Rate of Employment Growth for MBA Alumni

TopMBA.com looks at how the rate of employment for MBA alumni is increasing and the reasons for this upward trend.

A survey of MBA and other graduate management alumni conducted in September has found that 88% of the class of 2010 were in employment at the time of their graduation, compared to 84% of the 2009 class.

According to the Graduate Management Admission Council’s (GMAC) Alumni Perspectives Survey, over the same time period the average salary of graduate management alumni has risen by almost US$4,000 to US$78,819.

However, while a recent Bloomberg BusinessWeek report concurs that recent MBA graduate hiring rates are up compared to last year, it also found that MBA salaries “are flat or down at 23 of the 30 [top business schools according to BusinessWeek], with starting pay averaging $97,049, inching up only $549 from 2009.

MBA salaries

Michelle Sparkman-Renz, director of research and communications at GMAC puts the different findings down to BusinessWeek’s sample being more US-focussed.

“[BusinessWeek’s] ‘flat’ or down trend versus the GMAC 2010 Alumni Perspective Survey’s US$4,000 salary upswing is an undersized range when you think about how different the survey samples are,” Sparkman-Renz says. “The BusinessWeek study involved about 30 schools, mostly US and a handful of other countries,” she continues, before pointing out that GMAC’s sample represented 126 business schools from around the world.

Returning to pre-recessionary years

In the GMAC survey, both the rate of employment and the rise in the median starting salary offered to MBA and other graduate management alumni marks a return towards the levels of pre-recessionary years.

During the three year period of 2006-08, GMAC’s survey reports that those graduating with jobs remained steady at 88-89%. Meanwhile, the median starting salary levels remained constant at around US$80,000.

However, when compared to the end of the last economic downturn, the outlook for current MBAs has drastically improved from the 72% employed at graduation in 2003.

“In terms of trends, I would not expect to see the same salary levels in 2010 as were seen in 2007,” Sparkman-Renz explains. “The current post-recession climb compares to what was observed in escaping the last recession in 2002-03. Compared to that period, I think salaries and the employment for business grads are holding up for the Class of 2010.”

Business degree satisfaction

For those considering applying for an MBA program, a telling result of the satisfaction of business school graduates is that 76% of responders believed that they could not have obtained their current job without their business degree. Further, 96% of the alumni surveyed rated the value of their degree as outstanding, excellent, or good.

This is also true of the graduate’s job satisfaction levels too, explains Sparkman-Renz. “For the class of 2010, more than half (59%) of alumni acquired the type of job they desired, this was slightly less than the 65% of class of 2007 alumni, who were most positive about their choice of jobs.”

The Alumni Perspectives Survey, conducted by GMAC which administers the GMAT entrance exam for MBA programs, surveyed 824 alumni from 126 of the top business schools around the world.

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