MBA job availability and salaries, according to two influential surveys, are on the mend.
Two of the world’s best-researched surveys on the international MBA world suggest that MBA salaries and employment rates in Europe for business school alumni and graduates is recovering, after a three-year dip. The MBA is also shown, in both reports, to be a qualification that has retained its very high return on investment (ROI) despite the economic downturn.
For MBA alumni, the employment picture in Europe is far rosier than for non-MBA graduates. According to the GMAC Alumni Perspectives Survey 2012, 6% of MBA alumni respondents had not yet found employment, a far lower rate of unemployment than among their non-MBA peers. The European Union unemployment rate was 10.3%, in October 2011, according to the European Commission Eurostat.
The GMAC report was produced by the Graduate Management Admissions Council, which owns and organizes the GMAT MBA admissions exam, which is required to enter most of the world’s leading business schools. The QS TopMBA.com Jobs and Salaries Trends Report 2011/12 found results in most criteria agreed with GMAC findings.
The QS report adds that MBA employment in Europe has increased by 7% over the last 12 months, after a downturn in 2009 into early 2011. Despite continuing economic uncertainty and hiring restraint on the part of banks, MBA demand in Western Europe has strengthened, “with particular dynamism in the UK (34% growth) and Germany (28% growth), fuelled by the consulting and industrial sectors.”
Nunzio Quacquarelli, managing director of QS, the career and employment experts that produce the annual QS TopMBA.com Jobs and Salary Trends Report, predicts an increased upturn over the following period: “The report forecasts that the big jump in MBA careers demand in 2010-11 will continue into 2012 across the major MBA hiring sectors, with the possible exception of finance.”
Dominique D’Arcy , manager of Manchester Business School’s career management service, agrees that “during the recession, recruiters were most reluctant to make any commitments, we are now seeing a sustained increase in energy and technology recruitment, and the consulting sector is buoyant, providing us with a steady stream of opportunities.”
In salary terms, the picture in Europe seems to be improving.
There is no question, in either report, that average salaries for MBA alumni have returned to their 2008 peak across the board. But after a three-year period of decline from 2009-2011, European MBA salaries seem to be stabilizing and even rising again in many sectors, following a pattern that occurred during the last downturn in 2002.
At that time, MBA salaries plummeted as MBA recruiters slashed hiring and salary budgets. When the inevitable upswing occurred, recruiters found themselves in a war for talent, scrambling to find the best MBA talent around, which resulted in the peak salaries of 2008.
This time, though Western Europe felt the full force of the credit crunch and recent financial crisis, MBA demand has remained relatively robust. According to the QS report, MBA salaries in Western Europe adjusted upwards by almost 10% from the previous year and are now again the highest in the world at an average US$93,400.
The GMAC survey adds that, although salaries for MBAs working in Europe are high, and that European citizens had the highest starting salaries among their 2011 classmates, the dip in European salaries has not gone unnoticed by business school graduates. The survey says that those respondents on European salaries “were not as satisfied with their initial salaries, with only 79% reporting their salary expectations were met.”
The clincher for most MBA candidates considering enrolling is the return on investment (ROI) on the cost of attending business school, and the MBA, according to the reports, pays for itself on average in four years. “After ten years post-graduation,” the GMAC report says, “alumni have nearly doubled their return on investment.”
Take the Lisbon MBA in Portugal as an example, which is a joint venture between Nova SBE and Católica-Lisbon business schools. The full-time program has tuition fees totaling €33,000 for one year, including time at MIT: Sloan in the USA as well as a summer internship, but of course you’ll need to add rent, course materials and general living expenses to this. According to QS’ TopMBA.com Applicant Survey, the average salary among Western Europeans prior to enrolling on an MBA is €33,450, while according to the school, the average salary for those that complete the full-time Lisbon MBA program stands at €58,600.
This shows a salary increase of €25,150. If you measure this against the cost of attending the program (€33,000 plus expenses), then it’s likely that alumni from the course will have achieved a full return on investment within two years. This is fairly similar for many of the top business schools around the world, but particularly so for those in Western Europe and North America.
Add to this the opportunity of MBA scholarships, or the very real prospect of an annual performance-related bonus, and the prospect of enrolling on an MBA program can be extremely attractive indeed.
QS' report adds that the addition of bonuses in many cases, for those with the MBA degree, is a big attraction of an MBA. “Many MBAs receive a sign-on bonus, to help pay back tuition, as well as a performance related end-of-year bonus.”