GMAC pronounce higher employment of MBA graduates in Post-Pandemic era

COVID-19 pandemic has led to grave employment concerns, making it politically and economically very difficult for nations and individuals alike to survive. But, a recently released survey report by GMAC reveals that graduates from business schools have a great future with regards to hiring as employers project the hiring levels to return to pre-pandemic levels this year. Now that's long-awaited good news for B-schoolers!

The survey suggests that investment in an MBA goes a long way in achieving career goals and that such a credential does pay off well. Companies believe in paying the B-school graduate $3 million more in their whole lifetime than to someone who only has an undergraduate degree to his/her name.

Projection of High Recruitment

The Graduate Management Admission Council (GMAC), in its annual Corporate Recruiters Survey of 2021, states that corporate recruiters estimate great demand for business school graduates. The demand for business school graduates, domestic as well as international students, is set to increase in 2021 compared to the previous year.

What is an MBA salary?

The survey also pointed out that MBA salaries are also estimated to return to pre-pandemic levels. In 2020, the projected median salary, which reached an all-time high of $1,15,000, dropped down to $1,05,000 within just 3 months of the pandemic hitting the world and gravely hampering the global economy. However, the median salary for 2021 is estimated to recover to its pre-pandemic level of $115,000. At the given rate, the median salary of MBA graduates is 77% more than those with only an undergraduate degree ($65,000) and 53% higher than those compared to those directly hired from industry ($75,000). This premium in MBA salary shows that investing in an MBA credential will pay off, if not now, over time.

MBA Recruiter Statistics

9 in 10 recruiters expect an increase in salary or to remain stable in the upcoming 5 years. While only 30% of recruiters expected this rise in 2020, the following table gives the region-wise percentage of recruiters who predict this increase.

Region	Percentage (%)
Asian	32
United States	54
European	34
OVERALL	37

Before the pandemic hit, 92% recruiters had indicated that they would be hiring MBA graduates in 2020. But the disruptions caused by the pandemic poorly affected those plans, and thus the actual hiring of MBA graduates (80%) was lower than that projected.
Further, 91% of the recruiters plan to hire MBAs in 2021 as well which is the same as that before the pandemic (92%).
These hiring projections display great strength across key regions and industries such as in the Consulting sector, an industry in great demand by MBAs, where 95% recruiters in that industry are expected to continue with their hiring spree at same rates as pre-pandemic. This will be an overturn from the 2020 actual hiring rate of 76%.

Technology Industry Tops the Charts

For 2021, the respondents anticipate an increase of 10 percentage points in demand for MBA graduates in the technology industry, as against pre-pandemic 2020. In fact, when 96% of tech recruiters plan to hire MBAs this year, the call for MBA talents is the highest in the last 3 years. Peter Johnson, Assistant Dean of UC Berkeley's Haas School of Business said that tech companies place a high value on not only those who are technically skilled, but also have strong leadership qualities like strategic, communication, interpersonal, and so on. Professional experience of candidates may also attribute something to this hiring.

MBA Online Programs

Online programmes have started to become popular in recent years. According to GMAC, 50 more online MBA programmes accepted GMAT scores in 2020 as compared to in 2016. Additionally, 84% of online MBA programmes had reported an increase in the number of applications in GMAC Application Trends Survey 2020. However, when the corporate recruiters in the survey were asked if they agreed with the statement “My organisation values graduates of online and in-person programmes equally”, only one-third of them agreed to it.

Categorising on the basis of industries, recruiters from finance and accounting industry (41%) are more likely to view their online MBA graduates equal to their on-campus hires (Full time MBA program), as compared to in technology (28%) or consulting (25%).

Online MBA programmes are clearly a rapidly growing area of graduate management education. The major advantage being remote learning; so a student can improve his/her credentials as an international student as well or by having a professional experience, helping him/her in reaching his/her career goal. The survey said that sustainability of demand will require a higher level of acceptance from the side of employers. This can be supported by latest candidate research done by GMAC which points towards a similar disparity in terms of perception of online and offline MBA programmes.

What does the GMAC CEO say?

Sangeet Chowfla, president and CEO of GMAC, said “In a little more than a decade, the proportion of surveyed recruiters planning to hire MBA graduates has grown significantly, a trend especially notable in Europe, where the percentage jumped from 44% in 2010 to nearly 86% in 2021, and in the United States, where it grew from 56% to 94%.”

Why do companies hire MBA Graduates?

Chowfla explains that as corporations recover from the adverse effects of the pandemic and reconstruct their workforces, it is natural for them to hire, especially B-school graduates who have strengthened their value proposition as an employee. He further said that as B-schools would continue to evolve modalities and more candidates would be able to access MBA and business master’s programs in an online mode, it will present the graduate management education community with great opportunities to align expectations and outcomes for graduates and corporate recruiters.

Why is MBA important? - Take a Decision

This report is a great attraction for a prospective student of a full-time MBA program, who is doubtful because of the pandemic having crept in. An MBA, an essential degree which teaches you various skills such as business administration, business strategy, reading the business environment, understanding organizational behavior, human resource management, financial management, communication skills, etc. could be a turning point in your career path. Eventually, the final decision has to be yours considering your strengths and weaknesses, but if you do get in for this Masters in Business Administration, the GMAC predictions suggest that going in for it will give you a good average salary in the future.