Best Business School 2015

by Jonathan Rodkin and Francesca Levy
from

Business school has been called a two-year job interview, and with good reason: For more than $100,000 and two years of study, MBAs hope to gain access to vast alumni networks, top-tier internships, and the very best jobs. Our annual ranking of full-time MBA programs now focuses on what most people hope to get after business school: a satisfying, well-paying job.

More graduate degrees in business are awarded each year than in any other field in the U.S., and new business schools are accredited by the dozen every year. To identify the best ones, we compiled data from more than 13,150 current students, 18,540 alumni, and 1,460 recruiters across 177 distinct B-school programs. The result is our deepest and broadest set of data ever.

This year, we’ve revised the way we rank schools. For the first time, we surveyed MBAs after graduation for more insight into what graduates can expect in their future careers. We detailed some of the standout findings about MBA alumni in a separate report—including a broad pay difference between male and female MBAs that starts small, but gets bigger as they continue their careers.

Older elements of our ranking, including a tally of faculty research, have been scrapped because they don’t get at our fundamental question: How well does this business school channel its graduates into good jobs?

You can dig into an exhaustive explanation of our ranking methodology below, which also details how it differs from previous years. Briefly, the Full-Time MBA Rankings are based on five parts:

• Employer Survey (35 percent of total score):  recruiter feedback on the skills they look for in MBAs, and which programs best equip their students with those skills
• Alumni Survey (30 percent):  feedback from the classes of 2007, 2008, and 2009 on how their MBAs have affected their careers, their compensation change over time, and their midcareer job satisfaction
• Student Survey (15 percent):  the class of 2015’s take on academics, career services, campus climate, and more
• Job Placement Rate (10 percent):  the most recent data on how many MBAs seeking full-time jobs get them within three months of graduation
• Starting Salary (10 percent):  most recent data on how much MBAs make in their first jobs after graduation, adjusted for industry and regional variation

With a sharper focus on what people most hope to get after business school, we think we’ve created the most effective ranking yet for helping career-oriented students choose an MBA program.

Full-Time MBA: U.S.

Full-Time MBA: International

Part-Time MBA

We also ranked part-time MBA programs, which differ from the traditional two-year MBA mainly because of their students, who often require flexibility and want to use the degree to advance within their company. They tend to be a little older than full-timers, and more than half return to their pre-MBA job, compared with one in 10 full-time graduates. Refer to our full methodology below for more in-depth information on how we composed these rankings.

Methodology

Full-Time MBA

Bloomberg Businessweek has ranked full-time MBA programs since 1988. Over time, we have shifted our methodology to focus on how well the programs prepare their graduates for job success. Our Employer Survey, which measures recruiter opinions on how well MBA programs equip their graduates with relevant skills, and our Student Survey, which records student feedback on how thoroughly they’ve been prepared for the workforce, have always been cornerstones of our rankings. This year we’re also unveiling several new components that reflect our focus on jobs in the 2015 Full-Time MBA Rankings: a first-ever Alumni Survey of MBAs who graduated six to eight years ago, as well as the most recently available data on job placement and starting salary.

Employer Survey (35 percent of total score)

To assess how well MBA programs prepare graduates for the jobs they want, we surveyed recruiters from companies that hire MBAs.

We asked schools to identify individuals recently involved in recruiting their MBAs. We invited 16,984 recruiters to take our survey; 1,461 recruiters at 672 firms completed the survey. We partnered with Cambria Consulting of Boston to run our Employer Survey, along with our Full-Time and Part-Time Alumni and Student Surveys.

We asked recruiters to identify up to 10 schools at which they had significant recruiting experience in the past five years. We then asked the recruiters to assess how well these schools’ graduates performed on specific qualities important to them when they recruit MBAs.

To ensure that employers that hired only a few MBAs did not have outsize weight in our analysis, we gave each company an index score representing the total number of MBAs it hired in 2013 and 2014 (estimated using a combination of data provided by schools, recruiters, and students). We then weighted recruiters’ raw scores by their index scores for employer size. Ratings from employers that hired many MBAs had greater impact than ratings from those that hired just a few.

Because the best MBA programs are well-regarded by a wide array of recruiters, the employer score was based equally on two components: its average rating by employers (a measure of the school’s quality in the eyes of recruiters); and the sum of ratings it received (a measure of the school’s reach).

It’s common for B-school alumni to take up the task of recruiting from their alma mater for their employer. Alumni, though, tended to rate their own school significantly more favorably than non-alumni who rated the school. Receiving favorable ratings from its own alumni says little about a school’s reach among recruiters, so we excluded alumni ratings while measuring each school’s reach. Alumni opinions of their own schools, however, remained a factor in the average (quality) rating.

Alumni Survey (30 percent of total score)

To examine the impact of the MBA on alumni job outcomes, our Alumni Survey sought responses from all graduates of the classes of 2007, 2008, and 2009.

We recorded 12,773 survey responses from alumni, representing a 29.43 percent response rate. To be included in our rankings, each school was required to have at least 16 percent of its 2007-09 alumni and at least 30 students respond to our survey.

Three types of Alumni Survey data contributed to our rankings in equal measure:

• (1) Median compensation increase

  Compensation increase is one of the best ways to show the impact of the MBA, because one data point comes from before a person enrolled in their MBA program, and the other data point represents post-MBA.

  We defined compensation as current base salary plus guaranteed and discretionary additional income earned in 2014, excluding signing bonuses.

  We calculated each alum’s compensation-increase ratio (most recent annual compensation divided by annual compensation directly prior to entering the MBA program), excluding alumni who got MBAs in joint-degree programs (since their career paths may differ systematically from regular MBAs) and MBAs whose current jobs are part-time. One-third of each school’s Alumni Survey score was based on the median ratio among its alumni.

• (2) Job satisfaction

  It’s important to make money, but what’s the point if you’re unhappy? MBA programs should set graduates on career paths that are going to fulfill them in all ways. That’s why we asked alumni how satisfied they are with their current job. The average response from all alumni at each school constituted one-third of the overall Alumni Survey score.

• (3) MBA feedback

  We asked alumni 16 questions about their MBA experiences, the specific impacts their MBA programs have had on their careers, and whether they would recommend their program to others. These data provided important context to the alumni compensation and job satisfaction numbers, allowing us to analyze the specific assets alumni gleaned from their MBA programs. Their survey responses made up the final third of the Alumni Survey portion of our scoring methodology.

In addition to generating data used for rankings, the Alumni Survey also included questions on businesses founded by entrepreneurial alumni, more detail about alumni career paths, and demographics.

Student Survey (15 percent of total score)

Recent graduates are the best judge of many MBA program features, like campus climate, effectiveness of career services, and responsiveness of faculty and administrators. That’s why we include the Student Survey in our rankings methodology.

We recorded 9,119 survey responses from graduates from the class of 2015, representing a 54.12 percent response rate. To be included in our rankings, each school was required to have at least 33 percent of its class and at least 30 students respond to our survey.

In addition to 27 questions that contributed to each school’s rank, the survey also generated non-rankings data on student demographics, career paths, personal budgets, debt, and priorities in pursuing an MBA.

We also included data from our 2014 Student Survey, to diversify the student feedback that contributes to this portion of the rankings. Data from 2015 made up 75 percent of each school’s Student Survey score; 2014 data made up 25 percent.

Student Survey audit:

To identify statistical anomalies in the Student Survey data, we enlisted Drs. Alan Gross and David Rindskopf, educational psychologists at the City University of New York. When survey responses were so positive that they became statistical outliers, we conducted additional investigation to ensure that neither students nor school administrators had violated our code of ethics, which forbids trying to influence students to provide positive ratings. This year we did not find evidence of cheating that would meet our standards for automatic removal from the rankings. Drs. Gross and Rindskopf also reviewed our Alumni Survey data using the same techniques, and we found no evidence of cheating on that survey, either.

Job Placement Rate (10 percent of total score)

Our data show that 88 percent of MBAs consider access to career services and employers a crucial part of the overall benefit of getting an MBA. Put simply: People get MBAs to get good jobs. And having taken two years out of the workforce to earn an MBA, they likely want to get back to work as soon as possible. That’s why the job placement rate three months after graduation is an important measure of a school’s success.

Schools provided us high-quality job placement and salary data for the class of 2014, representing all graduates whose job outcomes they were able to track (class of 2015 data were not ready at the time of data collection). Given how crucial these data are to schools, most of them have detailed job placement and salary data for more than 90 percent of their graduates. By using data provided by schools, our placement and salary statistics include data on nearly all recent graduates, not only those who took our Student Survey. Entrepreneurs, those continuing their education, and other graduates who did not pursue full-time employment were excluded from our analysis.

We define job placement rate as the percentage of graduates who secured full-time employment within three months of graduation, out of all graduates who sought it.

Starting Salary (10 percent of total score)

Another key measure of a school’s success is how much compensation its newly minted graduates fetch in the labor market. Schools meticulously record these data, which they shared with us for the purposes of ranking.

To create as level a playing field as possible, we ranked schools only on base salary figures (no other forms of compensation were included in our analysis), and we implemented controls to adjust for salary variation across industries and regions. Consulting salaries were compared with other consulting salaries, tech salaries with other tech salaries, European salaries with other European salaries, and so on. Each of six U.S. regions was its own playing field for our U.S. rankings, while all of North America functioned as a single region for our international rankings.

A school excelled to the extent that its graduates entering each region and industry bested other schools’ graduates entering that region or industry. The overall scores for schools were weighted in proportion to the number of graduates entering each industry and region. For example, if a program sent 60 percent of its grads to jobs in the Midwest, 60 percent of the school’s region-adjusted salary score reflects its performance in that region. Half of the starting salary score reflects region-adjusted median salary; half reflects industry-adjusted median salary.

Only graduates who accepted full-time employment (not as a business owner) within three months of graduation were included in our analysis of starting salaries.

Final Rankings

For our Full-Time MBA Rankings, scores for each of the five components were standardized using each score’s mean and standard deviation. Scores were then weighted and summed to reflect our rankings model of 15 percent Student Survey score, 35 percent Employer Survey score, 30 percent Alumni Survey score, 10 percent Job Placement Rate score, and 10 percent Starting Salary score.

Part-Time MBA Rankings are composed of 50 percent Student Survey score (75 percent 2015 data, 25 percent 2014 data) and 50 percent Alumni Survey score (33.3 percent alumni MBA feedback, 33.3 percent alumni compensation change over time, 33.3 percent alumni job satisfaction). Student Survey and Alumni Survey scores were standardized using mean and standard deviation and combined to create final rankings.

Each school’s ranking index score was calculated by dividing its weighted sum by the best school’s weighted sum and then multiplying by 100. The top school in each ranking received an index score of 100. Index scores show the difference in measurement between schools better than rankings do. For example, the difference between a school with an index number of 91 and a school with an index number of 90 is small. The difference between two programs with index numbers of 91 and 83, however, is substantial. In either case, though, the schools might be separated by only one ranking place.

Finally, a note to prospective students: Don’t let rankings alone make your school decision for you. Our rankings and data interactives offer a thorough picture of the current landscape of full-time MBA programs, but deciding where to go to school is a personal decision. A school that’s right for one student may be wrong for another.