The decision to pursue an MBA is not one potential students should take lightly. An MBA program involves a substantial commitment of time and energy, not to mention money. With full-time, two-year MBA programs costing $38,050 on average—and many top-ranked programs exceeding $100,000—obtaining a Master of Business Administration degree is a major financial commitment.
Which MBA programs have the most employable grads?BY Rich GrisetDecember 01, 2021, 7:34 PM
For many students, the potential payoffs are worthwhile. In addition to acquiring new knowledge about a broad range of business-related topics like economics, management, entrepreneurship, and statistics, MBA graduates are often rewarded with career advancement and a significant increase in pay. For example, Duke University alums recently cracked $175,000 in pay for the first time, while some Dartmouth grads are making $200,000, and NYU Stern MBA grads are earning more than $225,000 out of school.
With so many MBA programs out there, how can you ensure the school you pick will lead to employment success? Here’s what you need to know.
High rankings, high employment
Generally speaking, graduates of the business schools that top Fortune’s rankings enjoy high rates of employability, says Caryn L. Beck-Dudley, president and CEO of business school accreditor and nonprofit association AACSB International. “Fortune’s ‘Best MBA’ rankings include many AACSB-accredited schools, each of which is held to the rigorous standards that are an important indicator of quality for business schools,” she says. “Graduates of AACSB-accredited schools are innovative leaders prepared to excel in today’s competitive global workforce.”
In late June, the Graduate Management Admission Council (GMAC), a nonprofit association of business schools, released its corporate recruiters survey, which found that 59% of organizations reported that they will primarily recruit from “leading business schools” this year. Broken out by industry, consulting reported the highest percentage that will recruit from leading business schools at 69%; the tech industry had the lowest percentage, with 55% of those employers recruiting from leading business schools.
What are these recruiters looking for when considering MBA candidates? Nine in 10 recruiters in consulting said the most important skill they seek is interpersonal skill, says Rahul Choudaha, industry insights and research communications director for GMAC.
Among the top 10 schools in Fortune’s ranking of the best full-time MBA programs, the class of 2020 was highly employable. Generally, 90% of graduates seeking employment reported having a job offer within three months of graduating; slightly less than 90% had accepted a job offer three months after graduating. The median baseline salary for these grads was about $150,000.
Of those 10 programs, the Massachusetts Institute of Technology’s Sloan School of Management saw the highest percentage of job offers within three months of graduating at 95.5%. The highest acceptance rate was 92% at Dartmouth College’s Tuck School of Business. The highest median base pay for graduates belonged to Stanford University’s Graduate School of Business at $156,000.
It’s worth noting that these salaries are median base pay, and some MBA graduates earn more than twice the average straight out of school. For example, some recent Stanford MBA grads are earning more than $400,000 in their first jobs.
Different perceptions of online programs
The GMAC report also found that recruiters don’t view graduates of online programs at parity with those from on-campus, full-time programs. Says Choudaha: “Full-time MBA programs provide immersive experiences to sharpen [meta-skills], such as communication and leadership, that are highly valued across industries.”
Despite innovation in online programs and their adoption, the ability to build meta-skills such as interpersonal communication and leadership is not yet proven, Choudaha says. “The immersive experience of full-time MBA programs offers deep opportunities for exploration, networking, and engagement with peers, alumni, and faculty that go beyond meeting course requirements. Online programs have not been successful in replicating these immersive experiences.”
The cost, and a danger sign
GMAC’s survey found that there is a $3 million average lifetime earnings gap between people who hold a bachelor’s degree and people who have an MBA, but the cost of an MBA program is still a major consideration when deciding on a school. Higher-ranked programs may have a higher rate of employment, but also cost more.
“Many of them are very, very expensive, so what’s your return on investment? A lot of the time, students have to go into debt [for an MBA], and they may be stacking debt from their undergraduate programs,” says Beck-Dudley.
If you’re curious about how employable the MBA graduates of a specific program are, most schools post an employment report online for their most recent class. These reports also include statistics on what percentage of students found employment in various industries.
The class of 2020 at top-ranked Harvard, for instance, saw 24% of recent MBA grads find employment in consulting, 19% in technology, and 18% in private equity. If you know the industry you would like to pursue, it’s a good idea to look at these figures to ensure they have networking connections in that field.
Though all MBA programs teach the fundamentals of business that are necessary to succeed in the workforce, Beck-Dudley says, potential MBA candidates should attempt to find the right school for them.
“Business students need to search for a school that best fits their own individual needs and future plans, and pair their aspirations with their MBA program of choice,” she says.