MIT Sloan: Class of 2015 Employment Report

Source: MIT Sloan

There’s only room for one financial services firm on 2015’s list of employers and indeed, the number of MIT MBA graduates heading into the industry as a whole is down from 14 to 13% among the class of 2015 (if we group together the four finance fields reported on separately by the school). This fall is a more moderate continuation of what is a long-term trend at MIT Sloan, where 20% of MBAs took MBA jobs in finance in 2010 and as many as 31% in 2006. This year’s drop can be attributed to the declining numbers moving into investment banking (down from 7 to 6%) and into diversified financial services (down from 3 to 2%). However, the percentage of those taking MBA jobs in venture capital and private equity, or with hedge funds, is up slightly from 2 to 3% among last year’s cohort, although this remains a long way off the bumper year reported in 2013, when 6% took MBA jobs in this area of finance. Even so, there have been financial rewards for those taking investment banking opportunities. The sector’s median salary has risen from US$100,000 to US$125,000 among the class of 2015, matching the trend seen at other top US schools.

Finance’s diminishing influence at MIT Sloan finds no parallel in that other traditional provider of MBA jobs, consulting. The number of students joining consultancy firms from the class of 2015 may be down a touch, from 34% in 2014 to 32%, but the industry hasn’t deviated too far from 30% in any of the past 10 years and McKinsey continues to be the school’s number one recruiter by volume of new hires. However, consulting’s position as the school’s number one industry destination may be under threat if software and internet services firms can continue to lure increasing numbers of new graduates. Consulting salaries, for their part, might be harder to match – the industry’s median figure is up from US$135,000 to US$140,000.

Elsewhere, the number of MIT MBA graduates joining the retail industry has, like prices in the January sales, been slashed in half, from 8 to 4%. The industry was the destination of choice for 10% of those leaving the school in 2012 and 2013, but has now returned to levels last seen in 2010 and 2011. The median salary in retail is also down, from US$115,000 to US$110,000.

Fewer MIT MBAs have also chosen to work in the pharmaceutical/healthcare/biotech and computers/electronics industries as compared to last year’s cohort, but has been an increase in the number heading into the automotive/aerospace sector.

Although the fires of entrepreneurial ambition burn bright in the eyes of many of today’s business school hopefuls, the proportion of MBAs leaving MIT Sloan to start a new enterprise directly after graduation has fallen for the second year running. 9.5% of the class of 2013 reported starting their own business, yet this number dropped to 7.4% in 2014 and stands at 6% among last year’s graduates. However, these numbers still stand comfortably above the North American average, as detailed in a recent QS report on MBA ROI.      

As we have seen elsewhere among US business schools’ latest employment reports, the number of MIT MBA graduates accepting MBA jobs based outside of the US is creeping downwards. In 2011, roughly one in five (19%) took their qualification overseas. However, that number fell to 14% in 2014 and is little more than one in 10 (11%) among the class of 2015, in spite of the fact that 45% of the cohort held non-US citizenship.

Is this down to the increasing appeal and availability of suitable positions in the US, or to a declining appeal of those available outside its borders? This isn’t an easy question to answer as much will be determined by the regions from which students with non-US citizenship hail in any given year. However, it is interesting to note that while 4% of MIT graduates took positions in Europe in 2011 and 2013, that figure has fallen to around 2% among last year’s cohort. Those taking MBA jobs in Asia, meanwhile, represented 10% of the class of 2011 yet only 4% of MIT Sloan’s latest class. And, the class proportion heading to Latin America (including Mexico and the Caribbean) is down to a little over 3%, from 5% in 2014. Perhaps, then, this could be construed as a consequence of the current health of the market for MBA jobs in the US.

More than half of MIT Sloan’s latest MBA class will be working in one of three US cities; Boston, San Francisco and New York. The 23% accepting offers in Boston is the highest proportion seen since 2011. The number working in the San Francisco Bay Area is now one in five, up from 17% two years ago, tarrying with the increasing class proportion taking jobs in technology. The number of those taking MBA jobs in New York has fallen for the third year in a row, to 11%; tarrying with the decreasing proportion taking jobs in finance.

As much as the destinations taken up by MBAs make for interesting reading, when MIT MBA graduates are asked why they accepted a position, location is not often the primary reason given. Just 6% cite this as their primary motivation this year – a figure broadly in line with reports over the past five years. Instead, it is growth potential (31%) and job function (25%) that figures most highly in the latest cohort’s minds.

As we have seen elsewhere - at Duke Fuqua for instance - the MBA summer internship is a leading source of the post-MBA jobs accepted by graduates of MIT. Almost a third (30%) found their opportunities this way, although this is down six percentage points on 2014’s reported figure. On-campus recruiting makes up for this loss, however. In another sign of employers’ faith in the US’s economic recovery, 35% of graduates found their post-MBA jobs through on-campus interviews, after the equivalent figure fell to 26% in 2014.

The new MIT Sloan report relates to the 406 students in its MBA class of 2015 of which 79% were seeking new employment after their degree. Of this number, 96% received a full-time job offer within the customary three months period following graduation, with 92% accepting an offer within this timeframe. The overall median salary for the class is US$125,000, a fraction higher than 2014’s figure of US$124,400 but one that means the average has risen by no more than US$6,000 since MBA graduates recorded a figure of US$119,000 back in 2011.