(Photo: http://www.globecampus.ca/)
As promised a few weeks ago, you will find a complete report on the MBA market trends. These findings are results of research done by myself and Diego Castillo in consulting an MBA program in Madrid. Please take the time to read through...
Market Analysis
Application VolumeThe application volume in the MBA market has been increasing steadily since 2006. According to extensive research done in the field, almost 77% of programs have experienced an increase in the volume of applications, and they declare that they have received more applications than in the previous year.
Full-time MBA programs benefited the most from this increase in application volume. Approximately 80% of these programs declared they had received more applications than in the previous year. Flexible MBAs also ripped the benefits of this boom in applications, showing an increase in application volume in 82% of these programs. The MBA programs that benefited less from this boom was the Part-Time MBA; only 58% of these programs declared an increase in application volume.
Parallel to this, specialized Masters in Science (MS) in Business and specialized MBAs also showed a steady increase in application volume. Those programs specialized in Finance experienced the best of this boom with 73% of these programs declaring they had received more applications in for the academic year 2008-2009 than for the previous year. The Part-Time programs specialized in Accounting and other fields also showed increases in application volume; 68% of specialized Part-Time Accounting programs featured increases in application volume, while 67% of specialized programs in other business fields (Marketing and Consulting) also experienced an increase in application volume. On a different plain, specialized Full-Time Accounting programs showed the smallest increase in application volume with only 58% of these programs receiving more applications than they received the year before.
It can be concluded that the overall MBA market is experiencing sharp increases in application volume. Full-Time MBA programs showcase the biggest increases in application volume and Part-Time MBAs present the smallest increase in application volume. In comparison, specialized programs in Finance featured the biggest increases in application volume while specialized Full-Time Accounting programs show the smallest increase in application volume. (See appendix 1)
Net Trend in Application Volume
The net trend is calculated by using the percentage of schools showing an increase in application volume minus those showing a decrease in application volume. The significance of net trends is that they express the difference by which increases in application volumes surpass decreases in application volumes for each of the programs in the market. This means that the number of schools offering a program (Full-Time MBA, for example) receiving more applications surpass those schools that received less applications. To illustrate better, an upward net trend of 68% would mean that increases in application volume surpassed decreases in application volume by 68%.
Research has shown that the MBA programs with the highest net trends were Full-Time traditional MBAs and Flexible MBAs with upward net trends of 68% and 67% respectively. Part-Time MBAs and Executive MBAs showed the lowest upward net trend at 38% and 32% respectively.
On the other hand, specialized business programs with the highest upward net trends were Finance programs, showing an outstanding 66% upward net trend. The programs with the lowest upward trends in application volume were those offering specializations in Management or Business Administration; these programs showed an upward net trend of only 25%. (See appendix 3)
From this data it could be concluded that most schools offering Full-Time MBA programs receive increasing numbers of applications at higher rates from one year to the next. Meanwhile, most schools offering Part-Time MBA programs receive increasing numbers of applications, but at lower rates. On the other hand, most schools offering specialized programs in Finance experienced the highest rates in application volume increase while most schools offering specializations in Management or Business Administration experienced smaller rates in increases in application volumes.
Net Trends in Application Volume Outside the US
The net trends in application volumes for MBA programs, MS in Business and specialized MBAs located outside the United States have presented constant upward movement. In fact, net trends in application volume for programs outside the US are even higher. Research shows that the net trend for Full-Time MBA programs located outside the US showed an astonishing 80%; recall that the significance of this is that the number of programs with increased application volumes surpassed the number of programs with decreasing application volumes by 80%. On the other hand, the MBA program outside the US that showed the smallest net trend was the Executive MBA.
MS in Business and specialized MBAs located outside the US also showed an impressive upward net trend at 50%. From this it can be concluded that most schools offering Full-Time MBAs outside the US receive increasing numbers of application at higher rates each year. Adversely, most Executive MBAs outside the US receive increasing number of applications at the lowest rate. Also, schools that offer MS in Business and specialized MBAs receive increasing numbers of applications at steady rates. Overall, though, the majority of business programs outside the US receive increasing numbers of applications year after year. (See appendix 2)
Comparison between the Application Volume of US Programs and Foreign Programs
The trends in application volume have been much higher for most foreign business programs. For example, US Full-Time MBAs have shown a net application volume trend of 67%, while Foreign Full-Time MBAs show a net trend of 80%. Full-Time Accelerated MBAs in the US show a 56% upward net trend while foreign Full-Time Accelerated MBAs show a trend of 61%. Executive MBAs in the US were more popular than those in foreign locations. Executive MBAs inside the US showed a net trend of 38%, while those in foreign locations showed an 18% trend. While US MS in Business and specialized MBAs showed a 38% upward trend, foreign MS in Business and specialized MBAs showed a 50% trend.
From this research it can be concluded that the number of schools receiving increasing volumes in applications is higher in foreign locations than in the US. It can also be concluded that Executive MBAs in the US are more popular than their foreign counterparts, while MS in Business and specialized MBAs are more popular outside the US. (See appendix 2)
Numbers of Applications by Program
The number of applications for business graduate programs is unequally distributed among different programs across the MBA market. The programs driving the biggest number of applications on a yearly basis are Full-Time MBAs, featuring an average of yearly applications of 889. Full-Time Accelerated MBAs and Masters in Management or Business Administration are the next best application drivers, showing average yearly application levels of 287 and 283 respectively. Executive MBAs and Part-Time Masters in Finance present the lowest average of yearly applications at 125 and 117 respectively.
From this research it can be concluded that the most popular programs in the global MBA market are Full-Time MBAs and Full-Time Accelerated MBAs. MS in Management or Business administration are the biggest drivers of applications among non-MBA degrees. The least popular programs are Executive MBAs and Part-Time Masters in Finance. (See appendix 3)
Applicant Profiles and Application Trends
Applicants to Business programs vary significantly across several demographic factors. However, there is one factor that seems to be the factor of choice by which MBA employers abide when recruiting new MBA hires: years of work experience. Research shows that 90% of MBA employers find it desirable that candidates have one or more years of work experience, while 67% are looking for candidates with three or more years of experience.
In comparison, 77% of employers looking for graduates from MS in Business and specialized MBAs expect candidates to have one or more years of experience. From this research it can be concluded that years of work experience is of significant importance for employers of MBAs, and employers of MS in Business and specialized MBAs.
Application patterns follow the profiling trends set by employers. Applicants with more work experience aim more for MBA programs; less experienced applicants tend to apply more to MS in Business and specialized MBAs. An impressive 79% of applications to Full-Time MBAs (the most popular program in the market) come from applicants with work experience. Approximately 56% of total applications come from applicants with 3 to 10 years of experience, while 23% of applications come from applicants with more than one year of work experience, but less than three.
On the other hand, 45% of applications to Masters in Management or Business Administration and other specialized MBAs come from applicants with less than one year of experience; 23% of applications come from applicants with more than one year of experience but less than three. This means that 68% of the total application volume received by programs offering Masters in Management or Business Administration come from applicants with less than 3 years of work experience.
From these facts it can be concluded that MBA graduates with more work experience are preferred by MBA employers, and applicants with more work experience tend to apply to Full-Time MBAs, while employers of graduates from MS in Business and specialized MBAs look for applicants with at least one year of work experience, and applicants with less years of experience tend to apply to MS in Business and specialized MBAs over any other program in the market. (See appendix 4)
Trends in Applicants’ Valuation of MBA Programs
Brand equity is the most important asset that a school can have in its books. For a MBA program, brand equity is crucial to succeed. Research shows that applicants to MBA programs and MBA employers utilize schools’ brand equity as the factor of choice by which they assess the quality of a graduate business programs.
According to research, applicants rank the reputation of the programs to which they are considering attending as the most important element influencing their final choice. On the second slot, applicants rank personal contact with alumni while the program’s prospectus (a printed statement describing an enterprise) ranked as the third most important element in applicant decision-making among various programs. The information on the program’s website and the program’s direct marketing strategies ranked fourth and fifth respectively.
From this it can be corroborated that a program’s brand equity is the most important asset a MBA program can have. Also, the influence of a program’s alumni is crucial in the decision-making process applicants go through. Overall, all of the five factors listed above refer to the image a MBA program portrays, and thus, safeguarding this image is essential for success.
Trends in Salary Compensation of MBA Graduates
MBA graduates tend to receive higher salary compensations than graduates from any other business programs. Those candidates with more years of experience tend to receive higher salaries when employed. Research shows that a MBA graduate with one to five years of work experience is likely to receive greater compensation than are other graduates with similar work experience. In addition, MBA graduates tend to be hired for mid-level position, and earn salaries that are almost double the salary of a recent graduate with a bachelor’s degree.
In comparison, research in the field has found that graduates of MS in Business and other specialized MBAs tend to be employed at entry level positions and they tend to have less than three years of experience. The salaries that these graduates tend to receive are usually 30% higher than salaries received by graduates with bachelor’s degrees.
Overall, years of experience seem to be the main determinant of salary levels. MBA graduates and graduates from MS in Business and from other specialized MBAs receive about the same salary compensation when they have no work experience. However, as the number of years of work experience increase, the salary compensation of MBA graduates begins to pull away from the salary compensations offered to the other graduates with the same number of years of experience.
From this research it can be concluded that MBA graduates with more years of experience receive the highest salary compensation among graduates from all business programs. It can also be concluded that graduates from MS in Business and specialized MBAs tend to have less than three years of experience. In addition, they tend to earn 70% less of what an experienced MBA graduate earns after graduation. Finally, it can be concluded that experienced MBAs tend to occupy mid-level posts while MS in Business and graduates from other specialized MBAs tend to land in entry-level positions.
Conclusions on Statistics
Application volume according to products in the market• The MBA market is experiencing sharp increases in application volume in all programs in the market.
• Full-Time MBA programs show the highest increases in application volume
• Part-Time MBAs show the lowest increase in application volume.
• Specialized programs in Finance show the highest increases in application volume among non-MBA programs.
• Full-Time Accounting programs show the smallest increase in application volume among non-MBA programs.
• Full-Time MBA programs show higher application volumes than specialized programs in Finance.
Fastest growing application volumes according to programs in the US market
• Most schools offering Full-Time MBA programs show higher rates of application increases.
• Most schools offering Part-Time MBA programs show the lowest rates in application increase.
• Most schools offering specialized programs in Finance show higher the rates in application increase among non-MBA business programs.
• Most schools offering specializations in Management or Business Administration show the lowest rates in application increase.
Fastest growing application volumes according to programs in the foreign market
• Most schools offering Full-Time MBAs outside the US receive increasing numbers of application at the highest rates each year.
• Most Executive MBAs outside the US receive the lowest rate of increasing number of applications.
• Schools that offer MS in Business and specialized MBAs outside the US receive increasing numbers of applications at steady rates.
• The majority of business programs outside the US receive increasing numbers of applications year after year at steady rates.
• The number of schools receiving the highest rates in application volume is higher in foreign locations than in the US.
Program popularity in the global MBA market
• The most popular programs in the global MBA market are Full-Time MBAs and Full-Time Accelerated MBAs.
• MS in Management or Business administration drive the highest number of applications among non-MBA degrees.
• Executive MBAs in the US are more popular than their foreign counterparts.
• MS in Business and specialized MSs in Business are more popular outside the US.
Applicant Profile
• Experienced applicants tend to apply to Full-Time MBAs and other MBA programs.
• Inexperienced applicants tend to apply to MS in Business and specialized MBAs over any other program in the market.
Trends in Applicants’ Valuation of MBA Programs
• Applicants value reputation the most when deciding between MBA programs.
• Personal contact with a program’s alumni is the second most valued element by MBA applicants.
• The program’s prospectus, the information available in the program’s website and direct marketing tools implemented by the program to target students are the next three most important factors.
• These five factors refer back to the image of the program. Thus, the program’s image is crucial to the present and future success it will enjoy attracting students.
Recruitment Profile of Business Graduate Employers
• MBA employers prefer MBA graduates with more work experience
• Employers of graduates from MS in Business and specialized MBAs look for applicants with at least one year of work experience.
• MBA graduates with more years of experience receive the highest salary compensations.
• Graduates from MS in Business and specialized MBAs tend to have less than three years of experience.
• Graduates from MS in Business tend to earn 70% less of what an experienced MBA graduate earns after graduation.
• Experienced MBAs tend to occupy mid-level posts.
• Graduates from other specialized MBAs tend to land in entry-level positions.
Appendixes
1) Net Trend in Application Volume MBA Programs
2) Net Trends in Application Volume Masters in Business
3) Net Trends in Application Volume Outside the US
4) Number of Applications by Program
5) Applicant Profiles and Application Trends
Reference List
• Graduate Management Admissions Council. Corporate Recruiters Survey 2008. Survey Report.
• Ivy, Jonathan and Peter Naude. Succeeding in the MBA market place: Identifying the underlying factors. Journal of Higher Education Policy. Vol. 26, No. 3. November 2004.
If you have gotten this far, GREAT! You are obviously interested in this research and our work. We have already made several recommendations for a company in Madrid based on our findings here and additional findings that are not exposed here. If you would like to see how our research might help your small business, please leave me a comment and I'll be in touch!
Posts
No comments:
Post a Comment