Nate Kumapayi thought he might have trouble getting into business school. His grade point average was unremarkable, his Graduate Management Admission Test scores were middling, and his résumé consisted of two years of entry-level sales jobs.
He's a persuasive talker, though, and wooed interviewers at several top schools. He told them how he’d decided to get a MBA after starting conversations with executives who came into the AT&T retail store where he worked, and discovering how many of them did business with an MBA in hand. He emphasized how selling phones for AT&T honed his knack for getting people to buy things.
When he was accepted to the School of Management at Yale University, he didn’t think he could be more elated—until, several months later, he got in to the University of Rochester’s Simon School of Business. Simon has a lower profile than the Ivy League behemoth, but it boasts something unusual among American MBA programs: a large cohort of black students. “I wanted to go to a school where there were going to be people like me,” says Kumapayi.
There aren't many. True to popular conception, MBA students are overwhelmingly white or Asian. Schools don’t have to identify the racial or ethnic breakdown of their classes, and reliable data are hard to come by, but among the 5,300 U.S. MBA candidates surveyed by Bloomberg Business for our 2014 full time MBA rankings, just 6 percent identified themselves as black; another 6 percent said they are Hispanic.
Compared with the population at large, that’s strikingly low. It's also below the national average for overall graduate school enrollment for U.S. blacks and Hispanics, which has been rising over the past decade—it’s now 12 percent for blacks, 9 percent for Hispanics.
It's also an indication, critics say, that business schools are out of step with the companies that rely on them for talent. As American businesses prepare to serve a marketplace that is less and less white, that mismatch threatens to become a liability. "Hispanics are going to be a very important part of our economy," says says Manny Gonzalez, the chief executive officer of the National Society of Hispanic MBAs, and business schools aren’t preparing for that future. "They see the flood coming, and they are not building the bridge to cross it."
Corporate recruiters consistently bemoan the lack of qualified candidates of color and seem to be willing to pay a premium to nonwhite (and non-Asian) new hires. Among American MBA candidates at U.S. schools, blacks and Hispanics who accepted jobs by April 2014 earned around $2,000 more per year than white and Asian grads.
Business school deans and admissions officers say they're doing all they can, that their student populations reflect their applicant pool and that they can’t admit students who don’t apply or who aren’t qualified. Blacks and Hispanics make up just 15 percent of people who take the Graduate Management Admission Test, and more than half of black and Hispanic test-takers score less than 500. (The average for U.S. test takers is 537; at elite schools, it’s more like 700.) Blacks and Hispanics may also have a disadvantage coming out of undergrad, experts say: They may not have the same networks of professionals who can fast-track them for corporate jobs and, later, MBA programs.
“A lot of schools [are] competing for a smaller pool of applicants,” says Bruce DelMonico, the director of admissions at Yale School of Management. Eighteen percent of U.S. students who started at Yale’s business school in 2014 were black or Hispanic, according to the school. “We want to increase the percentages, but we also need to make sure that the people we are bringing in are qualified."
In spite of the challenges, Simon and a handful of schools have still managed to cultivate fairly diverse student bodies. At the University of Miami, 22 percent of U.S. students starting the program in 2014 were black and another 20 percent were Hispanic. Pittsburgh, USC, and Wake Forest have made themselves popular among black students. Florida International University, Syracuse, and Babson have done the same among Hispanics.
Administrators struggle to articulate exactly why they’ve been successful attracting more minority candidates. They have student affinity groups and offer scholarships to black and Hispanic students—one of the few kinds of financial aid available to aspiring MBAs—but so do other schools. The difference may be more subtle, says Peter Aranda, the CEO of the Consortium for Graduate Study in Management, which provides scholarships, academic support, and help with applications for minority students. "I don’t have data that says that it’s because [students experience] a sense of belonging to something that’s bigger than them, but in my gut I believe it," he says.
Once a school establishes a broad contingent of black and Hispanic students and alumni, it becomes an asset in recruiting more of these students. The company of other black students was a pleasant surprise for Kwaku Owusu, a classmate of Kumapayi’s at Simon. “You don’t expect to see that many black people,” he said. Having a strong connection to other black students was professionally important, he says. It also made the day-to-day grind a little less uncomfortable. “You are going to business school, and the first year is difficult. You just want someone you can relate to.”
Part of some schools’ ease in drawing in minorities is due to their geography. Florida International University's College of Business had the highest proportion of blacks and Hispanics of any ranked school, and its dean, David Klock, attributes the schools’ unparalleled success on this measure to the mélange of ethnicities that live in Miami. At the University of Miami's School of Business Administration, Dean Eugene Anderson says over 40 percent of MBAs are black or Hispanic because the school focuses on "leveraging our local assets"—its hometown, in B-school-speak.
It also helps that these regional schools require lower GMAT scores, a stance that some advocates would like to see elite programs adopt. Test scores are often just a reflection of who can pay for test prep, says Aranda, and looking outside the upper echelon of test takers would not mean sacrificing quality.
If schools want to keep their numbers intact, they could invest in helping minority candidates ace the exam, says the NSHMBA's Gonzalez. Last year, NSHMBA and Veritas, a test prep organization, covered the cost of a $2,000-per-student GMAT prep class for 50 students and saw scores rise by 88 points, on average, on a test whose the lowest possible score is 200 and the highest is 800. He would like to see each of the top 50 business schools commit to funding at least 50 students for this year’s program.
But both Aranda and Gonzalez agree that schools—particularly elite schools, which are among the least diverse—are kidding themselves if they think they're currently doing all they can. “They believe that the efforts that they are doing right now are giving them all of the candidates [who] exist,” says Aranda. "Everyone's kind of stuck in the same place."—With Jonathan Rodkin