John W. Payne recently finished a five-year strategic plan for Duke University's J.B. Fuqua School of Business. The deputy dean's No. 1 goal: Expand the school, starting with adding nearly 30 faculty members to its tiny 68-person roster by 2005. That's ambitious for any B-school nowadays, admits Payne: "If we do it by 2006, even, I'd throw a party."
Indeed, the job of finding B-school profs isn't getting any easier. The biggest obstacle? As faculty openings expand, the number of new PhDs in business and management is nearly flat. In the most recent survey of earned doctorates, conducted each year by the National Opinion Research Center, the number of business-oriented PhDs has grown a meager 3.5% over the past decade, while fields like biology and history have grown 36% and 88% respectively.
HIGH STAKES. In 1999, the most recent year studied, 1,104 PhDs were awarded in business fields--and only half of these new doctorate-holders headed for a career in academia. That's not nearly enough to meet demand, say many B-school deans. "The pool is getting smaller so we're all competing harder--it creates some tension," says Awi Federgruen, senior vice-dean at Columbia University Graduate School of Business, which has 12 vacant positions and plans to expand.
Indeed, about 250 positions are now vacant at BusinessWeek's Top 30 business schools. Add in the second tier of 20 schools, and that number soars past 400. Beyond the top schools, more than 300 accredited B-schools in the U.S. need to stay staffed. The stakes are high: A top-notch faculty is key to drawing corporate support, research funds, and top applicants.
On top of dwindling PhDs, faculty are being lured away by big salaries at consulting firms, think tanks, and even other B-schools. "We're getting into a sort of worldwide free agency," says Edward A. Snyder, dean of University of Virginia's Darden Graduate School of Business Administration. With several schools competing for the same people, B-schools are learning about the war for talent the hard way.
Just ask Nancy Rothbard, an assistant professor of management at University of Pennsylvania's Wharton School. The 1998 PhD had interviews at 13 schools and got offers from seven when she hit the job market in 2000 after a two-year fellowship. "There are so many choices now, it's a little overwhelming." Just to snare someone like Rothbard means offering a salary upwards of $130,000, not including research support and other perks. That's nearly double the starting salary of, say, a history PhD.
When faculty positions don't get filled, B-school professors are often asked to teach extra classes, leaving less time for research, a must-have for achieving tenure. "We spend a lot of time recruiting--time we could spend doing what we're here to do," says Craig R. Fox, an associate professor of management at Fuqua, where many professors have pitched in during the school's expansion.
One solution for schools: Hire PhDs from outside the business and management fields, such as social sciences PhDs, something B-schools did back in the growth spurt of the 1970s. Such arrangements take time to pay off, though. Concedes Richard Schmalensee, dean of Massachusetts Institute of Technology's Sloan School of Management: "We and others end up hiring people who don't know a lot about business." At MIT, these faculty members get light course loads in their first four years or more, leaving them time to learn about business--and about teaching MBAs.
Some schools are also hiring practicing business professionals. But these nonacademics don't satisfy the research demands of academia. And deans are wary of bulking up with nontraditional faculty who tend to teach popular hands-on courses, leaving the esoteric fare for tenured faculty--a divide that can dampen academic discourse and create faculty rifts.
But paying big salaries for stars, luring execs, and waiting for crossover faculty to find their business sense probably won't be enough to bolster faculty rosters. To fill the near-empty PhD pipeline, B-school leaders need to reach deep into the pool of undergraduates and get them hooked early on the study of business. By Jennifer Merritt in New York