The Surprising Resilience Of The MBA
You have to laugh at all those naysayers out there who are so eager to tell you that the MBA is worthless. Over the years, you’ve heard any number of so-called education experts, journalists and entrepreneurs seeking attention write the obituary for the most popular graduate degree in America.
All those wasted words share one thing in common: They are dead wrong.
The MBA degree is as hot as ever. As business schools begin to report on the career outcomes of their latest graduating classes, there is nothing but bullish news. At three months after graduation, 99% of Emory University’s MBA Class of 2021 had received and accepted job offers. Michigan State University’s MBAs did even better, achieving a perfect 100% employment rate — every student in the Class of 2021 at the Broad College of Business secured a job before or upon graduation secured a job before or upon graduation. At Rice University, this year’s graduating MBAs recorded the highest average and median starting salaries in the school’s history: Median salary of $135,000, up $10K from year-earlier levels. What’s more, the school’s international students posted a 100% placement rate three months after graduation. At a time when H1b visas are hard to get, that is an incredible accomplishment.
The demand for MBA talent is also driving up compensation to record levels never before achieved. “Historic” is the word the University of Virginia’s Darden School of Business uses to describe its latest numbers, and that’s true in a few ways. Salary reached new heights for a third consecutive year, and bonuses climbed to a new record. In 2021, a Darden MBA’s average salary grew $4,988 to $144,933, a 3.6% increase. Over the past five years, average base salaries for Darden grads have risen by over $22,000. What’s more, 88% of the class reported an average signing bonus of $35,488 — up more than $2,200, or 6.7%.
Over at the University of Chicago’s Booth School of Business, total median compensation for the MBA Class of 2021 was a hefty $169,800. That is a flat number but only because more MBA students chose to accept jobs in technology which pays less than consulting or finance. Boothies are snapping up those tech jobs in record numbers. Amid a school-record surge in tech jobs overall that saw more than 21% of grads find work in the industry this year, a huge proportion — more than half of that group, amounting to around 13% of the whole class — went to work in e-commerce, up from under 9% in 2020.
Those outgoing stats reflect the outcomes of the latest MBA graduates, but the incoming stats of young professionals who are applying to MBA programs is at record highs at many business schools as well. Despite a recent Wall Street Journal story to the contrary, applications to top MBA programs continue to surge. Applications climbed at 19 of the Top 25 U.S. B-Schools last year.
And that was after massive volume increases in apps in the previous year when the pandemic hit and fears of a recession made more people in their mid-to-late 20s consider a graduate degree. Overall for the 25 leading schools in the U.S., apps grew 3.2% this year — but they’re up 17.6% compared to 2019.
Some of the increases this past year nothing less than eye-popping. No top-25 U.S. school had a better 2020-2021 admissions cycle than Indiana University's Kelley School of Business, which saw a 61% increase in applications. Carnegie Mellon Tepper also had a notable increase from 2019 of more than 50%, while applications to Michigan Ross’ MBA program jumped 55.9% this cycle. Meriting a mention, though it sits just outside the top 25, is Rice University Jones Graduate School of Business, where MBA applications are up 39% from 2019.
It’s not only two-year residential MBA programs that are the beneficiary of a renewed interest in the MBA degree. Online MBA programs, particularly those with disruptive price tags, have experienced exploding demand. At the University of Illinois’ Gies College of Business, student enrollment in its $22,500 iMBA program now totals 4,388, up from an initial cohort of 116 students just six years ago. Demand for Boston University’s new $24,000 online MBA offering is also through the roof. The school expects student enrollment to approach 2,000 by year end for a program that officially launched in September of last year.
MBA critics are always quick to seize on the negative but they often overlook two aspects of MBA programs that make them so appealing and so enduring. In the world of academia, business schools are the most responsive of any university college or department to topical trends and needs. They continue to evolve curriculum so that it is highly relevant to employers, with the addition of courses on data analysis, digitization, artificial intelligence and machine learning. And they have become expert at teaching those soft skills in leadership, collaboration and team building that are so essential to one’s success at work.
No less crucial, business schools are really the only schools in the academy that understand their job isn’t done when a student is handed a diploma. Success cannot be claimed until a graduate is placed in a solid job with a good income. The latest stats show that business school’s are highly successful in placing their MBAs in some of the best jobs available in this economy.
So to all those naysayers out there, I will remind them of one of Mark Twain’s most familiar quotes: “The reports of my death are greatly exaggerated." Let’s paraphrase this one: The reports of the MBA’s decline have been and will continue to be greatly exaggerated.