Where in the World is Demand & Salaries for MBA Graduates Growing?
| August 19,2010 04:57 pm IST
In recent years, several MBA commentators believed that MBA education would never return to the glory years of the late 20th Century. Yet in 2007, MBA recruiter demand exceeds the level at the height of the dotcom boom and looks likely to continue its upward march.
Paul Danos, Dean of Tuck observes, "Today... applications are up for over 2/3 of all business schools and the demand for graduating MBAs is through the roof." Demand and salaries are increasing in almost every market in the world.
Hiring predictions from MBA recruiters suggest that MBA demand worldwide will set a new record in 2007. The TopMBA.com Index of MBA Recruiting shows for the second year in succession an overall 24% (24% in 2006) increase in demand for MBAs in 2007, with the technology sector reporting a massive 29% (20% in 2006) increase, financial services 23% (24% in 2006), general industry 24% (18% in 2006), and consulting 22% (39% in 2006).
MBA recruiters around the world are in the midst of a battle for talent. As world growth continues, demand for MBAs is spiralling, particularly in the service sectors of consulting and banking. The TopMBA.com International MBA Recruitment and Salary Report 2007 reports on the trends in recruitment and salaries earned in the primary international markets today. Responses were received from 489 companies across the globe. 44% (38% in 2006) of respondents were based in North America, 27% (28% in 2006) in Western Europe, 16% (11% in 2006) in Asia-Pacific, 5% (13% in 2006) in Latin America, 7% in Eastern Europe (6% in 2006) and less than 1% (4% in 2006) in the Middle East & Africa.This provides detailed insight across regions.
In 2007, average MBA salaries in Western Europe have increased by 6.5% (a full 4% ahead of the average European inflation rate), compared to a worldwide increase in MBA salaries of 3.5%. MBA salaries are now well in excess of the pre-downturn levels of 2001 with a North American / European average of US $93,400 (US $90,500). This increase reflects a high level of optimism amongst MBA recruiters and increased competition for the top talent. The average reported bonus is a sizeable US $24,100, with banks / financial services companies leading the bonus field, with an average bonus of US $46,400.
More and more companies are global in their operations without ties to any one region according to the 2007 Survey. In total, 58 of the 489 recruiters responding to our survey had global responsibility for MBA hiring. These global recruiters include strategy consulting firms, investment banks and pharmaceuticals, supplemented by a small number of companies in most other sectors. These global recruiters are creating a regional catch up in terms of demand for and salaries received by MBAs in emerging markets, compared to North America and Western Europe.
Europe, Middle East & Africa
MBA recruitment is very much on the agenda of European-based companies seeking to be internationally competitive. Lucy Tarrant of Barclays Bank explains that, "To become a truly global bank, we need internationally minded future leaders," and so Barclays is increasing their MBA recruitment in 2007.
Usha Kakaria-Cayaux of Nike Netherlands says, "We look for MBAs for their learning agility, international experience, conscious decision to evolve, interest in continual learning and broad management exposure (although sometimes somewhat surface level)."
Graham Hastie of London Business School observes, "The MBA job market in Europe is at record levels and I can't see any clouds on the horizon. We expect most students to have several offers at graduation." At the current /US dollar exchange rate, the UK is now paying the highest salaries for MBAs worldwide. Dominique D'Arcy of Manchester Business School says, "The I-banks and strategy consultants are recruiting actively, but they have been joined by commercial banks and the professional service companies like KPMG, E&Y and Deloitte, all of whom are targeting MBA recruiting this year. And many industrial companies have been enticed into the MBA market in the last three years, and they have enlarged the total pool of MBA employers compared to the pre-dotcom era. We are also seeing renewed activity amongst technology and telecoms companies."