Reports of MBA's Death Greatly Exaggerated
There’s good news for MBA grads and b-schools, according to GMAC® research: Recruiters are going to more campuses to look for MBA hires, the percentage of MBAs in the hiring mix is up from last year, and applicants this year are as good as or better than last year's applicants. So why has a recent article in the mainstream media suggested that there is a shortage of MBA applicants—and, more important, how can b-schools get the real message out?
It’s a dramatic theme that sells and is recycled in the press: “The MBA degree is in trouble.” Sometimes, the target is business school education; sometimes, it’s the management profession or job prospects for MBA grads. This time, a popular U.S. business magazine (okay, it’s BusinessWeek) maintains that there is a shortage of applicants to MBA programs and that “all” programs are becoming less selective in order to fill seats. The same article reported that there is an employer trend toward hiring fewer MBAs.

GMAC® research shows that there is good news that you can report to the critics and journalists who ask for your opinion of what is happening in the graduate management education market:

  • There is no shortage of MBA candidates. Business schools never have to use their entire applicant pools to fill classes, despite fluctuations in application volume.
  • The job outlook for MBAs graduating this year is positive, which is always positive for schools, given the importance of employment statistics and satisfied alumni. According to the Corporate Recruiters Survey, employers plan to hire more MBA grads in 2005 than they did in 2004, and recruiters are planning to visit more b-school campuses to recruit those grads. Recruiters are also more positive about the strength of the economy than they have been in years—always a good sign for potential hires. (To read an executive summary of the Corporate Recruiters Survey click the link or visit www.gmac.com/surveys.)
  • The quality of the applicants to business schools has remained consistent or improved over the past four years—including this year, as we have learned from the annual GMAC® Application Trends Survey (results of the 2005 survey will be released in June).
  • Students and employers make their decisions about schools largely on the basis of the quality and reputation of those schools. Quality is important to students choosing where to go to business school, and corporate recruiters want to visit high-quality, reputable schools where they know they will find a full slate of qualified job candidates. Business schools committed to delivering a valuable educational experience understand this and do not lower their standards to fill seats.
  • Demographic shifts have limited the number of people in the typical business school student age group (25 to 34) in some world regions, but these trends will turn in the next few years, bringing about a wider potential applicant pool, particularly in the United States and potentially Asia, which have seen declines in this age group.

So, spread the good news about MBAs—there is no real shortage, no loss of quality in the applicant pool or student body, and certainly no reason to think that MBAs are disappearing from the landscape. Plus, the hiring outlook for MBA grads is better than it has been in years.

Dramatic headlines may sell magazines and draw Web traffic, but only comprehensive research and analysis can give you the real story.

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