As the coronavirus pandemic plunges the global economy into recession, prospective students are flocking to business school to boost their employability — signaling a recovery in the MBA market after years of declining demand.
A whole host of top business schools are reporting an applications bonanza for the class of 2022 starting this fall as the jobs market is roiled by coronavirus and so many once-comfortable managers face an uncertain future. In France and Singapore, Insead Business School has seen a 51 percent increase in MBA applications compared to the average of the past three years.
Demand for MBAs is counter cyclical, with a strong economy raising the opportunity cost of being out of the workforce. When the labor market sinks, the temptation to upgrade credentials and build a network in business school increases.
“MBA programs had been experiencing a downturn in applications over the last few years because the economy was doing so well,” says Shelly Heinrich, associate dean for MBA admissions at Georgetown University’s McDonough School of Business. “With economic uncertainty now, people want to go back to an MBA to ride out an economic recovery and increase their marketability.”
In Washington DC, McDonough has enjoyed an approximate 15 percent increase in applications to the MBA in 2020 compared to last year — partly the result of it achieving a STEM designation in late spring.
The designation gives overseas students an extra 24 months to work in the US through the Optional Practical Training (OPT) program. The OPT was spared in the Trump administration’s latest crackdown on immigration, but others in the business schools sector have warned that the government’s anti-immigration rhetoric is nonetheless discouraging international applicants.
Many schools worldwide are also concerned that coronavirus travel curbs and uncertainty will deter or prevent overseas students from showing up at the start of term, even if they have paid a deposit.
John-Paul Ferguson, academic director of the MBA at McGill’s Desautels Faculty of Management in Canada, says: “Students whom we’ve admitted, in some cases months ago, are still waiting for their official permission by the government to move to Canada. It is this, rather than the specific health situation, that is causing most of our delayed entries at this point.”
An increase in deferrals this year could increase the level of competitiveness for next year, with more people vying for fewer MBA places. Some schools including Harvard have suggested they will increase their class size for 2021 as a result.
Katelyn Rosa Stephenson, admissions director at the consultancy MBA Link, says this could cause a “trickle-down effect” with candidates unable to get into their first-choice institutions considering schools lower down the pecking order. “That tends to benefit programs that may not otherwise initially be top of mind for many, but that still have a compelling value proposition to offer,” she says.
At HEC Paris, the admissions office received record numbers of applications to the MBA program in March, April and May during the pandemic. Overall demand for the class starting this year is up by 10 percent compared with 2019.
And while many North American schools are concerned about enrolling overseas talent, HEC appears to have profited as Europeans are applying in their droves. “With travel restrictions and uncertainty, Europeans are realizing that they can choose a renowned international MBA program close to home rather than one in the US,” says Benoit Banchereau, executive director of communications, marketing and admissions.
But he warns: “The biggest obstacles for us are visas and travel constraints right now even though students are determined to come in September.”
Still, other European institutions like Insead are reporting vast increases in demand. “Business schools in Europe have observed a steady increase over the last few months,” says Virginie Fougea, global director of admissions, financial aid and scholarships. “Our marketing and recruitment teams have been very active even during the lockdown: we managed to reach out to many eager prospective applicants through virtual channels.”
But she adds it is too early to know how many students can travel outside their home country or obtain a student visa to enroll at Insead. The school is among several institutions such as Columbia and Kellogg that delayed or added deadlines to their application process later in spring to accommodate a surge in demand and even encouraged people to apply.
McGill’s Desautels school also extended its application deadlines and enjoyed an increase in applications from Canadian students in the late spring and summer. But overall demand for the course starting in September is down on last year because its admissions cycle began before the pandemic hit. With the economy now trending down, Ferguson expects an increase in applications next year.
The rebound in MBA demand is also down to schools waiving entrance requirements such as standardized tests like the GMAT and GRE. The pandemic shut down testing centers but even with online admissions exams installed, many schools extended test waivers and are seeing an increase in demand as a result.
At Georgetown the decision to waive exams was made as executives were furloughed or laid off because of the pandemic in the later admissions rounds and did not have time to prepare for exams that routinely take hundreds of swotting hours to achieve a good score.
Insead also decided to start evaluating applicants without a standardized test score. However, echoing his counterparts at other schools, Fougea says the overall quality of the applicant pool remains similar to previous years. “Applicants were putting more emphasis on their past academic achievements or highlighting other elements of their profiles to mitigate the temporary absence of a standardized test score,” she adds.
MBA Link’s Stephenson says prospective students should take care not to make admissions teams think they are defaulting into business school because they have no other options. “That’s definitely not the right reason to pursue an MBA and it’s not what they want to hear,” she says. “Clarifying your goals and how an MBA fits into your plan, then clearly articulating that is the best way to make a compelling case for admission.”