The demand for business school graduates is set to increase in 2021 compared to the previous year, according to a survey by Graduate Management Admission Council (GMAC).
The annual 2021 Corporate Recruiters Survey by the global association of leading graduate business schools said that corporate recruiters project a robust demand for business school graduates.
Here, nine in ten of them expecting it to increase or remain stable in the next five years. In addition, a higher proportion of recruiters in 2021 (37 percent) expect the demand to increase than that in the previous year (30 percent), with more than half of the European recruiters (54 percent) sharing such a view compared to their Asian (32 percent) and American (34 percent) counterparts.
"In a little more than a decade, the proportion of surveyed recruiters planning to hire MBA graduates has grown significantly, a trend especially notable in Europe, where the percentage jumped from 44 percent in 2010 to nearly twice as much (86 percent) in 2021, and in the United States, where it grew from 56 percent to 94 percent, a 68 percent increase," said Sangeet Chowfla, president and CEO of GMAC.
As corporations recover from the pandemic and rebuild their workforces, he explained that it is no surprise that business school graduates are specially strengthened in their value proposition as an employee.
The survey said that MBA salary and hiring are expected to return to pre-pandemic levels. In 2020, the projected MBA median salary reached an all-time high of $115,000 before COVID- 19 severely disrupted the global economy and caused it to drop down to $105,000 three months into the pandemic.
However, the median MBA salary for 2021 is projected to recover to its pre-pandemic 2020 level of $115,000. At this rate, the median salary of MBA graduates is 77 percent more than those with a bachelor’s degree ($65,000) and 53 percent higher as compared to those hired directly from industry ($75,000).
This salary premium shows that investing in an MBA credential continues to pay off over time, helping an MBA graduate earn $3 million more in his or her lifetime than someone holding only a bachelor’s degree.
Before the pandemic, 92 percent of recruiters indicated they were planning to hire MBA graduates in 2020. However, the disruptions caused by COVID-19 adversely affected those plans, and hence the actual hiring of MBA graduates (80 percent) was lower than 2020 projections.
Looking ahead, the proportion of recruiters planning to hire MBAs in 2021 (91 percent) returns to the same level as pre-pandemic 2020 (92 percent).
The MBA hiring projections exhibit strength across key regions and industries. Specifically, 95 percent of the recruiters in the consulting sector, an industry in most demand by MBA graduates, are projecting to hire them—a reversal from the 2020 actual hiring of 76 percent.
Technology industry leads charts
According to survey respondents, demand for MBA graduates by the technology industry is anticipated to increase by 10 percentage points in 2021 compared to pre-pandemic 2020.
In fact, with 96 percent of tech recruiters projecting to hire MBA graduates in 2021, the demand for MBA talents tops the previous three years. The data also show that two in three (68 percent) recruiters in the technology sector agree that leaders in their organisations tend to have a graduate business school education—an increase of 11 percentage points from 2020 (57 percent).
"Technology companies are placing a high value on leaders who are not just technically skilled, but also have strong strategic, interpersonal, communication and decision-making skills," said Peter Johnson, Assistant Dean of UC Berkeley's Haas School of Business.
Online programmes have been gaining traction in recent years. According to GMAC data, 50 more online MBA programmes accepted GMAT scores in the testing year (TY) 2020 as compared to five years earlier in TY 2016.
In addition, 84 percent of online MBA programmes reported an increase in applications in GMAC’s 2020 Application Trends Survey.
However, when corporate recruiters were asked about their level of agreement with the statement 'My organisation values graduates of online and in-person programmes equally,' only one-third (34 percent) of them agreed.
In terms of industries, recruiters from the finance and accounting industry (41 percent) are more likely to view graduates of online programmes as equal to their on-campus peers, compared to their recruiting counterparts in consulting (25 percent) or technology (28 percent).
As online programmes are clearly a fast-growing area of graduate management education, the survey said that sustainability of demand will require a higher level of acceptance by employers. This is particularly true when GMAC’s latest candidate research suggests a similar disparity in terms of perception of online versus in-person programs.
"As business schools continue to evolve modalities and more candidates are able to access MBA and business master’s programmes through online delivery, this presents the graduate management education community with an opportunity to align expectations and outcomes for graduates and corporate recruiters," said Chowfla.