The release today of the annual GMAC employer survey report from the Graduate Management Admission Council (GMAC) means the time has come once again to read the tea leaves as far as what the year ahead promises for MBA grads and the job search. And the tea leaves look auspicious.
Globally, 86 percent of companies plan to hire recent MBA graduates this year—up from the 79 percent that hired them in 2016, according to the 2017 GMAC Corporate Recruiters Survey Report. In the United States and Asia-Pacific, demand is even stronger, with nine out of every 10 companies planning MBA hires in 2017.
Perhaps even more noteworthy, though, than these healthy anticipated hiring projections was the revelation that the majority (55 percent) of U.S. companies either plan to hire (28 percent) or are open to hiring (27 percent) international candidates, despite uncertainty around changes in H1-B visa protocol that could make such hires more difficult. That’s up from 49 percent that had such plans last year.
“This was by far the most surprising thing that emerged from the study,” says Gregg Schoenfeld, GMAC research director. “With all the talk in the U.S. about limiting international hiring, what we actually see is that companies are saying they still plan to hire MBAs and other business grads who require visas—they are not really shying away from this.” Shoenfeld speculates that this could be because not much has actually happened in the political realm to alter visa policy—it’s really been limited to rhetoric. “Companies are saying, ‘We need this group of people to fill our roles so we are going to take a wait-and-see approach about any potential changes and proceed with our hiring plans in the meantime.’”
U.S. Tech Firms Double Down on International Hires
In fact, the U.S. technology industry seems positively bullish on international hires—a full half of tech firms surveyed indicated plans to hire international candidates in 2017, almost double the 27 percent that said they planned to hire them last year. This marked jump could be related to the ability of international students in science, technology, engineering, or mathematics (STEM) to apply for a 24-month extension of the Optional Practical Training (OPT) employment authorization that follows their student F-1 visa, Schoenfeld suggests. “But it could also mean that in this time of political rhetoric firms are looking to see whether they have the technical skills they need domestically—or whether they really need to hire internationally to fill the roles they need to fill.”
A new survey question introduced this year also yielded interesting data on startups. In response to inquiries in prior years, GMAC added a question inviting responding employers to self-identify their type of company—be it Fortune 100 or 500, Fortune Global 100 or 500, startup, or family-owned. “We found some striking results,” says Schoenfeld. “The largest increase across the board in terms of hiring was reported by startups.”
In fact, hiring projections among Fortune firms, publicly traded firms, and larger firms were relatively flat year over year. But where startups were concerned, three out of four reported plans to hire MBAs and other business graduates this year—up from 52 percent last year. “That may say that these startups are moving beyond that start-up phase and looking to grow their businesses with the help of MBAs and other business graduates,” says Schoenfeld. More startups also plan to hire graduates of specialized master’s programs in 2017, including graduates of Master in Management (37 percent), Master of Accounting (23 percent), and Master of Finance (25 percent) programs.
Family businesses, too, saw an uptick in hiring projections, from 71 to 79 percent. As did small firms, with fewer than 100 employees. Of these firms, 66 percent plan to hire MBAs in 2017, up from 44 percent in 2016. Optimistic hiring projections were also found across a wide variety of industries, including consulting, energy, and finance. Nonprofits reported significantly greater appetite for MBAs, with 84 percent indicating plans to hire them this year, up from 67 percent last year. The significant increases among startups, family-owned businesses, and smaller businesses year over year suggest that the perceived value MBAs and other business graduates bring is spreading beyond traditional hirers like Fortune 500 and publicly traded companies.
“That coincides with what we find in our alumni studies as well,” Schoenfeld says. “Business school grads do go into a variety of types of companies. Business school isn’t a narrowly defined career path—there are various different paths graduates can and do follow.”
Of course, business grads do tend to be the main staple of large company hiring—and less the main staple for smaller companies, Schoenfeld notes. But the striking uptick in business graduate hiring among these smaller companies suggests an evolution may be taking place.
Larger, Multinational Firms More Likely to Be Open to International MBA Hires
By virtue of asking companies to self-identify by type this year, GMAC also gleaned greater insight into variation among different types of U.S. companies in terms of their willingness to hire international MBAs who require additional legal documentation. Larger companies are more likely to hire or be willing to hire international candidates (34 percent) in 2017, compared with 13 percent of small companies. Among startups, only seven percent indicated plans to hire international candidates, although 57 percent said they are willing to but do not have plans to do so this year.
Despite more companies reporting openness to international hires this year than last, a full 45 percent of U.S. firms have no plans to hire international candidates, which represents a greater share of employers than in other regions. Legal documentation and added expense associated with these hires were the most common reasons employers cited for not hiring foreign-born workers.
This helps explain why larger, multinational firms are more open to international hires than startups, Schoenfeld notes. “Larger, multinational firms have the ability to place international candidates in various locations around the world,” he says, which gives these companies greater maneuverability in the event that visas aren’t granted. “They also have the staff and resources to fill out those H1-B visa requests and go through that whole administrative process that the government requires,” he says. “In the startup community—where they don’t have those additional resource to go after the H1-B visas—we find they are looking more for domestic talent.”
Salaries—Largely Flat in U.S., Europe—Show Greater Gains in Latin America and Asia-Pacific
Salaries will remain flat at 2016 rates for the majority of European and U.S. companies (57 percent and 51 percent respectively), but 74 percent of Latin American companies and 59 percent of Asia-Pacific companies plan to increase MBA salaries at or above the rate of inflation. That means that globally, more than half of survey respondents (52 percent) report that MBA base salaries will increase at (34 percent) or above (18 percent) the rate of inflation in 2017.
In the United States, the projected median base starting salary for recent MBA grads in 2017 is $110,000, a $5,000 increase over 2016.
But the survey revealed that employers offer a number of benefits beyond salary—and that these benefits often vary from industry to industry. For example, 84 percent of respondents in the technology industry offer employees the ability to work from home. Healthcare/pharmaceutical and technology firms are the most likely to offer stock options, 51 and 55 percent respectively. Manufacturers, meanwhile, lead the pack in terms of offering education benefits, with 71 percent providing tuition reimbursement, scholarships, or professional or leadership development programs. Perhaps not surprisingly, nonprofit/government employers are the least likely to offer signing or other bonuses. But overall, 65 percent of U.S. companies plan to offer a signing bonus to recent MBA and business master’s graduates, with $15,500 being the median bonus offered. The vast majority of U.S. companies—92 percent—offer retirement savings plans—outpacing all other global regions.
Another New Question Reveals the Types of Roles Employers Are Seeking MBAs to Fill
“We added another new question this year to better understand what employers are looking for when they hire an MBA—are they seeking specialists or generalists, strategists or tacticians?” The results? A dichotomy, says Shoenfeld. Overall, employers tend to seek MBAs to fill strategic generalist roles (35 percent) or tactical specialist roles (30 percent), GMAC found. “Companies are either looking for a strategic generalist who will help them—with their broader-minded generalist skills—to advance the company forward into the future and plan the company’s direction,” says Schoenfeld. “But the next largest group was employers seeking to hire tactical specialists—these employers had specific roles they wanted to hire for.”
An additional interesting finding in this year’s survey was related to specialized MBA programs. “This was another question we added this year, so we don’t have historical data, but we were interested to learn that a quarter of employers globally said they would pay a premium for graduates of specialized MBA programs—that is, programs that offer a concentration in a particular field such as risk management; luxury brand management; aviation, oil, gas, and energy; engineering; or architecture. “We have heard a lot from the media and from schools that they are developing these specialized MBA programs, so we wanted to see what value employers placed on these programs.”
Business Master’s Graduates Also in High Demand
MBA grads aren’t the only ones sitting pretty this year, GMAC found. Employers also report a healthy appetite for graduates of specialized business master’s programs—especially Master in Management and Master of Accounting programs. Globally, 59 percent of employers plan to hire recent Master in Management grads—up from 50 percent last year. This is even more pronounced among manufacturing companies, where 70 percent report plans to hire Master in Management grads, also up from 50 percent last year.
“Outside the United States, Master in Management degrees are more readily available and known, but even in the U.S. there was a slight uptick in companies planning to hire those grads,” says Schoenfeld. “We see that as a positive for the Masters in Management. Companies are starting to understand what these programs are doing for students in terms of developing skills they can utilize in their businesses.”
Continuing a trend seen in recent years, data analytics expertise continues to be coveted. Nearly half of Fortune Global 100 employers plan to hire Master of Data Analytics (49 percent) and Master of Information Technology/Systems (47 percent) grads. After MBAs, these grads are the top talent sought by employers in the consulting, finance and accounting, and healthcare industries.
Graduates of specialized entrepreneurship master’s programs, meanwhile, are particularly attractive to startups and family-owned businesses, GMAC found. Eighteen percent of startups and 6 percent of family-owned businesses plan to hire from these programs, compared to between just 2 and 4 percent of Fortune 100, Global Fortune 100, and publicly traded companies.
Communication and Teamwork Skills Highly Sought by Employers
Returning to a question it had asked three or four years ago, GMAC again this year sought to understand which skills employers require of recent business graduate hires, finding that communication skills were deemed most important, followed by teamwork, technical skills, leadership skills, and managerial skills.
“It appears that companies expect a level of managerial and leadership skills from business school graduates, but what really will help students stand out are strong communication skills and the ability to work in teams,” says Schoenfeld. There is variation between industries in terms of which skills are considered most important, though. While communication skills are most important among most industries, manufacturing firms are most likely to be seeking leadership skills, whereas finance and accounting firms are laser-focused on candidates’ quantitative and qualitative analysis skills. “The slide we have about the top 10 skills employers seek by industry provides valuable details for schools to relate to their students. This should help career services centers guide students as they navigate the job market and understand which skills to really showcase during recruiting,” Schoenfeld notes.
MBA Internships Are Plentiful, High Likelihood of Converting to Full-Time Jobs
There are plenty of MBA internships to be had—with 65 percent of employers globally and 74 percent of U.S. employers planning to hire interns in 2017, GMAC found. This is less true for business master’s students, with only 27 percent of respondents globally and 24 percent of U.S. employers planning to offer internships to students in these programs.
Of the companies that offered internships in 2016, 90 percent hired at least one of those interns to continue on as a full-time employee. And in the United States, 56 percent of employers hired more than half of their MBA and other business master’s interns to full-time positions. As will likely come as no surprise to current students and applicants, large companies are more likely than smaller companies to hire interns. About half (51 percent) of companies with fewer than 100 employees plan to have MBA interns, as compared to 78 percent of companies with 10,000 or more employees planning to use interns. Large companies also are more likely than small companies to hire their interns full-time.
GMAC’s 16th annual Corporate Recruiters Survey was conducted in February and March 2017 with survey partners EFMD and MBA Career Services & Employer Alliance (MBA CSEA). Some 959 employers representing more than 628 companies in 51 countries around the globe took part.