Alsop Perspective: Tradeoff to a One-Year MBA
By Ron Alsop
The University of Rochester’s Simon Graduate School of Business has proven quite adaptable to the changing market for management education. In recent years, it has diversified its product mix with specialized one-year master’s degrees, as well as an Early Leaders initiative for students with little or no work experience.
Yet Dean Mark Zupan last year opposed adding a one-year MBA to its portfolio—even as fewer people applied to its flagship two-year program. “I was basically worried about whether we could deliver a quality education in a shorter time period and whether we would end up seeing weaker professional development and placement outcomes as a result,” he explained.
Why, then, is the Simon School launching a one-year MBA next year? Zupan’s change of heart came after the school developed a strategy to market the shortened program to seasoned “career builders” rather than career switchers who need the summer internship experience in a two-year program. “Our model is similar to an executive MBA, just with younger students,” Zupan said. “We want people with four or more years of work experience who want to go further in management but stay in the same or similar field."
He believes the program, which retains the core curriculum while cutting four electives, could produce strong placement rates. While he remains "cautiously optimistic," he says the new MBA's survival will depend on graduates’ success in the job market.
Coming to America
Long popular in Europe and other parts of the world, such fast-track MBA programs are gaining a bigger foothold in America. In response to the latest application trends, more universities are launching 12-month—or even shorter—MBAs, while schools that have long offered a one-year degree are expanding class size.
According to the Graduate Management Admission Council, 54 percent of one-year MBA programs in the US reported a jump in applications for the class starting this fall, compared with only 32 percent of two-year programs. For example, Northwestern University’s Kellogg School of Management saw applications fall 7 percent for the two-year MBA but increase 6 percent for the one-year degree. Now, it plans to double the size of its one-year MBA to some 200 students and shrink enrollment for the two-year MBA.
Rising interest in accelerated MBA degrees is driven largely by reduced tuition and housing expenses and lower opportunity costs, thanks to less time out of the workplace. But one-year programs also seem like a natural for the millennial generation, which craves instant gratification and is always in a hurry to make career advances. When I interviewed young people for my book The Trophy Kids Grow Up: How the Millennial Generation Is Shaking Up the Workplace, virtually all of them were impatient to move quickly to new positions within their companies--or to jump to other employers.
“For those millennials who know what they want, they seem focused and ready to get at it,” said Betsy Ziegler, associate dean of MBA programs and dean of students at the Kellogg School. “Some are starting companies and don’t want to waste time.”
What About Job Placement?
Although saving time and money sounds appealing, prospective students shouldn’t lose sight of their most important objective: a desirable job and paycheck after graduation. Unfortunately, they could find that some fast-paced MBA degrees don't deliver.
The Simon School’s research revealed that placement rates for one-year MBA graduates at some top-tier US schools trail those for their two-year MBA counterparts by as much as 15 percentage points. Similarly, in a global GMAC survey, 86 percent of two-year MBA students in the class of 2011 reported that they had secured a job after graduation, compared with 75 percent of those in one-year programs. And one-year MBA graduates had to settle for lower median salaries: US$73,203 vs. US$85,000 for two-year students.
“We have to apply a lot of scrutiny to one-year MBA applicants because we don’t want to bring in students who won’t be successful in their courses or career search,” said Katie Lloyd, director of admissions for the one-year MBA at Emory University's Goizueta Business School, where the number of one-year students has risen to 48 from about 40 in recent years. "For example, we discourage people interested in switching to investment banking because it hires heavily from internships." She reports that the placement rate was about the same for one-year and two-year MBA graduates this year.
At Cornell University’s Johnson Graduate School of Management, about 92 percent of two-year MBA students in the class of 2012 had received job offers by three months after graduation, compared with about 84 percent of those in the accelerated program. “The one-year model is not perfectly aligned with some companies’ recruiting patterns,” said Risa Mish, faculty director for the accelerated MBA. “But other companies are very interested in the deep technical expertise of some of our one-year students. It’s not unusual for one of our students to have a master’s in biological sciences and transition to pharmaceutical management or healthcare consulting.”
To help compensate for the lack of a summer internship, Cornell students in the abbreviated program can enroll in the Management Practicum and take on consulting projects with companies in such areas as technology, pharmaceuticals and finance. “It’s not the same as a summer internship,” Mish said, “but it gives students something to talk about in a job interview and show recruiters they can apply their critical thinking skills to real business problems.”
As more schools add or expand one-year programs, their graduates and career services staffs will need to educate corporate recruiters. Although Ziegler says Kellogg’s one-year students fare as well in the job market as their two-year counterparts, she acknowledges that students report back that some recruiters are unfamiliar with the school’s one-year MBA. So at a Recruiters Day event last May, Kellogg staff members focused more on their expanding one-year program and featured some one-year MBA students on a panel.
Some companies are even reluctant to talk about one-year MBA degrees because they aren’t high on their radar. When I asked Ernst & Young for an interview about recruiting one-year MBA graduates, a spokeswoman declined, explaining, “This inquiry doesn’t match our candidate pool.” IBM Corp. also wouldn’t comment. “Our heaviest recruiting schools are two-year programs, so I’m not sure this is a good fit,” a spokeswoman said in an email.
General Electric Co., which is open to considering one-year candidates, sees both pros and cons to the speedier programs. “It takes hard work and character to complete a more rigorous one-year program,” said Chris Thomas, global recruiting director for GE’s Experienced Commercial Leadership Program. On the other hand, “one-year students can miss out on leadership opportunities through student organizations and case competitions, as well as the summer internship, which is a strong pipeline into many companies today.”
As the Simon School at Rochester evaluates applications to its first one-year MBA class, Robert Park, executive director, corporate relations and career management, is thinking ahead to where they’ll land after graduation. His target market: business managers who will be doing just-in-time hiring in the spring of 2014.
“Campus recruiting in the fall is HR process-driven, which means mainly hiring from two-year MBA programs and especially from a company’s pool of summer interns,” he said. “But hiring managers want candidates who can make an immediate impact in jobs they need to fill quickly. So, we’re dedicated to making sure the one-year MBA program brings in career builders with significant experience that we can sell to that market. It’s no different than a headhunter.”
Ron Alsop is a former Wall Street Journal columnist and editor and the author of The Trophy Kids Grow Up: How the Millennial Generation Is Shaking Up the Workplace and The Wall Street Journal Guide to the Top Business Schools. The Alsop Perspective runs quarterly in Graduate Management News.