From GMAC, A Note Of Caution On MBA Job Market - Poets&Quants

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The job market for MBAs continues to be strong — but there are few signs that it may be weakening. The Graduate Management Admission Council’s 2018 Corporate Recruiters Survey, released today (June 22), shows that jobs are there for the earning, with 81% of more than 1,000 responding companies saying they plan to hire MBA graduates in 2018 and more than half — 52% — saying they plan to increase MBA starting base salaries this year. But those numbers are down slightly from the high-water mark of last year.

The data reflect a slight decline in projected hiring among U.S. and European employers compared to 2017’s hiring plans: 85% of responding U.S. companies and 81% of companies overall plan to hire recent MBA graduates in 2018; last year, 90% of both U.S. and Asia-Pacific companies and 86% of companies globally planned to hire MBAs. This year demand for MBA talent is strongest in Asia-Pacific, where, once again, 90% of responding employers plan to make MBA hires.

Relevant to the general decline, a key area that has seen softening is U.S. and others’ employers’ intent to hire international business school graduates. Forty-seven percent of U.S. companies said this year they plan to, or are willing to, hire international talent in 2018, down from 55% in 2017. In comparison, about the same percentage of European employers plan to or are willing to hire international talent in 2018 (65%) as 2017 (64%) — however, Asia-Pacific employers are pulling back (58% from 67%), as are Latin-American employers (68% from 72%).

“Over the past several years we have tracked positive trends in hiring of MBA and business master’s graduates,” Sangeet Chowfla, GMAC president and CEO, says in an announcement of the findings. “Graduates are commanding compensation premiums and companies are increasing starting salaries. The softening in the intent-to-hire numbers for the U.S. and Europe reflects the global economic growth numbers we are seeing, and the prevailing political and student mobility issues. In the Asia-Pacific region, hiring projections have remained strong. From the overall analysis, we see that MBA hiring overall is strong, but we are seeing the mix shift geographically.”

A SLIGHT DOWNTURN IN INTENT-TO-HIRE — BUT WHY?

GMAC CEO Sangeet Chowfla

Why the (slight) downturn? “This dip in stated intent by U.S. employers to hire international graduates is potentially a response to the changes — or potential changes — to visa and immigration regulations,” Chowfla says. “Even though H1-B visa rules haven’t yet changed, there is a perception that they might change in the near future, and some employers may be waiting to see what will happen.

“The jobs market in the U.S. right now is robust, and companies are constantly having to evaluate their prospects and how best to fill their available roles with strong talent.”

Adds Jamie Belinne, assistant dean at Bauer College of Business at the University of Houston and president of the board of directors of the MBA Career Services and Employer Alliance (MBA CSEA), which partners with GMAC on the Corporate Recruiters Survey: “The GMAC survey reflects MBA CSEA’s recent Recruiting Trends Survey, where 68% of schools indicated a decline in hiring for international full-time MBA students compared to the same time last year. As a result, many schools are more actively promoting a global job search as well as creating connections with employers in students’ home countries.”

International students themselves are paying attention. GMAC’s own data from last year suggest they themselves may be looking away from the U.S. amid escalating anti-immigration rhetoric.

U.S. IS WHERE THE BEST MBA MONEY IS

GMAC has compiled its annual report since 2011. It offers an overview of current employer hiring demand for MBA and business master’s graduates and breaks down hiring practices and trends by industry and world region. This year’s survey was conducted in February and March 2018 in association with career services offices at 96 graduate B-schools worldwide. The survey responses were received from 1,066 employers in 42 countries worldwide who work directly with participating business schools. In July, GMAC will publish a companion report regarding skills sought by employers.

Among the key findings of the just-released report: MBA money, as Chowfla alludes to, continues to be good. Grads around the world are commanding a salary premium compared to their direct-from-industry and bachelor’s degree counterparts, but the difference is most pronounced in the U.S., where recent MBA grads earn a projected median base starting salary $105,000 in 2018, compared with $85,000 for direct-from-industry new hires and $65,000 for bachelor’s degree new hires. However, the difference between starting pay across regions can be dramatic: European companies will offer a median starting base salary of US$65,000 to MBA hires and US$25,000 to Master in Management hires, while Asia-Pacific companies will offer a median starting base salary of US$35,000 to MBA hires and US$35,000 to MiM hires.

In signing bonuses, too, the U.S. is the place to be. Most U.S. companies (56%) will offer signing bonuses to new business school hires in 2018 (median $10,500), while signing bonuses are less common among non-U.S. employers: Thirty-six percent of Asia-Pacific companies, 30% of Latin American companies, and 20% of European companies will offer signing bonuses. The median bonuses will be US$3,500, US$3,000, and US$9,500, respectively.

Source: GMAC

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MORE FINDINGS: ANALYTICS GRADS IN HIGH DEMAND

It may not be news, exactly, but GMAC’s 2018 recruiter survey shows that data analytics degree holders are, in fact, highly sought after. Overall, 71% of responding employers say they plan to place recent B-school graduates into data analytics roles in 2018, which puts data analytics among the top job functions employers will place new grads into this year, alongside business development (74%), marketing (70%), and finance (69%).

For the first time this year, GMAC’s survey collected trending data for Master of Data Analytics hiring and found that about half of responding companies (52%) plan to hire Master of Data Analytics grads in 2018, compared with 35% that hired them in 2017. The survey found that hiring demand for data analytics grads is strongest among Asia-Pacific employers, among whom 62% plan to hire in 2018. About half of employers in Europe (50%) and Latin America (47%) plan to make similar hires.

“As is the case with other program types, larger companies are more likely than smaller companies to have plans to hire Master of Data Analytics talent in 2018,” reads the GMAC report, written by Gregg Schoenfeld, senior director of research. “A majority of Fortune Global 100, 500, and publicly traded companies have 2018 Master of Data Analytics hiring plans. Hiring demand for recent Master of Data Analytics graduates is strongest among employers in the technology (70%), health care (61%), manufacturing (55%), and consulting (54%) industries.”

EMPLOYER EDUCATION ASSISTANCE ON THE RISE

Source: GMAC

In other survey findings, most U.S. companies (61%) offer financial assistance for employee education and talent development. Among those companies, 2 in 3 (66%) have increased their budgets for employee education and talent development compared with five years ago. 

A new benefit asked about in this year’s survey is student loan repayment assistance — deemed the “hottest employee benefit of 2017” by Forbes. Repayment assistance is seen by employers as an effective way to attract and retain top millennial talent. The survey found that 9% of U.S. companies currently offer it as a part of their overall benefits package. 

Internships meanwhile, are increasingly seen as paths to jobs: GMAC’s survey finds that most employers plan to bring on MBA interns in 2018. MBA internships are most prevalent in Asia-Pacific and the U.S., where 65% and 62% of employers plan to offer them, respectively. “Internships continue to be an avenue to jobs for many business school graduates,” Schoenfeld writes. “Internships provide a way to understand a company, the culture and expectations and remain a good opportunity to obtain permanent positions.”

OUTLOOK MIXED FOR MIMs, MACCs & MFINs

Some key findings pertaining to non-MBA graduate business degrees:

• The majority of companies outside the U.S. plan to hire Master in Management (MiM) talent in 2018, including around 7 in 10 companies in Asia-Pacific (73%), Europe (72%), and Latin America (69%). Among U.S. companies, 39% plan to hire MiM graduates.

• Hiring projections for Master of Accounting have held steady among European employers, but projections among Asia-Pacific employers are notably down elsewhere in 2018: 44% of European companies, 43% of U.S. companies, 40% of Latin-American companies, and 37% of Asia-Pacific companies plan to hire recent Master of Accounting graduates in 2018. By world region, Latin-American companies have the largest increase between their 2017 actual hiring rate (25%) and 2018 projected hiring rate (40%).

• The hiring outlook for Master of Finance talent is “flat” among European employers compared with last year, and down slightly among Asia-Pacific and U.S. employers. “Two-thirds of Latin-American companies (67%) plan to hire Master of Finance talent — the greatest share of any world region,” Schoenfeld writes. “Most European companies also plan to hire Master of Finance graduates this year (57%).”

Source: GMAC

DON’T MISS MBA JOB OUTLOOK BETTER THAN EVER IN 2017 and GMAC SAYS TRUMP EFFECT IS REAL — AND GROWING 

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