Europe might be heading for a mild recession and unemployment may be climbing in the UK, but there is some brighter news for business graduates. A survey of employers conducted by the Graduate Management Admission Council (GMAC) has found that graduates of MBA programmes and other Masters degrees related to business could find their job prospects improve in 2012.
GMAC oversees the graduate management admission test for business school applicants. Every year, it canvasses companies and organisations throughout the world about job prospects and salaries for those with business-related degrees. The most recent study consulted 216 companies and organisations and found a notable increase in those planning to hire recently graduated management students in the coming year.
The headline figures are encouraging: nearly three-quarters of the companies surveyed plan to hire MBAs in 2012, up from 58 per cent in 2011. Nearly four times as many companies are planning to increase the number of MBAs they hire in 2012, while more than half of employers expect to recruit people with a Masters in management or another specialised subject. Overall, there may also be more jobs out there for business school graduates. The survey reveals that companies plan to boost the number of positions available in 2012. The barometer is rising for remuneration too: 32 per cent of companies aim to increase salaries for MBAs joining them, and 65 per cent are planning to keep starting salaries at the same level as 2011.
"These figures bear out the fact that, in recessionary times, you can only cut costs so far," explains Dave Wilson, CEO of GMAC, talking from its headquarters in the USA. "What we are seeing in the marketplace here, and I suspect in Europe also, is that companies have cut as far as the bone and can go no further. As they start to grow and retool, they will need to bring in the best possible talent. That's where the MBA and Masters graduates become particularly attractive in providing exceptional players who can come in hitting the ground running. If you can bring someone in on 3 January who starts being productive immediately, it makes sound economic sense. While much of the world grapples with economic uncertainty, our survey shows there is cautious optimism in the market that we are starting to come out of the economic downturn. When that happens, you have to have players who are going to grow and thrive with that market. If hiring projections for this coming year remain robust, the class of 2012 can look forward to entering a markedly improved job market when they graduate."
Although the majority of the companies responding were based in the USA, Wilson believes the survey still has value for graduates applying for jobs in Europe. "The jobless recovery in the US is starting to happen and companies are looking to grow. It's true that the US is a little more optimistic than Europe, yet many of the American companies surveyed recruit worldwide. I also feel upbeat about the European job scene too."
The view from a major recruiter of graduates in the UK appears to support Wilson's level of optimism. Paul Stephenson, graduate recruitment partner at the accountancy and professional services group Deloitte, explains: "The 2011/12 recruitment season has been a positive one for us and the firm's potential recruits. During the downturn, Deloitte's hiring targets for graduates stayed at approximately the same level and over the past two years have increased to 1,200. We offer careers in 21 offices across the UK and have seen an increase in applications."
When Deloitte's buoyant analysis is seen together with activity it has observed from other employers, Stephenson believes it suggests that the market is on course to "returning to pre-recession levels".
Going for an MBA or any business-related Masters is a big investment in both time and money, particularly when the effects of the global downturn are still being felt. There may be better news for graduates entering this year's job market, but as Wilson points out, anyone who is considering applying for a graduate management degree course should always carry out a thorough economic analysis, including an evaluation of the potential return on the hefty investment it would require.
Hard on the heels of the employers' survey, GMAC has just released the findings of its alumni perspectives survey, which can help those considering applying for business Masters to make a more informed decision. More than 4,000 alumni responded from all over the world and graduates reported that they had recouped one third of the financial investment in their degree within the first year of completing their course, and 100 per cent after four years in the workplace.
European graduates earned the highest starting salaries, with an average of $84,000 (£54,000). Significantly, three out of four alumni of the class of 2011 who are currently in a job report that they could not have obtained that job without having earned their graduate management degree.
The findings of these surveys could be good news for self-funding students, whose numbers appear to be rising. At the University of Bath School of Management, for example, the fees of 45 per cent of participants in the executive MBA are not paid by companies. As Maggi Preddy, MBA admissions manager at Bath, sees it: "Managers today are willing to invest more in developing their own human capital, particularly in areas that pay off immediately, such as improving conflict resolution skills and key management competencies. We see this as an important trend for the executive MBA in particular."
According to Wilson: "One of the advantages of the MBA in general is that it gives you one more credential in your portfolio. It tells a potential employer that this is the kind of person who has made an investment in his or her intellectual capital. In tough times, that investment becomes even more valuable to enable you to distinguish yourself from the competition and increase your street value. These survey results demonstrate that a graduate management degree is, in fact, a solid investment in your future whichever way the economy turns."