The Value Of An MBA In 2015

I can’t say it any better, and no point in re-inventing the wheel, so I’m reposting this with credit:

For MBA students who decided to go to business school over the past five years, it’s been an amazing time, rich with career opportunities and increasingly handsome pay. If anything, the value of the MBA itself has been confirmed again and again as one of the very few degrees that brings an immediate payoff.

For the Class of 2014, starting pay packages and job placement rates are at either record or near-record levels. Indeed, at some of the super elite schools, the job offer rates may seem somewhat lower than a casual observer might expect. It’s only because the MBA job market has become so frothy that graduates of a handful of very prestigious schools have become ever more choosy and are holding out for the perfect opportunity, highly confident it will come.

Starting salaries of $110,000 to $125,000 are now the median at 16 top U.S. schools, ranging from Harvard where the median was $125,000 to the University of Virginia’s Darden School of Business where the median was $110,000. Median sign-on bonuses–now given to the vast majority of MBA graduates from top schools–are $25,000. And all these numbers tend to be highly conservative because they do not include increasingly common year-end bonuses, tuition reimbursement, stock grants and relocation expenses. The graduates of several top European schools, including such key players as London Business School, INSEAD and IESE Business School in Spain, are also in that upper range.

Most importantly, the placement rates at these schools are virtually near full employment, a massive turnaround from the numbers posted in the depth of the recession in 2009 and 2010. Last year, a remarkable 98% of the MBAs from Emory, Wharton and Chicago had job offers three months after graduation. None of the top schools had placement rates below 90% at the three-month mark.

At Emory’s Goizueta Business School, where its job offer rate at graduation was higher than any other MBA program at 90.4% and equal to the very best rate of 98%, it was a landmark year. “2014 was a very strong year for the MBA job market and Goizueta,” says Wendy Tsung, associate dean of MBA Career Services at Goizueta. “Last year, our top hiring partners extended more offers on campus and we also saw a 15% increase in new companies recruiting on campus. 2015 has been just as strong, especially in consulting and financial services. This is a good time to be graduating from an MBA program.”

Another telling statistic about the demand for MBAs: The starting pay packages being landed at such schools at the University of Texas’ McCombs School and Vanderbilt University’s Owen School are nearly as much as those at the highest ranked elite schools. McCombs grads reported starting salaries of $105,000 this year, while Owen MBAs hit the $100,000 mark. That’s just $20,000 or $25,000 lower than the $125,000 commanded by Harvard, Stanford, and Wharton MBAs. If you adjusted those numbers to account for pay and cost of living in the wider markets of Austin and Nashville and again for industry choices, the difference in MBA starting pay would be negligible.

For graduates of the Class of 2015, it looks only to get better and in all likelihood could be the single best year in history to graduate with an MBA. In fact, the latest research is suggesting that the demand for MBA talent is so great that major corporate recruiters are now reaching deeper into the pool at second tier schools ranked between 20 and 100. Another sign of good fortune is that the most significant increase in recruiting is coming from financial services, a sector that is likely to boost overall salaries and bonuses as it competes more aggressively for the best grads at top schools.

This recent release of the MBA Career Services & Employer Alliance survey found that 64% of the responding schools have seen increased recruiting for full-time jobs, up 23% over last fall. And more than three-quarters reported an increase in full-time job postings. At B-schools ranked from 21 to 50, the increases in on-campus recruiting were nothing but massive, with 81% reporting increases. That compares with 57% of schools ranked from 1 to 20 reporting increases, while 67% of those ranked 51 to 100 reported increases.

“2014 was a very strong year for MBA employment and the increases noted by the majority of participating schools suggest that the 2015 results will be even better,” says Damian Zikakis, director of career services at the University of Michigan’s Ross School of Business. It’s highly possible that this year will be the best year to ever graduate with an MBA degree, even better than the 1980s and 1990s when business school education had its biggest gains.

While there can never be a 100% guarantee of placement in the job a graduate most wants, it’s just about as close as it can get to that ideal. “Placement in our tradition MBA program is probably as robust as ever, with over 95% of the graduates reporting employment success within 90 days of graduation at the top 10 schools,” says Paul Danos, dean of Dartmouth College’s Tuck School of Business. “And the total pay packages are exceeding pre-crash levels.”

Average starting salaries at Danos’ school hit $117,860 last year, up 2.5% from $115,031 a year earlier. Average signing bonuses–reported by 87% of the class–were $28,712, while other guaranteed compensation averaged $34,431. For a graduating student who collected all three forms of compensation, the average would have totaled a whopping $181,003–to start.

-John Byrne, Poets & Quants.

Maslow’s Hierarchy and the MBA Admissions Goals Essay

Abraham Maslow created a 5-level theory of human motivation (Psychology Review, 1943) in which he proposed that human needs and satisfaction levels move upwards according to a “hierarchy” of needs. When lower needs such as sustenance and safety are met, we aspire to fulfill social, self-esteem, and self-actualization needs. The chart looks like this:

credit: Wikipedia
credit: Wikipedia

(The structure of the pyramid itself has been tinkered with over time, for example by Manfred Max-Neef, who sees levels of subsistence, protection, affection, understanding, participation, leisure, creation, identity, freedom.) But the core insight remains: once basic levels of fulfillment are achieved, and as long as they remain achieved, we move up the hierarchy in search of broader fulfillment.

What does this have to do with MBA admissions essays, and how does this help those struggling with the MBA admissions goals essay question in particular?

It helps because it provides a quick, reliable guide to the necessary reach of the essay. Too often applicants deal only at levels 2 and 3, talking of security and quality of employment, taking care of family (including elderly or immigrant parents) and developing friendship and contact networks, career progress, and so on.

This is all important. But there is more to say, and Maslow shows the way to it. The rest of your motivation statement should be rooted in levels 4 and 5: how the MBA will take you activities that create self-respect, and the respect of others, what you will create, or solve or build, and why this will be self-actualizing at the highest level.

As I tell my clients: a good career and family security are great things to want, but what comes after that? You don’t need to aspire to save the world, but you do need to reach into yourself and ask: “levels 4 and 5 — what are they for me? What would actualizing myself at these levels look like? And how will an MBA be part of the route that gets me there?”

 

The Little Story of the Business School and the Avocado

In my book MBA Admissions Strategy I offer the following advice: “Proofread to show your hunger” (that is, hunger for MBA admission, a real desire to be selected.)

Typographic or other careless errors in your text immediately clues Adcom in as to how (un)careful you were with your text, and this tells them not only how organized and detail-oriented you are but also how much you actually really care about your application to their particular school.

It also tells them whether you are a closer and finisher who nails things exactly, or a “glancing-blow” kind of guy.

In this sense MBA admissions works just like a resume you send out for a job. If there’s one error in it, eyebrows will be raised. Two errors and you’ve written yourself out of a job.

The longstanding ‘pet peeve’ across all Adcom readers is that the wrong school name often appears in the text. That is, Stanford GSB Adcom gets essays that say: “I would contribute to the peer learning environment at Wharton by …” Ouch.

The spellchecker will help you a bit, but is not foolproof. It will happily let you say your first mentor was your high school principle. It will not replace Booth with Tuck. Nor does it know that Haas is a business school while Hass is an avocado.

The tricky thing is that you, the essay-writing applicant, will battle to proofread your own work. Obvious errors will slip by undetected because your eyes will be focused (rightly) on content and message value delivery.

The MBA Admissions Studio does not offer a proofing service either, for the same reason. Proofreading should be done by someone who is seeing the essays for the first time, and who is tasked specifically with looking for errors, not reading for content or value.

 

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