Over the past two decades, leading business schools have moved aggressively toward enrolling full-time MBA students averaging four to six years' prior work experience rather than admitting candidates directly out of undergraduate studies. The tilt toward greater experience has coincided with the advent in the late 1980s of media rankings focusing on average starting salaries of graduates, among other factors, and average starting salaries are naturally higher for graduates with more work experience. This shift has taken hold despite compelling evidence that pursuing an MBA earlier benefits students, especially women, along with corporate recruiters and even business schools themselves.
We at the University of Rochester's Simon Graduate School of Business decided it was time to reassess the conventional wisdom that candidates with more experience are better MBA students. We developed an Early Leaders initiative to attract top MBA applicants from zero to three years out of college—highly competitive candidates with smarts, drive, presence, and character. These students now constitute one-third of our entering classes, and the impact on students, recruiters, and our school has been strongly positive.
By investing in a full-time MBA, the average experienced student can expect to add $170,000 in value, net of tuition, by the age of 30. The comparable increase in value for the typical Simon Early Leader is $340,000 by the same age. The younger students secure the post-MBA salary jump sooner and then see it compounded by subsequent annual wage increases. (For details, see www.simon.rochester.edu/pdf/mbanowvslater.pdf.) They also sacrifice less to attend business school. In contrast, older students give up more in salary, face higher moving costs, and are more likely to have spouses who also need to relocate and/or young children whose care and schooling must be considered.
Easier for International Students to Relocate
Women in particular find it advantageous to pursue an MBA earlier because the work-family balance can become more difficult with time, especially as young children are added to the mix. Half of the Early Leaders in the most recent Simon MBA class are women. By contrast, across all top 30 business schools, student bodies are less than 30% women (a proportion that holds for Simon's more experienced students as well). International students also find it easier to relocate when they are younger and more mobile. We at Simon feel strongly that the resulting more diversified student body benefits everyone.
Giving students the option to pursue an MBA sooner is a key factor in the Simon School's performance in BusinessWeek's most recent ranking of student return on investment for full-time MBA programs. Simon finished seventh—third highest among private schools.
Internal surveys also show that the younger admits are at least as happy with our program as their more experienced counterparts. And more experienced Simon students who are actively involved in screening these students report being at least as pleased, on average, with their team performance as they are with other more experienced students—a sentiment echoed by the faculty and second-year MBA coaches.
Positive Response from Recruiters
Recruiters visiting Simon report a higher level of satisfaction with our students since we have begun the Early Leaders initiative. This finding is corroborated by BusinessWeek's most recent survey in which Simon evidenced a 13-spot jump in recruiter satisfaction and was one of only a handful of schools whose students earned straight As for their team-playing, analytical, and communication skills.
The program offers recruiters the opportunity to achieve greater diversity in their hiring in terms of age, gender, and race/ethnicity. And recruiters note several other positives associated with the younger students: technical savvy, openness to new ideas, ability to be integrated effectively into a company's particular culture, and willingness to roll up their sleeves and do whatever it takes to get the job done.
Since starting the Early Leaders program in 2005, our full-time enrollments have increased by 40% (vs. an average of less than 25% at other top schools), and we have seen significant improvements in incoming student quality and diversity. Our faculty and staff are impressed with the academic performance of the students as well as the extent to which these students have been willing to take on leadership roles in the classroom and in Simon's social life and community outreach.
Higher Returns on Investment
Recruiter satisfaction has positively affected our placement experience, and we have even realized some fund-raising benefits—five gifts announced in November, 2007, constituting a $5.4 million package, were from alumni who entered Simon straight out of college or from supporters of the Early Leaders program.
Business schools teach MBA students to solve business problems creatively and to make tough decisions in real-world situations. Our initiative targeting less experienced students exemplifies our willingness to put into practice what we teach by making business education more accessible to a broader group of students and enhancing the experience of our students while at Simon. We look forward to the returns on this investment being further realized by our students, recruiters, and Simon.