What does the fast and growing demand for specialized master’s programs mean for career services professionals at business schools? MBA CSC discusses the trends in a “quick five” Q&A with Michelle Sparkman-Renz, director of research communications at GMAC.
Q1: Last week GMAC reported new data for increasingly popular master’s programs – what could this mean for Career Services professionals?
A: For the fifth consecutive year, since we started watching these programs, more than half of master’s programs surveyed in our annual Application Trends Survey showed application volume increases from the previous year. Career service professionals are likely to see not only full classes for master’s candidates, but an increase in expected class size. This means there will be more early-career or specialized job seekers to connect with employment opportunities than last year. Given differences in demand for these candidates by world region, there may also be more demand on career services professionals to help companies understand the skills and knowledge these master’s candidates bring to the workplace that differentiate them in the hiring mix.
Q2: Are master’s programs competing with MBA talent for one or the other: seats in class or jobs afterward?
A: Actually, based on applicant profile data, I view them as two distinct pipelines for business schools. In terms of program seats, the vast majority of master’s program applicants are early career or pre-experience talent, essentially straight from undergraduate programs with little to no work experience. MBA applicants, on the other hand are slightly older, with more work experience. Master’s programs saw growth from domestic talent, but the demand was greatest among foreign applicants to these programs. On the other hand, among MBA programs, we noticed that there was a greater demand among working professionals wanting to study locally or close to their job.
In terms of jobs and employer demand, the majority (79%) of the US employers we surveyed planned to hire MBAs in 2012, while 30% planned to hire recent graduates with master in management degrees, and 28% of companies looked to hire master of accounting talent. In Asia and Europe, demand for MBA new hires was also strong, with 80% and 67% of companies looking to hire them, respectively. But demand for master’s degree-holders tells a different story, as more than half of companies in each of these regions planned to hire Master in Management new hires (58% of Asian firms and 55% of European firms). And, hiring for master of accounting talent was nearly as robust in Asia (54% of companies hiring in 2012) but downshifted in Europe to just 35% of companies.
Our end-of-year Employer Poll will give us an updated look at these trends, and we’re inviting companies and recruiters to tell us about their plans in the November study. Early registration is now open for that study, and any recruiters wanting to participate will receive the detailed report in December about trends in actual hiring for 2012 along with early plans for hiring in 2013.
►Companies and job recruiters can sign up for the Employer Poll at this link: gmac.com/HiringPoll
Q3: How do employers’ expectations differ for MBAs from masters?
A: There’s greater demand from employers to hire MBA talent for mid-level positions compared with entry-level positions for master’s talent. And, for the past several years we’ve seen that companies expect to pay each of these management new hire types a salary premium compared with other new hires in the Corporate Recruiters Survey. Median salary figures US-based employers expect to pay new hire salaries translates to a 20% premium for master’s hires over new hires with bachelor’s degrees. Even further, MBA graduates will earn an 80% salary premium over recent BA graduates. Interestingly, new data about employer funding (asked for the first time this year) in the 2012 Application Trends Survey, showed that nearly 4 in 5 MBA programs (77%) and more than half of master’s programs (56%) expect students in the incoming 2012-2013 class to receive some level of financial support from employers.
Q4: Any “must have” data that career service professionals should pay attention to?
A: We observed that globally, companies want new MBA hires with more work experience (38% of companies want MBAs to have more than three years of work experience), while there is much more of a split in the expectations of master’s degree-holder work backgrounds. Half of companies we surveyed want master in management hires with more than three years of experience, 42% of companies want the same from master of accounting talent. So, I expect internships will be more important in helping candidates without much experience develop their résumés. We’ve seen internships play a crucial role in the job search for both MBA and master’s candidates. Among 2012 graduating b-school students from all program types, not only were 70% of students able to convert their internship to a full-time job, but those who did internships expected to earn 78% more after their program compared with their pre-degree salary. Peers who did not have an internship expected a 50% rise in earnings.
Q5: Last question, anything surprising about the growing interest in master’s programs?
A: Actually, I don’t think anything is necessarily surprising because we’ve watched demand for master’s programs increase incrementally at the global level. Although the majority of candidates consider an MBA program, we are seeing more students interested only in master’s programs. In our mba.com Prospective Students Survey, 17% of prospective students that told us they are considering only a master’s program, up from 12% in 2009. One item that’s a little surprising is how diverse these programs are, and how fast business schools appear to be adding specialized master’s to their portfolio of program offerings. A look at the sample of master’s program descriptions in our recent survey included topics like investor relations, and audit and management control, as well as arts and NGO management, media management, corporate communication and reputation management, data analytics, innovation management and entrepreneurship…the list goes on.
Michelle Sparkman-Renz is director of research communications at The Graduate Management Admission Council® (GMAC®). She is a frequent commentator on trends observed across stages of the student and recruiting funnel, always aspiring to do so without being too geeky. Follow @gmacResearchers on Twitter for bite size data updates.
GMAC is a non-profit education organization of the world’s leading graduate business schools and owner of the GMAT® exam accepted by more than 5,400 graduate business and management programs worldwide.