An MBA is a proven career accelerator: most graduates will immediately earn salaries that are substantially higher than what they made before enrolling at business school. But the degree is also a good way to facilitate a career reinvention, an outcome that is becoming more important as the job market changes.
A growing number of MBA students are using their degree to change careers. This reflects an economic phenomenon known as the ‘Great Resignation’, whereby the Covid-19 pandemic has pushed swathes of workers to reassess their profession and quit jobs in search of more rewarding or better paid jobs, creating a sharp increase in vacancies alongside last year’s economic recovery, particularly in the US.
The great resignation is a great opportunity for business schools, which are anticipating a jump in MBA applications because of tight labor markets and changing worker attitudes that are boosting attrition rates at many employers.
Traditionally, a hot jobs market would lead to a downturn in demand for MBAs, as workers do not want to miss out on salary increases and promotions. Yet business schools believe the great resignation will help sustain demand, after a surge in applications over the past two years driven by the pandemic.
“As the collective re-thinking trickles down, we anticipate a marked increase in MBA applications — the reason being that a top MBA program is a well-defined and trusted path to transform careers within a relatively short space of time,” says Pollyanna Nethersole, director of international recruitment and admissions at Esade Business School in Barcelona, Spain.
MBA grads seeking big career changes
Last year, 39 percent of those seeking a career change at ESADE managed the ‘career hattrick’ — they switched function, started out in a brand-new sector and they shifted geography too, landing a position abroad.
For many others, changes in working practices have opened up fresh global opportunities. “Following the pandemic, greater autonomy in terms of remote working and schedule flexibility has become an average workplace expectation, which in turn has allowed for lifestyle shifts,” says Nethersole.
Hot labor markets have enabled business schools to attract a greater number of global top employers hunting for talent, and the increase in virtual recruitment prompted by Covid has made it easier for MBA students to interview with companies abroad.
New and disruptive career pathways are emerging, too, with the type of work largely dependent on regional trends. Yet as talent demands from companies evolve, job candidates will have to adapt their unique value proposition in order to be hired.
“What this means is that MBAs need to learn to find and articulate the ways they can contribute to the organization, while evaluating for themselves the growth opportunity of a particular role,” says Rhoda Yap, global director of the Career Development Centre at INSEAD in France, Singapore and Abu Dhabi.
From a career perspective, she says the most valuable asset that you will get out of an MBA is the network. “While at and after business school, building and expanding your networks is key,” she says. “While at school, one should maximize their opportunities to get exposure and information that otherwise they would not have from corporate events.”
MBA career paths are broadening
Traditionally, a career switch is one of the main objectives of joining an MBA program. What has changed are the types of industries that students want to switch to, according to Nicole Tee, director of graduate studies at National University of Singapore (NUS) Business School.
“While consulting was the main target industry in the past, we are seeing more students considering career paths in technology, fintech and ESG-related fields,” she says. While MBA applications have risen in recent years, Tee attributes this more to the growing interest in Asia as a study destination, as the continent grows in importance to the global economy. “I wouldn’t attribute it to the great resignation,” she says.
Nevertheless, NUS Business School notes increased opportunities and heightened interest in sectors such as healthcare, fintech, analytics and the metaverse — a single, universal virtual world that is facilitated by the use of virtual and augmented reality headsets.
“MBA students benefit from the sharing of insights by guest speakers; this widens their exposure to different career pathways,” says Enna Tan, head of the Career Centre for NUS Business School. “The students may gain a new interest in a career that they may not have considered previously, or become more determined in the path that they are now on.”
For many, an MBA is a way to gain new skills in the classroom and through experiential learning projects, which they can put into action in a new industry or function. Students have the opportunity to use their summer internships to experience new kinds of roles to determine if they are a fit for a role at graduation.
Lifelong career support
At NYU Stern School of Business in New York City, alumni also have lifelong access to career support ensuring that all MBA graduates can consider a career switch after graduation.
The school is seeing how technology is creating new opportunities across industries: more than 19 percent of the most recent graduating MBA class accepted full-time roles in the technology industry, as well as other industries where technology is transforming how work is done.
“What we are also seeing is increased interest among students in roles and organizations committed to social impact, from building a diverse and inclusive culture, to environmental and social governance,” says Beth Briggs, associate dean of Stern’s Careers Office.
Even so, it is still an area where salaries in general are well below the remuneration of the average strategy roles, points out Maria Obiols, the career services director at Esade.
One area where salaries have been exceptionally high is the financial services sector. But here, too, career paths are changing. “Venture capital firms are booming and have opened new career paths combining financial services skills with an entrepreneurial mindset,” says Obiols.
Also, the fintech sector is offering a wide range of new opportunities to disrupt the traditional banking industry by bringing technology to the center of their business models. “From blockchain, bitcoin, NFTs and metaverse, the fintech sector is creating new roles that are combining data analytics skills and business acumen,” she adds.