MBA Graduates Less Likely to Switch to the Finance Industry

At the start of the academic year, TopMBA’s annual applicant survey showed that a vast majority of prospective MBA students were open to changing their industry of employment.

The least inclined to move were found to be applicants who were currently working in the finance industry, yet even here, 82% expressed an interest in exploring opportunities elsewhere.

Taking an MBA to advance an existing career in finance, then, is no longer a clear-cut motivation for many applicants. But what of the industry’s ability to attract new career-changing recruits and to fulfill the long-term career aspirations of MBA graduates? This is a subject that has been a matter of much debate since the Great Recession set in.

Many, including those of us at TopMBA, scoured MBA employment reports for evidence that graduates of elite US schools were increasingly keen to join technology companies over the finance industry. Now, a new survey of MBA graduates conducted by the Financial Times adds weight to the idea that finance no longer exerts quite the same hold over today’s emerging business leaders.

MBA graduates just as likely to leave finance as to enter it?

In looking at two classes of MBA graduates (from 2006 and 2011) three years on from their time at business school, the FT analysis found that, in 2014, far fewer graduates had used the qualification to join the finance industry than five years prior.

Indeed, just as many MBAs had left finance behind – 2014’s ratio between those joining and leaving the industry since respondents’ pre-MBA careers was 1:1, down from more than 2:1 back in 2009.

The FT’s analysis posits a suggestion that salary may have something to do with this. Three years after graduating, it found that career switchers to finance had seen an average rise in salary of 170% on their pre-MBA earnings. Respondents in 2014, meanwhile, have signaled an average rise that is closer to 100%.  

However, rising interest in pursuing careers in the technology industry is also cited as a contributing factor and certainly, the industry now seems well-established as a third major sector of MBA hiring (along with finance and consulting), with the biggest tech employers now a firm fixture in the top-recruiter lists at elite business schools in both the US and Europe.  

The past year has seen some solid growth to the finance industry in some parts of the world, not least in the US, where the number of MBA job opportunities reported by employers in the financial services grew by 17% (as per the new QS TopMBA.com Jobs & Salary Trends Report). However, the global picture has not been so expansive, especially in light of continuing problems across economies in Europe. Finance’s growth in jobs since 2014, therefore, has often been bested by those of technology. It should now be interesting to see the career decisions being made by this year’s fresh crop of MBA graduates, with class of 2015 employment reports due for release at some of the top US business schools over the next month or so.