More companies plan to hire MBAs and other business school graduates this year, according to a global survey of employers. Some 80% of business school recruiters plan to hire MBAs in 2014, up seven percentage points from last year and 30 percentage points higher than 2009, when just half of employers hired MBAs during the economic crisis.
The 13th annual Corporate Recruiters Survey of 565 employers from 44 countries was conducted in February and March by the Graduate Management Admission Council, which administers the GMAT exam on behalf of business and management programmes worldwide. The survey, including 32 of the top 100 companies in the FT 500 and 36 of the Fortune 100, was conducted in partnership with EFMD and the MBA Career Services and Employer Association.
“More companies in all sectors and across the world plan to hire business school graduates, with projected hiring rates the highest for all degree types since the great recession started in 2009,” says Sangeet Chowfla, GMAC CEO and president.
“MBAs have always been valued by employers, but this survey shows that as the economy improves, employers see MBAs as a good investment into their future,” he says.
An optimistic hiring outlook for MBAs and other master’s-level business graduates comes as fewer companies are focused on overcoming economic challenges. Companies focused on growth and expansion are more likely to have improved hiring plans.
The upbeat forecast echoes the general decline in the percentage of companies with a focus on overcoming economic challenges, from 58% in 2009 to 25% this year, as well as reducing costs, from 66% in 2009 to 45% this year. At the same time, the percentage of employers planning to hire new bachelor’s degree graduates is holding steady, down one percentage point from the 75% that hired bachelor’s graduates in 2012 and 2013.
“This year’s survey paints a very positive picture for the business education sector and clearly shows how companies and recruiters value the whole portfolio of business degrees. Despite all of the doom and gloom, the clear message from the market is that business schools are providing the talented, bright individuals that companies need,” said Prof Eric Cornuel, CEO and director general of EFMD.
“With the global economy moving forward at a more solid pace in 2014, MBA CSEA is pleased to see that 80% of companies intend to recruit MBAs this year, that salary gains are being realised for MBAs in regions such as Asia-Pacific, and that industries such as consulting have been increasing recruitment since last year. These are all positive signs for MBA graduates and talent in the pipeline,” said Mark Peterson, president of the MBA Career Services & Employer Alliance and director of graduate business career services, Iowa State College of Business.
About GMAC and the GMAT exam
The Graduate Management Admission Council (www.gmac.com) is a non-profit education organisation of leading business schools and owner of the Graduate Management Admission Test (GMAT®), used by almost 6000 graduate business and management programs worldwide.
GMAC is based in Reston, Virginia, and has regional offices in London, Gurgaon and Hong Kong. The GMAT exam—the only standardised test designed expressly for graduate business and management programmes worldwide—is continuously available at approximately 600 test centres in 83 countries.
In India, the GMAT is accepted for admissions at 230 programmes offered by 112 business schools and is offered on demand and year-round at 17 cities in India through 20 test centres. More information about the GMAT exam is available at mba.com , the official GMAT website of India.
Projected hiring for 2014 versus hiring from previous years
Some 83% of employers in Asia-Pacific, 61% of European employers, and 86% of US employers plan to hire MBAs this year, all increases from 2013
Half of the employers surveyed plan to hire master in management graduates, up from 45% past year and 18% in 2009
45% of employers plan to hire master of accounting graduates, up from 36% last year and 17% in 2010, the first year data were available for these graduates
44% of employers plan to hire master in finance graduates, up from 39% last year and 41% in 2012, the first year data were available for these grads
74% of employers plan to hire bachelor’s degree graduates, down slightly from the 76% peak in 2011 but much higher than the 56% that hired in 2009
Out of communication, managerial, teamwork, leadership and technical skills, employers say communication skills are the most important ones they seek in new hires, on average twice as important as managerial skills
Median base salaries employers expect to offer MBAs are US$95,000 in the US and US$69,000 in Europe, as compared with US$50,000 for US bachelor’s graduates and US$41,000 for European bachelor’s graduates. Projected median MBA base salary in Asia-Pacific is US$21,340
‘Specialised MBA is gaining ground’
Michelle Sparkman Renz, director, research communications, GMAC
How many Indian companies and MNCs in India want to hire MBAs this year?
GMAC conducted the 2014 Corporate Recruiters Survey with responses from 565 employers in partnership with EFMD and MBA Career Services and Employer Alliance organisations. The study includes 32 of the top 100 companies in the FT 500 and 36 of the Fortune 100 and was facilitated by schools. The hiring statistics in this new 2014 survey of corporate recruiters includes firms based in 11 Asia-Pacific locations (including India, Philippines, China, Hong Kong SAR, Singapore, South Korea, Thailand, Australia, Japan, Malaysia, Taiwan) and represent 11% of the worldwide respondents. Although India led in the number of firms from a single country in APAC, the data for Indian companies appears as part of the combined APAC data points.
Due to smaller sample sizes there was insufficient data to calculate a percentage for Indian firms that want to hire MBAs this year. For a view of the 2014 India jobs report, we’ll be looking to see stats in our forthcoming report facilitated by some of India’s best business schools and what their job offer success was, the GMAC 2014 Global Management Education Graduate Survey is expected to be published in early June
Indian companies planning to hire master in management studies graduates, master of accounting graduates and master in finance graduates? What are the kind of numbers of MBAs (to be hired) are we looking at?
Among expected new hires in 2014, employers in Asia-Pacific show the greatest demand for hiring MBAs (83% of APAC firms expecting to hire these candidates, compared with 70% in actual hiring in 2013). Yet, the greatest increase in hiring demand for specialised business master’s degree holders (65% of APAC firms expecting to hire these candidates, compared with 47% in actual hiring in 2013) and master of finance degree-holders (57% of APAC firms expecting to hire these candidates, compared with 40% in actual hiring in 2013). This suggests a continued reliance on the skills MBAs offer a company, as well as the specific skill sets a MFIN or specialised master’s degree in data analytics or engineering management, or a range of master’s degrees might offer to help meet organisational goals. Our CEO Sangeet Chowfla observed that “MBAs have always been valued by employers, but this survey shows that as the economy improves, employers see MBAs as a good investment into their future”
Why do you think communication skills have become important for employers? Would these hiring positions involve international travel?
Companies in the rolodex of business schools expect talent to possess a range of skills, and have always looked for a blend of technical (hard) and soft skills. Perhaps today firms are more aware of the importance of fit, interaction, and how essential these skills are among employees and how they are not to be taken lightly. Schools have introduced more programmes in professional development, leadership development, and communications – mindful that firms today are more selective in their hiring pools and attentive to what differentiates job candidates. Often it’s the soft skills that can differentiate an MBA or master’s degree holder and enable them to stand out from others. GMAC began conferring with employers and schools on student self-awareness and career enhancement, and introduced ReflectTM www.gmac.com/reflect as a soft skills assessment to assist candidates.
Notable quotes from APAC participants included in the report:
“Eager to grow, driven, and tend to be self-motivated. They have been exposed to the industry, and are relatively experienced and aware of what entails the rigour of a marketing job,” says a products and services employer in Asia-Pacific.
“The graduates are more mature in personality, have clearer career development plan, trained in finance, management or business development,” says a finance and accounting employer in Asia-Pacific
What about median base salaries in India?
Median base salary for Asia-Pacific firms aiming to hire recent MBAs in 2014 is US$21,340 (US$32,500 at the 75th percentile, and US$11,000 at the 25th percentile); Illustrating the value that companies place in the value of a graduate management degree, the median salary is nearly the same salary APAC firms expect to offer to a new hire direct from industry.
As told to Ayesha Banerjee