Strong Economy Boosts Appeal of One-Year MBAs

More applications are now sent to fast-track courses that maximize return on investment

The format of the MBA program is evolving to be more flexible than ever, as student preferences change. Demand for shorter MBA degrees has grown as prospective students explore more focused career paths and less costly ways to upgrade credentials.

According to the Graduate Management Admission Council, 47 percent of prospective students are considering a one-year MBA, the highest percentage for a decade. The strengthening economy has boosted the allure of fast-track programs, which provide a quicker return on investment and minimize lost income.

“We hear from students that time is critical, and they want to advance their career as quickly as possible,” says Katz Graduate School of Business associate dean Sara Moeller. “Students who enroll in full-time programs take a break from professional positions, foregoing pay and benefits. They are driven to complete their graduate studies quickly in order to return to their successful careers.”

The one-year MBA is a long-standing tradition at Katz. In 1963 it became the first US school to offer a 12-month option and has continued to run the program ever since. Last year, the Pittsburg-based school launched an 18-month MBA program for those who want the breadth of knowledge and the summer internship experience that is often lost on one-year courses.

“We recognize that many students want to graduate in less than two years and also value the opportunity for a summer internship,” says Moeller. “In fall 2021, we launched our 18-month Signature MBA, replacing the traditional two-year MBA.”

One-year MBA options: limited, but evolving

Shorter course options are limited, especially in the US where the preference is for a two-year degree. Two-year MBAs are better for career-changers because of the summer internship — a way to try your hand at a new job, and the traditional route into coveted roles in banking and consulting.

But Kellogg School of Management, in Illinois, has long believed that the MBA is not one-size fits all. It launched the one-year degree format in 1965. The program is structured to leverage prior academic experience and to allow students to move directly into the electives that are most meaningful to them. Students with undergraduate business degrees can skip over certain core courses and more quickly dive into relevant electives.

So the course tends to attract students who are laser-focused on advancing in their current industry or professional field. “One-year MBA students typically have strong clarity in their career goals and are using the MBA for career enhancement and acceleration rather than for a major career shift,” says Steve Thompson, senior director of full-time admissions at Kellogg.

Kellogg’s one-year students have the opportunity to develop a broader network by interacting with the traditional two-year cohort. “You have the intimacy associated with a small program but benefit from the network and resources of a larger one,” Thompson says.  This includes participation in Kellogg Worldwide Exploration Student Trips – overseas study trip taken before the MBA officially begins.

One-year MBAs: a more economical option?

Tuition cost is also substantially lower in one-year courses. “When the return on investment components are considered, along with the fact that one-year MBAs are recruited for the same jobs and salaries as two-year MBAs, the shorter program is a very attractive option for those with fitting backgrounds,” says Brian Mitchell, associate dean of full-time MBAs at Goizueta Business School in Altana, Georgia.

Candidates who are an excellent fit for the one-year degree will bring previous work experience with them into the course, which makes a summer internship less critical than someone who is switching careers.

“Understanding the fit is an important part of our evaluation process, and it should be an important part of the candidate’s approach as well,” says Mitchell. “We look for students who are seeking to accelerate their trajectory in roles that leverage their previous experience in addition to what they learn throughout the MBA program.”

He says the fact that shorter course options are few and far between is a function of history, as much as anything else. “The MBA degree in the US started in the two-year format, and the vast majority of business schools have remained with that model because of its history and success,” Mitchell says. “Summer internships in a two-year MBA program make that format especially attractive for career switchers, among others.”

And he says that many prospective students in the US are not aware of one-year MBA program options. “Even when learning about such programs, some prospective students may believe incorrectly that one-year programs do not offer the full MBA experience. At Goizueta, we have worked hard to ensure that’s not the case.”

Some industry watchers have suggested that it will become harder for business schools to attract students to longer degree formats given the hot job market. But Mitchell says high-quality MBA programs are going to remain attractive, regardless of the strength of the job market.

“We have seen this through a number of economic cycles, for as long as MBA programs have been around,” he adds. “Applications rise and fall to some extent, but the overall attractiveness of the MBA degree is consistent, as it remains among the most coveted graduate degrees in the US and around the world.”

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