An MBA has long been a proven way to accelerate a career and earnings — and the value that employers place on the degree has been crystalized this past year, with business schools reporting record high gains in employment and salary numbers amid a hot job market, especially in the US.
The MBA class at Georgetown University’s McDonough School of Business in Washington D.C. achieved record salaries after graduation this summer, with an average base salary of $138,552, up from $126,107 last year. The school’s 2022 employment report showed 96 percent of students received an offer within three months of graduation, equaling last year’s hiring records. Bonuses also rose 6 percent to $36,342.
The record-setting figures reflect the tightness in the labor market, with many more vacancies than employers can fill, despite a macroeconomic slowdown. “It has been a hot market for job seekers, and MBA graduates represent a strong pool of talent that can jump right in and make an immediate impact at their companies,” says the new associate dean and managing director of career services at Georgetown McDonough, Christine Murray.
“An MBA degree carries significant weight in the hiring process and organizations can expect strong returns on their investment with these candidates. Accordingly, many students are in the strong position of being able to choose the offer that best fits their interests and professional goals,” she adds.
Growing employment opportunities in consulting
When it comes to employment destinations, the school continues to witness growing opportunities in consulting. “After a period of relatively conservative hiring during the early part of the pandemic, consulting has rebounded as an industry with lots of opportunity and demand for talent,” Murray says. “The tight labor market has put a premium on people with intellectual agility, inclusive leadership, and critical thinking skills,” she adds.
Technology and financial services also saw significant gains in compensation with year-over-year mean starting salaries increasing by 11 percent and 8 percent, respectively. “We continue to see aggressive recruiting efforts from banks,” says Murray.
Georgetown is not the only business school reporting these employment trends. At New York University’s Stern School of Business, the MBA class of 2022 posted record-breaking employment outcomes, including base salary and total compensation, and job acceptance rates at pre-pandemic levels, demonstrating the value that employers continue to place on MBA graduates.
“Our top hiring industries remained consistent, with consulting, investment banking, and tech topping the list,” says Brian Ruggiero, NYU Stern associate dean of career services. The top hiring firms for the class of 2022 were Amazon, EY-Parthenon, and Boston Consulting Group.
A return to campus recruitment for employers
Anecdotally, Ruggiero says that while virtual recruiting will likely be a permanent practice moving forward, the vast majority employers have returned to recruit on campus this fall at pre-pandemic levels. This is another indicator that companies continue to make investments in MBA talent.
Over in California, the Berkeley Haas School of Business also reported big increases in job offers and acceptances as well as average base salaries last year. The average pay was $155,000 with bonuses at about $33,000. “The healthy salary increases were to attract MBA talent to companies during a tight labor market this past year,” says Abby Scott, executive director of MBA career management and corporate partnerships at Haas.
“In particular, our two largest sectors, consulting and technology, had average base salary increases that were significant year-over-year. Many of our top employers, including Amazon, Bain and McKinsey, hired more students in 2022 than they had in recent years prior,” she adds.
However, these employment reports are lagging indicators in the sense that they reflect the outcomes from those that graduated in the summer, and the economic conditions have changed markedly since then. Some large employers have announced layoffs, particularly in the tech industry. But despite soaring inflation and interest rates, unemployment remains low.
MBAs still valuable in a downturn
Business schools remain bullish for the year ahead. “We are continuing to see clear signs that employers value MBAs, even with the potential for a downturn,” Scott says. “We have heard that companies really value the skills an MBA brings, including the ability to lead in a dynamic and diverse environment.”
Stern’s Ruggiero agrees. “Overall, recruiting activity and employer feedback this fall show sustained strength in MBA hiring demand even amidst some slowdowns in industries like tech,” he says. “We’re continuing to keep a close eye on this, but feel good about what we are seeing and hearing from employers.”
Georgetown, too, has started to see some full-time hiring cooling in technology, though this industry had been hiring at a very rapid pace previously. “Across sectors, we believe that the MBA degree has withstood the test of time in recruiting and will continue to be a differentiating factor for candidates in the future,” Murray says.