Ukrainian MBAs have high, even unrealistic salary expectations, according to a new report. To meet those expectations they are going to have to go overseas, says Ross Geraghty, editor of the TopMBA Career Guide and www.topmba.com.
In this time of financial uncertainty, with the credit crunch making itself felt in the finance houses of the US and Western Europe, it is encouraging that there are parts of the world remaining buoyant. In some countries, according to the most comprehensive survey of the world’s MBA candidates, the QS TopMBA.com Applicant Survey, MBA candidates are looking forward to improving their careers and salaries without trepidation.
In the case of Ukraine, this has translated itself into an extreme, with regard to salary expectations, as the survey shows that candidates from that country have the second highest ‘salary uplift’ expectations in the world (behind India). This means that although Ukrainians responding to the survey had an average salary of less than US$20,000, the 7th lowest of the 33 countries participating in the QS survey, their salary expectations averaged at a colossal US$90-95,000, the 13th highest. This suggests one of three things: Ukrainian MBA candidates are unbelievably confident – perhaps deluded - that the Ukraine economy will skyrocket in the time they are attending business school; that it is in fact possible for them to achieve a more than 400% pay increase by taking an MBA; or, Ukrainians are largely considering living and working in countries with far higher average salaries than their own country can provide.
Of course an MBA is a sure way of increasing a graduate’s salary; as a rule of thumb, estimate an average 20% increase in salary a year after graduation. Figures from QS, the world’s leading career and education experts, also show that MBAs in consulting, for example, will earn 35% more than someone with four years experience in the same industry. However most MBAs are, sensibly, looking at the bigger picture and not just their bank balances when considering business school. The survey says that improving career prospects, learning new skills, building professional networks and enabling a career change are more important to them than straight salary uplift and it is sound advice for MBA candidates to think this way.
But why do Ukrainian MBA candidates think that business school is going to more than quadruple their salaries? For one, it does seem that many of them are considering living and working in the country where they study, hence earning the salaries available in those countries. The top six nations people from the Ukraine prefer to study in are:
USA 79%
UK 77%
Canada 36%
Germany 33%
Switzerland 26%
France 26%
In selecting a country for study, Ukrainians said that international recognition of qualifications, cultural interest and lifestyle and improving language skills are the top three priorities, hence the US, UK and Australia featuring so high. However the fact is that those countries are all in the world’s top ten nations in terms of current salaries, a fact that cannot be escaped when considering a place to live and study.
The table itself isn’t evidence that Ukrainians studying abroad are going to stay abroad (38% admitted that they would like to work in the host country after graduating). However we also know that a significant proportion of those studying overseas will attempt to remain overseas for at least one or two years after graduating from business school, even those who had not necessarily intended to do so when they started the course. This is in part to absorb the culture and the language of the host country, to gain greater experience of an industry, perhaps before bringing those honed skills home to the home country, and – here’s the clincher - to increase the graduate’s salary. After all, an MBA is an expensive undertaking and the return on investment and payback period for a Ukrainian living and working in New York will usually be greater than if they returned to Kiev immediately after their course ends.
Financing an MBA course is another area where Ukrainian statistics are interesting. Only 1.6% of Ukrainians believe that they will receive company sponsorship to do an MBA - the European average is 4% and in Greece almost 7% of MBA candidates believe their companies will help them out with financing their course. As company sponsorships are usually tied in with a contractual obligation of up to three years (although, in fact, EU legislation caps this at three months) this would also suggest that Ukrainians are not getting company sponsorship and so are not tied to their companies; hence they are looking overseas for work.
To finance an MBA by oneself is a heavy burden and scholarships are readily available for most MBA courses. Despite this, millions of dollars of scholarships are unclaimed every year. However Ukrainian students, perhaps following on from the recent and high-profile success of compatriot Konstantin Magalestkyi, seem more than aware of scholarship opportunities. No fewer than 53% of Ukrainians, the 13th highest internationally, believe that scholarships are a viable way of funding their MBA programs. The European average is 40%.
Konstantin attends the Chicago Graduate School of Business, one of the world’s top MBA courses, and was the recipient of a $40,000 scholarship to do so, a fact that made his business dreams possible. He believes that MBAs are valuable in Ukraine but that the business community hasn’t yet taken them to heart, and supports the suggestion that Ukrainians are looking overseas for salary and experience: “The awareness of the value of an MBA is rather low among the business community in Ukraine,” he says. “There is not enough understanding of the kind of education and experience top MBA programs give to their graduates. But from the other side, demand for MBA graduates is much higher than the supply in Ukraine. I wanted to study overseas because I wanted to get a brand new experience from studying and living in a foreign country in a very diversified student community. That’s one of the biggest challenges that I can face in my life and I am eager to take it.”
Many Ukrainians are thinking of living and working overseas for some time after graduating. Whether or not their salaries increases by 400%, well that remains to be seen.