A global survey of corporate recruiters by the Graduate Management Admission Council (GMAC) revealed that more employers plan to hire MBAs and other business school graduates this year. Approximately 80 percent of employers plan to hire MBAs in 2014, up from 73 percent in 2013 and 50 percent in 2009.
Percentage of Companies that Hire or Plan to Hire, by Candidate Type
Business School Graduate Hiring by Region
Asia-Pacific: Companies based in the Asia-Pacific region are shifting their focus toward expansion, and are expected to have the greatest growth rate in hiring business school graduates in 2014. While 83 percent of employers plan to hire MBAs, the greatest hiring growth is seen among non-MBA business master’s candidates, where 68% of companies plan to hire Master’s degree holders in Management in 2014 compared to 52% in 2013. Companies report that business graduates understand the market, have a strategic business mindset and are self-motivated.
Europe: In 2014, fewer companies are focused on reducing costs and 61 percent of European companies plan to hire recent business school graduates, up from 52 percent in 2013. Additionally, 46 percent plan to hire Master of Accounting graduates compared to only 33 percent in 2013.
United States: The U.S. hiring outlook for business school graduates in 2014 shows signs of modest growth, with 86 percent of employers planning to hire MBA graduates this year, up from 81 percent in 2013. A growing number of companies plan to hire non-MBA business school graduates. Forty-six percent plan to hire Other Specialized Business Master’s graduates, an increase of five percent compared to 2013. The largest increase in MBA hiring is expected in the West.
According to Crain’s Detroit Business, while many MBA graduates seek jobs with consulting firms, or within marketing and finance, non-traditional industries such as energy and pharmaceuticals or healthcare may offer better job prospects. Approximately 90 percent of pharmaceutical companies plan to hire MBAs in 2014. Stephen Munk, president of Ash Stevens, Inc., a company that makes ingredients used by drug companies, says that pharmaceutical companies are looking to streamline manufacturing and research activities and MBAs can play an important role in how these two sides of the industry communicate.
Worldwide Hiring, by Industry and Candidate Type
U.S. employers expect to offer MBAs a median base salary of $95,000, higher than the projected median salary for direct-industry hires of $83,000. Median base salaries for specialized business master’s graduates range from $63,000 for Master of Accounting to $73,000 for Master of Finance. This is substantially higher than for bachelor’s-degree graduates who can expect to receive a median starting salary of $50,000.
In Europe, recent MBA graduates can expect a median starting base salary of $69,018, though starting salaries range from $41,000 (25th percentile) up to $104,000 (75th percentile). Asia-Pacific has the lowest median base MBA salary at $21,340.
Skills in Demand
Employers say that communication, specifically oral communication, is the most important skill they seek in new hires, on average twice as important as managerial skills.
Skills in Demand for New Business School Graduate Hires
The growth of big data and analytics across functional areas and industries is also cauing a demand for business school gradutes with quantitatve and deep analysis skills. McKinsey & Company predicts that by 2018, the U.S. will have a shortage of nearly 200,000 people with analytics skills. Many of the leading business schools recognize this gap and are rolling out big data courses or incorporating data classes into their curricula.
Temp Jobs for MBAs
Companies with positions to fill at the MBA level are increasingly turning to temporary agencies and independent consultants. Bringing on a consultant with a graduate business degree allows companies to acquire the skills needed for certain projects without the liability and financial burden of retaining the worker as a permanent workforce addition. Engaging an independent contractor is also signifanctly inexpensive compared to hiring a management consultancy team on a project-basis. It has been reported that by using an MBA student or recent grad instead of a professional management consulting firm, businesses can save themselves over $18,000 for a consulting job lasting 35 hours.
Due to the uncertain economy and the ongoing challenge of finding work-life balance, many MBA graduates are opting to become temps by choice. The Business Talent Group (BTG) says that MBA holders who work as business consultants rather than direct employees enjoy both a higher salary and less stress in their careers.
Specialized online job service companies are emerging to broadcast business vacancies and offering to match them with business school graduates who want to work on consulting gigs with no long-term commitment. This model of ‘rent an MBA’ is especially popular with startups, small businesses, and firms operating on lean budgets. According to a recent research study, 35 percent of firms with more than 1,000 employees would be interested in freelance MBA consulting. This number jumps to 80 percent for firms with fewer than 50 employees.
“Companies can choose someone who is hyper-specialized and work with them only for the exact amount of time that they need to.” ~Daniel Callaghan, CEO of MBA & Co.