Who Needs The Real World?

As enrollment dips, B-schools are taking more students without job experience

Last spring, as her friends celebrated on the eve of college graduation, Danielle Beyer was working on a 20-page paper due the next day. That's the downside of signing up for the University of Rochester's "3-2 MBA" program, allowing her to earn an undergraduate psychology degree in three years and an MBA from Rochester's William E. Simon Graduate School of Business Administration in two more. She has four months to go, but it has already paid off. In November, Beyer, 22, landed a job at National City Corp. with a pay package comparable to those offered to MBAs with years of experience. "I knew I would be coming out ahead," she says, "so I can't complain."

For a growing number of students like Beyer, the MBA race has turned from a marathon into a sprint. With the 2006 admission season well under way, many full-time programs -- including Washington University, the University of Texas, Stanford, and Harvard -- have begun to selectively drop the work experience requirement. That makes it easier for younger students to get through the door -- boosting application numbers -- and for women considering families to launch their business careers first. Janet T. Hanson, founder of 85 Broads, an advocacy group for women in business, says such policies may ultimately result in more women in the top ranks of business. Says Hanson: "It's a proverbial win-win."

A hallmark of MBA education for nearly 20 years, the work experience requirement started as a way to move up in B-school rankings, which frequently reward programs with more experienced students, who typically fetch higher salaries. Over the years it has become an integral part of the curriculum, with students learning as much from peers as from professors. So while accepting undergrads may bolster enrollment, it could also destroy the delicate pedagogical balance that makes many MBA programs work -- and send older students fleeing.

That's a risk some schools are willing to take. At Rochester, students with no work history account for nearly 20% of enrollment, and Dean Mark Zupan says that number could eventually reach 50%. The influx of young students has resulted in some "tensions," he concedes, but they are outperforming older students and receiving similar job offers. What's more, Rochester's relaxed policy on work experience allows the B-school to lure high-potential students who might be unreachable in five years. By then, Zupan says, many might be unwilling to forgo a big salary for two years of classwork, or will opt for a Top 10 program, not a mid-tier school like his.

Will the trend toward younger MBAs catch on? The applicant shortage that prompted the move shows signs of abating. But if applications don't pick up serious steam, don't be surprised if more B-schools post a "no experience needed" sign on the door.

By Geoff Gloeckler

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