzerland, Germany, Belgium, France and the UK.
Southern European countries performed worst but the damage is offset by Italian and Spanish employers’ strong employment growth forecasts of 15% and 7% in 2015 respectively.
Employers in Asia hired 11% more MBA graduates in 2014, according to the survey, showing the increased reverence of the qualification, particularly in China and India where consulting and finance firms have hired strongly and where demand is forecast to remain roughly stable.
The energy industry hired 18% more MBAs in 2014, but this was supplemented by many smaller companies operating in renewable energy fields.
Financial services and consulting firms have shown steady growth but are by no means booming – they have increased MBA hiring by 7% and 9% respectively.
But other sectors are hot. Consumer goods firms hired 12% more MBAs in 2014 and the media and entertainment sector 11%. Pharmaceuticals companies showed strong appetite for the MBA and hired 9% more in 2014.
Adding to the sense of globalization in the business education market, international study experience is sought after by 67% of MBA employers.
But the data show that MBAs are still failing to impress recruiters with their soft skills, which are increasingly sought after by employers.
MBA graduates can look forward to rich rewards. Salaries have increased by 4% in the US and Western Europe, says QS, with average annual salaries at $94,200.
But North American graduates’ compensation has surged by 15% to $128,600. Switzerland and Australia have the highest levels of compensation overall.
Financial services firms including Bloomberg and Deutsche Bank pay MBAs $95,050 in average salary, but with bonuses this can top $200,000, according to QS.
Consulting firms such as Bain & Company and Deloitte pay up to $160,000 in salary in Europe and the US, according to the survey, but smaller niche firms pay much less.
The most lucrative sector by average pay is metals and mining, where MBAs earn $134,250 in salary. Energy firms and big pharma also pay their MBAs over $100,000 in average salary.
The lowest average salaries are offered in retail, utilities, law, transportation, travel and hospitality sectors, and the public sector.
Business schools responded positively to the news.
Paul Danos, dean of US-based Tuck School of Business, said: “Demand for graduates of top MBA programs by the great businesses of the world continues to be strong. As businesses grow in complexity and scope, companies need more and more skilled and well-educated leaders.”
Isabella Pinucci, career services coordinator at Italy’s SDA Bocconi School of Management, said that the prospect of changing jobs is motivating MBAs. She added: “Whether its sector, industry, function, country or region, [switching careers] seems to be driving a greater proportion of candidates.”
While demand is strong in the US and Canada despite the maturity of the jobs markets there, there is a notable surge in employment in emerging markets.
Recruiters from Africa and the Middle East forecast a 12% increase in MBA hiring through 2014/2015, reflecting the willingness of students to look further afield for their business education.
However, the QS survey notes that Russia will hire the most MBAs in 2014 – the forecast is a 19% increase from last year – despite the economic sanctions placed on the country and the on-going conflict in Ukraine.
The QS data is in line with an earlier report by GMAC, administrators of the GMAT business school entry exam, which revealed that four out of five companies said they planned to hire MBA graduates in 2014.
Sangeet Chowfla, GMAC CEO, said: “For students, GMAC’s Corporate Recruiters Survey may very well signal a change in hiring from a cost-driven, recession-driven organizational focus, to a growth-driven focus.”