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2.2 SALARY EQUALISATION

The reputation of elite schools stands them in good stead around the world. The research confirms that there are 15-20 schools in both, North America and Europe, of which almost all international recruiters are aware and would favour for MBA hiring.
These schools feature on the priority lists of a high proportion of respondents. However, in negotiation, the high salaries demanded by graduates of these schools deter many smaller firms. There is a differential in salary levels between elite schools and strong local schools and this is helping to sustain demand for graduates from a wide number of institutions. As a consequence of high salary demands from the MBAs at top schools, recruiters may turn to strong local schools. Regional and local North American recruiters reported an average starting salary of US $ 89,700; Western European recruiters reported an average of US $ 97,400 (outstripping North America for the first time); Eastern European recruiters reported an average of US $ 63,200; Asia Pacific recruiters reported an average of US $ 71,400 and Latin American recruiters reported an average of US $ 69,800. It is also true that the elite schools have limited numbers of places and, therefore, competition for entry is tough. Many good candidates, therefore, decide to study at less well-known schools and to undertake a pro-active job search. Recruiters may visit schools selectively, but they will review CVs of candidates from almost any school. Strong candidates at smaller schools are helping to build the reputations of these schools as evidenced by the new schools appearing in the recruiter preference tables across the world. There are strong local business schools emerging in Canada, Germany, Russia, Australia, China, Japan and several other countries that may soon start to challenge the existing incumbents. The reputation of elite schools stands them in good stead around the world.

2.3 THE UPSWING OF THE BUSINESS CYCLE SHOULD HAVE SEVERAL YEARS TO RUN

The TopMBA.com Salary and Recruitment Trends Report 2007, provides extensive details on the renewed boom in MBA hiring. The MBA market has shown itself to be cyclical. Recruiter demand for Full-Time MBA hires fell back each year from 2001 to 2003, as telecoms, media, consulting and banking sectors shrank their employment numbers and cut back on new hiring. A strong recovery commenced in 2004 and by 2006, we see MBA demand exceeding the levels of 2000, and recruiters are predicting two more years of increase in hiring. By 2007, MBA demand is approximately 10% above the levels of 2000. This growth reflects the return to aggressive hiring by consultancies and banks, and also the increasing geographic spread of MBA employers in all sectors. We have seen a 22% increase in demand, a 4% increase in average MBA compensation in 2007.

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Source: -
QS World MBA Tour - QS TopMBA.com International Recruiter Survey 2007
© QS Quacquarelli Symonds Ltd. 2007
Website: www.topmba.com