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Can MBAs Still Strike Gold In The Employment Mine?

There has never been a better time to be an MBA; new data says pay is up and graduates say their degrees were essential in landing jobs. But can MBAs still making a killing?

Mon Mar 17 2014

In a plush office block on London’s embankment, Rajat Handa leaned back in his chair and began talking MBA jobs. The management consultant was taking a quick break from his first year as a senior associate at PwC, the leading professional services firm which scooped up a raft of business school graduates last year.

Following the aftermath of the financial crisis, the global jobs industry is on a roll. Thanks to better performing economies and closer ties between business schools and MBA employers, the tide appears to be turning.

A deep pool of graduate talent has drawn top companies to campus for years, and there has been a pick-up in MBA hiring. However, not all regions have always enjoyed such encouraging demand for business education.

There has been a slump in U.S schools’ demand and an even bigger drop in applications for programs in the Asia Pacific region. European schools reported a similar decline in demand for full-time one-year MBA programs last year, on a par with 2012.

Competition in the MBA jobs market is hotter too. Giant, billion-dollar industries such as healthcare, which are becoming more popular, are also harder to get into. U.S employers are forecast to hire undergraduates in higher numbers and some schools are sending their MBA graduates into fewer finance jobs – the traditional bastion of MBA hiring.

But MBA pay has picked up since the credit crunch, up to a high of 12 per cent. Today’s graduates can expect to receive more than the MBA classes of 2005 did.

The potential financial rewards of business education are becoming ever greater. A bevvy of new online-based, flexible and executive programs have appeared on the scene, attempting to capture the new breed of full-time working student.

Now, reports confirm that business school alumni see their degrees as essential to obtaining employment. The vast majority of graduate business school alumni (83 per cent) from the classes of 1959-2013 report their graduate management degrees were essential for landing jobs, says the Graduate Management Admissions Council.

“You'll have heard how bad the competition is,” said Rajat, who switched from IT to management consulting after obtaining an MBA from Lancaster. “But Lancaster has done wonders for me. I had no consulting experience at all; all I had on my CV were my three MBA projects.”

The PwC consultant is adamant that an MBA gave him the confidence to make the career transition. And with competition rife at the firm, an MBA differentiated him from his peers, Rajat said.   

“If two people are in the same role in the same firm, and are both performing well, how do you differentiate between them? That's where education steps in,” he said.

Soft skills obtained at business school are also rated as crucial for the next generation of executives. According to GMAC, who surveyed 21,000 alumni, soft skills account for three of the five top skills MBAs use every day on the job, while interpersonal skills are the most frequently used.

“Employers often value soft skills such as management, leadership and team working as highly as functional understanding, quantitative ability or analytical skills,” said Anthea Milnes, Head of Marketing for Graduate Programmes at Cranfield School of Management.

Top-quality business education is notoriously expensive. In the States, MBA education can cross the $100,000 mark for one year of study alone. Some online-based UK programs are also considered premium in price, despite the rise of free, distance-taught courses.

But if graduates strike gold in the employment mine, it will be worth it. MBAs can recoup their losses within a year of graduation, if the latest employment figures are to be believed.

And a high of 94 per cent of those surveyed in GMAC’s report also rate their graduate management education as offering good to outstanding value, compared to its total monetary cost.

“Prior to joining Goldman Sachs in 2006 I worked like hell to try to get into any investment bank on Wall Street. And I was told at that point that I needed an MBA from a top-tier school to get credentials,” said Alex Figueroa, a 2010 MBA graduate from Dartmouth Tuck.

Alex says that an MBA can be beneficial when it comes to banking a job at Goldman Sachs, the leading investment bank, and in his case, he believes it would have been harder to have landed his job without one.

The figures might confirm his view. 89 per cent of business school graduates from the classes of 2010-2013 work for an employer, while 5 per cent are self-employed.

In Alex’s case, finance is still an ever popular choice. The biggest crop (26 per cent) of the most recent cohorts are in the finance/accounting sectors, followed by marketing and sales (21 per cent).

Consulting remains popular, but less so – 15 per cent of graduates now work in the function.

The rewards can be enormous, because employers are prepared to pay big for senior-level MBAs. In the U.S, the median base salary for senior-level graduates surveyed by GMAC was $122,000. Executive’s pay went higher to $175,000.

That dwarfs the $101,093 median starting salaries for European graduates GMAC reported last November, the highest in the world at the time.  

The colossal earnings MBAs in the West get are at the expense of some Asia Pacific and south-western European countries, however. Senior-level Indian graduates receive just $40,000, while those in Portugal, for example, fare slightly better at $81,525 but are still a long way behind North America, according to GMAC’s data.

The largest senior-level salaries are being netted in Switzerland, at nearly $180,000 per year, according to GMAC.

For business schools, employment figures have become an increasingly important part of its initial offering. Initiatives have been launched to bring careers departments closer to frontline managers. The Association of Business Schools also published a report that highlighted the need to design more practice into courses.

“The application of classroom knowledge in group assignments and projects for companies helps embed learning in skills and capabilities,” said Dr Sionade Robinson, Associate Dean of MBA Programmes at Cass Business School.

There has never been a better time to be an MBA. With some program applications declining and while MBA degrees are considered essential, business leaders can take advantage. And the rise of distance learning means accessing these degrees has never been easier.

Graduates would agree. In spite of the rocky employment road of yesteryear, 91 per cent of those who graduated between 2010 and 2013 said that given the choice again, they would still have pursued their degree. And 95 per cent of alumni GMAC surveyed said they would recommend their program to others.

What’s more, 77 per cent found their degrees financially rewarding, according to GMAC, and 77 per cent of business school alumni give financially to their alma mater, believing that their school proved valuable.

“It's a pre-conceived notion in your head that an MBA allows you to add more value to your career,” added Rajat.

However, the boom won’t last forever. As the management consultants at PwC London will tell you, the clock is always ticking towards a denouement. 

Student Reviews

Bayes Business School




On Campus

Best Journalism school in Europe

When I first stepped onto the campus of City, University of London, I knew I was in for a ride - and not just on the Tube! With its vibrant energy and an impressive repertoire of programs, City U became my home away from home. The Journalism program was kind of a big deal. Rumour was that we were the best in Europe! The lecturers were not just experts in their field; they’re practically journalistic royalty. They were invested, passionate, and had a knack for turning the most flat press release into a riveting news story. With their guidance, I’ve learned to navigate the chaotic world of media like a pro. The campus was a melting pot of every culture, being that we had such a diverse international crowd. Being in the heart of London, I had the world at my fingertips - there was always a new corner to explore, a hidden gem of a cafe to discover, or a street performer! City, University of London wasn't just a university; it was a chapter in my life story that I’ll never forget.




On Campus

Learning environment

The teacher-learner ration is manageable, giving each learner a chance to gain personal attention. It is also easier following up on the progress of a student, as the numbers per class is not large. the conducive environment for learning includes clean classes, standard desks, world class instructional facilities and the opportunity to engage lecturers even after their sessions. The team spirit at City is above board, with learners getting chance to learn both from instructors and colleagues. This is the university of choice; the place to be.




On Campus


I liked that each class had a manageable number of learners, making the professor-learner ratio favor knowledge acquisition. I also liked that study schedules were manageable, and not overwhelming. The focus on talents and gifts even within the learning environment makes it possible for learners to achieve the best of their potential, and this has worked to the advantage of those that have schooled at City, University of London




On Campus


The diversity at City University facilitates interactions and is a direction toward the unity of the world. The classes are well built to match the number and needs of all students regardless of the elements of diversity that set people apart. The use of technology in delivery makes learning even more interesting and achievable. At City University there is no distinction pegged on the issues that make people unique.




On Campus


The team of lecturers at the Uiversity are well experienced. Their level of insight and the methodologies of delivery works for the interes of the leaeners. My learning experience was largely boosted by the level of knowledge of the professors at the institution, and their passion to transfer the same to learners. I appreciate every class I attended because of the level of insight I was able to gather




On Campus

The best university I’ve been to

The campus and the people I've met have made it a wonderful experience. I was reared in a small town with a graduating class of only 88 individuals, so moving to City University was a huge adjustment for me. My dorm has more residents than my whole high school combined! I enjoy the atmosphere here, and everyone is so friendly. Outstanding academic options and a stunning campus. Really great from beginning to end. The educators genuinely love what they do, and the students are ready to learn. On or around college, there is always something to do with friends, and the social scene is particularly warm.




On Campus

Bayes Business School

As a student at City university attending Bayes Business School I would totally recommend choosing this university as the experience is exceptional with great social networking opportunities . Professors are significantly helpful, delivering with excellence and professionalism. Everyone is happy to help and make you feel welcomed in such an esteem university as City, offering exceptional development and guidance through out the course.




On Campus

Economics and Politics

Incredibly amazing university, the way they polish students and help them boost their morale and think intellectually is worthwhile. Many universities have international partnerships to allow exchanges between their students. The most obvious subjects for these opportunities would be those that involve languages, and the study of people and places.




On Campus

Clinical biology

I really like it it’s perfect for me with not too many people and not too few either. All the modules are amazing. I love the toy bar. I love all the societies that I’ma part of. Especially the colour Bollywood society