MBA Jobs Outlook: Mixed Bag at Best

MBA Jobs Outlook: Mixed Bag at Best
More companies are hiring MBAs, and those that do are hiring more, but not all the news is positive (Photograph by Chris McGrath/Getty Images)
Photograph by Chris McGrath/Getty Images

When the MBA Career Services Council (CSC) reported the results of its Fall 2011 survey in March, the outlook for 2012 MBA hiring was uncertain. Fewer schools reported an increase in on-campus recruiting, most of those that did reported modest ones, and the outlook in financial services and consulting—the two industries on most MBAs’ short list—was cloudy, if not outright grim. But all that appears to be changing. Emphasis on appears.

The Graduate Management Admission Council (GMAC) on Monday released two reports: one on its 2012 survey of 1,096 recruiters at more than 800 companies in 40 countries, the other on its survey of 6,292 business students at 136 schools worldwide. Both were conducted in February and March, about six months after the CSC survey.

What’s changed? The number of companies planning to hire MBAs, for one. Overall, 79 percent of companies said they planned to hire recent B-school grads in 2012, up from 72 percent in 2011. That will make 2012 the third consecutive year of increases. Improvements were reported in the U.S. and Asia-Pacific (but not Europe) and in all industries, including double-digit increases in technology (22 percent), nonprofit/government (19 percent), and energy (14 percent).

Not only are more companies hiring MBAs, those that do are hiring more of them—an average of 17.4 per company, up from 13.4 a year earlier, for a year-over-year increase of 30 percent. In the past three years, companies have consistently underestimated the number of MBAs they would hire; if the same is true this year, that figure could easily grow. While companies are hiring more MBAs, the big winners appear to be accounting students; the average number of new hires with graduate accounting degrees is expected nearly to double, from 27.9 to 51.7. The big losers: experienced “direct from industry” hires. In 2011 companies hired 134.5, on average; in 2012, they expect to hire 79.

The news from the student survey is equally encouraging. Overall, 64 percent of Class of 2012 full-time MBA job seekers had offers at the time of the survey, nearly matching the record set in 2001, when 66 percent had offers. Job offers for students in part-time and executive MBA programs are at an all-time high.

Even so, it would be a mistake to assume that everything in B-school land is just peachy. It’s not. Salaries, for one, are stagnant. Globally, only 13 percent of companies told GMAC they plan to increase MBA starting salaries in 2012 above the rate of inflation; 35 percent plan increases that match inflation, and 50 percent plan to hold the line on salaries.

In fact, except for a small surge in 2011, when the expected median salary for new MBA hires at U.S. companies hit $92,000, that figure has been stuck at $90,000 since 2008, according to GMAC data. That means many, perhaps most, MBAs never recovered from the global financial meltdown that year—almost every graduating class since, at least in terms of purchasing power, is demonstrably worse off.

And all those job offers? If you read the GMAC fine print you’ll learn that an awful lot of them were for jobs the MBAs never wanted. What they wanted were jobs in products and services (23 percent), consulting (20 percent), and finance and accounting (18 percent). What they got were job offers in manufacturing (76 percent), health care (70 percent), and technology (70 percent). In GMAC-speak, they experienced “considerable variation between the industries where they preferred to work and the industries where they actually received job offers.” In plain English: They spent a fortune and still had to opt for Plan B.

The MBA is still a degree that employers are willing to pay handsomely for. On average, GMAC says, they pay about $40,000 more than they would for someone with a bachelors degree only (a misleading little statistic, since virtually all students entering an MBA already have at least a few years of work experience). But something is happening to the economics of business schools, something that looks an awful lot like a mass revaluation of the degree. The cost is higher than ever, the financial benefits are beginning to slip, and more MBAs are churned out every year than the world knows what to do with.

I’m not sure where this ends—a robust economic recovery that gives the market for MBA talent a new lease on life, or MBA fry boys working at the local McDonald’s. But it seems as if the degree that was once a golden ticket to a life of material wealth now has more in common with another kind of ticket: the scratch-off kind I can buy at my local bodega.

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