Why STEM Designations Will Save International Enrollment at Business Schools

The Simon School of Business at the University of Rochester in New York State last month became the first top US business school to receive the STEM designation for its full-time MBA course.

There's a huge advantage to the STEM designation as it enables international graduates to remain in the US and work for an extra 24 months after graduation, whereas currently, they’re permitted to stay for only 12 months of optional practical training, or OPT. 

US companies are crying out for more technology talent; many cite the difficulty of securing visas to hire foreigners as a reason for the skills shortage. Fewer than half of US employers plan to hire international business school graduates this year, down from 55 percent in 2017, GMAC says.

“The US Department of Labor is forecasting almost 200,000 job openings in STEM management roles by 2024,” says Rebekah Lewin, assistant dean of admissions at the Simon school. “A STEM MBA option aligns with what companies are seeking in top MBA talent: skilled managers who also have expertise in using data to drive decision making.

“We believe the opportunity for a competitive edge in the job market will encourage interest from international candidates who might otherwise be hesitant to pursue an MBA in the US.”

There’s some evidence that the STEM designation is addressing the decline in applications to US business schools from internationals. MIT Sloan School of Management in Massachusetts received a STEM designation for its master’s in finance course in 2016.

“With the announcement of the STEM classification, we saw a 23 percent increase in applications,” says Heidi Pickett, assistant dean at Sloan. “Historically we had seen increases, but not to that extent and believe the STEM classification played a large role.

“Our applications have since levelled off and slightly decreased due to various factors including a strong employment market, but our quality of applicants remains strong and we attribute that in part to the STEM classification.”

The 24-month visa extension is attractive, as is the confidence the curriculum provides candidates with the rigor and technical training that leads to desired careers, Pickett says.

She says the financial services sector is in need of strong technical and analytical skills to deal with the rise of big data and the quantitative nature of the work. These skills tend to come out of STEM curriculums.

Some 93 percent of Sloan’s latest class accepted job offers within six months of graduation, and 100 percent received internship offers. The majority of graduates were international and the majority of offers were from US firms.

Pickett says, “It’s our understanding that employers are more willing to hire graduates from STEM classified programs due to the additional 24 months of optional practical training.”

Opting for the STEM designation makes sense for business schools, whose students have increasingly warmed to careers at technology companies, but have faced criticism from some corners of Silicon Valley. Venture capitalist Marc Andreessen famously suggested MBAs are contrarian indicators: “If they want to go into tech, that means a bubble is forming,” he said.

Still, technology has overtaken consulting as the top career choice of business schoolers, with 60 percent of candidates saying tech is their desired career path post-MBA, according to data from RelishCareers, the jobs website. At the University of Washington’s Foster School of Business, 58 percent of its MBAs were hired by tech firms last year.

But it’s a significant effort to secure a STEM designation, says Lewin at the Simon school. “Securing the STEM option for our MBA program was a multi-year process that involved conversations with students, alumni, faculty and senior leadership to understand what would — and wouldn’t — be valuable.” The school has also pursued STEM designation for each of its specialized master’s programs.

Yet if a designation can increase applications and ease the skills crunch, it’s surely an investment worth making. Expect more US business schools to follow suite.