MBA Careers: TopMBA Mentor

How and why an MBA can improve your career prospects.

The MBA has been gradually gaining recognition as a fundamental hiring qualification across the world over a long time period. It became a keystone of US corporate hiring practices in the 60s and 70s, with most Fortune 500 companies, consulting firms and banks treating it as a primary entry category.

This came later in other regions. London Business School and Manchester Business School entered the market in 1964 – the MBA is now as well entrenched in UK hiring practices as it was in the 60s and 70s in the US.

Other countries in Europe do not yet have this culture. For example, in Germany, the MBA wasn’t recognized until 1989, which means that awareness is still relatively low. While banks, consultancies and other global firms are beginning to adopt it, many engineering firms, for instance, remain unfamiliar with the MBA.

The dynamic is different in Asia. Though it is only in the last decade or so that credible schools have been established, there is a long standing culture of students going to North America or Europe, and returning to occupy senior positions. Thus the qualification has greater maturity. In India, employer demand is such that supply falls well short of demand. The QS Global Employer Survey shows there are now more MBA job opportunities there than in the US.

Why do employers value the MBA?

Employers wouldn’t pay salaries of US$90,000-120,000 – around double what a pre-MBA candidate could expect – unless they felt they were recruiting candidates who could deliver real value straightaway.

What is the value that an MBA engenders? It obviously differs from candidate to candidate. For a small minority, it is outstanding technical expertise. But for most generalists, the most important outcome is the development of leadership, interpersonal and team-playing skills. Without fail, QS employer research shows that, year after year, across all regions and industries, these skills are in the top three demanded by employers of their new MBA hires.

To this we can of course add the general management competencies built by the core modules of most programs, which allow movement from functional to managerial roles. A candidate must know a little about a lot, so they can sit equally comfortably in meetings with finance departments, marketing departments, and logistics departments, and have an understanding of what is being discussed and decided.

But without the softer skills, with which a manager can motivate, inspire and understand a diverse group of people, this knowledge can only take you so far. A weak candidate will not see this, while a strong one will understand and really focus.

MBA employment outcomes for candidates

An MBA does not guarantee a leap up in position. For pre-experience candidates, who will only really be able to gain technical skills, and not be able to appreciate the key deliverables of an MBA, the outcomes will be no different to graduates of master’s programs.

However, for a candidate with experience, it can be transformative. An engineer with a track record of success in a specific function who wants to move into a managerial role, for instance, could find themselves with a post-MBA salary in excess of US$130,000, on the fast track to the boardroom. This is common; around 30% of MBA candidates have an engineering or IT background. In the consulting and banking sectors, it’s not uncommon for MBA leadership programs to offer starting salaries of US$110,000-130,000, rising to US$250,000 within three years.

It is these sorts of roles and salaries for which MBAs aim. Over 30% of respondents to the QS TopMBA.com Applicant Survey want to be CEOs of major corporations (around 25% want to start their own business).

Even in the post-financial crash landscape of the past three or four years, average salaries for MBAs have risen to US$93,000 for graduates of the world’s top 100 business schools; and in excess of US£110,000 for the top 20 – rankings, it seems, are reflected in salaries and, inevitably, in course fees. Employment rates are also consistently high, standing at 80-90% three months after graduation for graduates from top-100 schools.

Graduates of top 200 schools are also enjoying similarly strong outcomes – often opting to accept a lower salary than they could expect in New York or London, but in countries with a lower cost of living. So it can’t be said that one needs to attend a top-10 school for positive career outcomes – this is no longer the case. A good-quality regional school in a country in which a candidate wants to work can serve perfectly well. 

But, outside of these, research is very important. Schools which accept pre-experience candidates, which don’t teach in English (not providing the international exposure on which employers place such a premium), or aren’t selective should raise red flags. Also, make sure placement statistics are available – a prerequisite for any business school featured on TopMBA.com.

Who can benefit from an MBA?

There is a lot of evidence that employers are concerned with the specific content of MBAs. Banks create relationships with faculty who are teaching cutting-edge financial material, and producing graduates equipped with this knowledge. Consulting firms do the same. But it is not just in fields of finance and consultancy in which candidates can benefit. ESSEC offers a specialist luxury brand MBA, Imperial College and Nottingham University’s business schools specialize in healthcare, and Loughborough University in sports management. BEM Management School Bordeaux and MIB both offer MBAs in wine making!

One of the biggest hirers of MBAs by volume is the computer services industry, in which the value proposition has moved to offering consultative services, support, and training. Therefore, technical people who have an understanding of customer service, finance, marketing, business development and consulting are much in demand. In emerging markets, many computer service companies are staffed largely by MBAs – this is fuelling the rise in job opportunities in India, where some firms are hiring over 3,000 MBAs a year.

Many candidates aim to use their MBA to change career – around 45-50% according to QS research. The change can take three forms: function, industry or location. The qualification can certainly be a springboard to do this, but let’s finish with a bit of established wisdom. An MBA will definitely let you change one, could probably help you change two, but it is very difficult to change all three.