The MBA degree is retaining its value for changing careers or turbo-charging long-term advancement prospects, notwithstanding the recent hiring hiccup and continued uncertainty over job prospects for the class of 2010.
Officials at a number of institutions report demand for summer associates is strong, in marked contrast to this time a year ago. "We're seeing more companies, more (interview) schedules, more offers," says Randy Allen, associate dean of the Johnson School, Cornell University's graduate business school.
Permanent job offers for this year's MBA class show signs of picking up too. Salaries, however, look to slip, according to Sharon Oster, dean of the Yale School of Management and a professor there.
Long-Term Value of the Degree
But starting salaries for new MBA holders might not be a useful gauge, no matter how much the media spotlight that particular measure. "The real question is, what does the arc of your career look like? What are you going to be able to do differently" after obtaining an MBA, says John Elliott, dean of the Zicklin School of Business at Baruch College. The majority of MBA students, he notes, aren't doing the program to make a linear jump along the same career path they were already on.
More important, the long-term advantages the degree can bring - a broad and deep education on management issues, and lasting friendships that can propel one's career path - are resilient to the vagaries of the business cycle. Oster refers to "option value," meaning a better chance of transferring to another field if need be.
Other MBA Program Trends
- The proportion of Executive MBA program participants whose tuition is paid for by employers continues to shrink. As a result, schools are giving EMBA participants access to career services that at one time were restricted to full-time students.
- Applications are "way up," Oster says, as the recession has reduced the perceived opportunity cost of leaving the work force to attend school.
- MBA students' average age and years of business experience prior to business school are declining. Whereas a decade ago new entrants were expected to have roughly four years' experience, today it's closer to two years.
- In emerging economies, both demand and salaries for MBA holders is on the rise.
- Both students and alumni are demanding more career services, and institutions have stepped up career services to alumni, according to Allen.
- That's helping career services avoid the brunt of university-wide budget cuts due to endowment losses and shrinking state and local resources. Yale's Oster says she's cutting back IT and marketing staff, but not career services.