MBA programs provide a great formal business education that can help graduates accelerate their careers in many different business industries. In fact, MBA employment reports published by the business schools often list hundreds of employers who have hired recent MBA graduates. However, a closer inspection of these reports reveal that four firms (McKinsey, BCG, Bain and Amazon) actually represent up to 30% of all jobs accepted by recent graduates at many leading MBA programs.
Job Concentration at Top MBA Programs
Business school finance faculty often highlight the benefit of diversification. For example, an investor can reduce volatility in their equity portfolio by holding more than 20 stocks across varied industries and geographies and by not having more than 5% of their equity investment allocation in any one stock. Applying this portfolio analogy to MBA career placement outcomes, a business school would have lower MBA graduate career placement volatility if its recent graduates joined at least 20 different companies across a range of industries with no more than 5% of graduates joining any one company. This way, the business school would mitigate the risk of an individual company or sector slowing down and scaling back MBA graduate hiring.
The reality is that jobs accepted by MBA graduates from top MBA programs are often concentrated in a small group of employers. Here is a chart showing the top ten employers by MBA program and their percentage of the total jobs accepted by the Class of 2022:
For five of these seven programs listed in the chart above, the top ten employers accounted for over 40% of the Class of 2022 jobs accepted. Furthermore, for five of these seven top MBA programs, over 26% of their MBA graduates are accepting jobs at just four companies: McKinsey, BCG, Bain and Amazon (MBBA). Here is a chart showing the MBBA percent jobs accepted at five leading MBA programs over the last five years:
As shown in the chart above, there is a general trend towards increasing concentration in MBBA jobs accepted among recent graduates for these top MBA programs. Kellogg and Booth have seen their concentration of MBBA jobs accepted increase from over 20% in the Class of 2018 to over 30% in the Class of 2022. Meanwhile, Sloan has maintained a MBBA concentration around 30% in four of the last five years. Ross has grown its MBBA concentration from 24% in the Class of 2018 to over 26% in the Class of 2022 while Fuqua has rapidly grown its MBBA jobs accepted concentration from 15% in the Class of 2018 to over 26% in the Class of 2022. While CBS has traditionally had a 15% concentration in MBBA jobs accepted, they have increased to 20% in the Class of 2022. In contrast, Stern’s MBBA percentage is relatively low and has only increased slightly to 17% in the Class of 2022. The fact that the MBBA firms have increased their hiring from many top MBA programs is a positive sign that these firms are growing and that they value the quality of the MBA talent graduating from these programs.
We can see this trend in more detail by looking at job acceptance concentration by firm at each of these seven MBA programs.
Kellogg has seen its MBBA job acceptance concentration grow from 21% in the Class of 2018 to 36% in the Class of 2022. Having said this, the growth is somewhat evenly distributed across the four firms. For example, McKinsey and BCG each get over 10% of the Class of 2022 jobs accepted, while Bain and Amazon have 8% and 7.7%, respectively.
Similar to Kellogg, Booth also saw an increase in MBBA jobs accepted from 22% in the Class of 2018 to 30.5% in the Class of 2022. In addition, McKinsey (11.3%) and BCG (9.9%) accounted for 21% of the jobs accepted for Booth Class of 2022 graduates accepting jobs. Unlike Kellogg, Booth has less concentration in Class of 2022 jobs accepted at Bain (5.2%) and Amazon (4.1%).
Unlike Kellogg and Booth, Sloan has been concentrated in MBBA jobs accepted throughout the last 5 years. In fact, Sloan’s MBBA job acceptance concentration has been around 30% for four of the last five graduating classes. In addition, Sloan is more concentrated in BCG jobs which take up almost 50% of their MBBA job concentration. For example, in the Sloan Class of 2022, BCG jobs represent 14% of total jobs accepted. In fact, Sloan has had this high concentration in BCG jobs for at least the last four years. Clearly there are deep and longstanding ties between these two Boston-Cambridge based institutions.
While Ross has consistently maintained a MBBA job acceptance concentration of over 21% in each of the last five years, the MBBA jobs accepted composition has changed. In particular, over the past five years, Amazon has reduced its percentage of Ross hires from 13% to 5.6% of jobs accepted while the MBB firms have increased their percentage. In the Ross Class of 2022, McKinsey accounts for 8.2% of the jobs accepted while BCG, Bain and Amazon account for 5.6%, 6.4% and 5.6% of jobs accepted.
Similar to Kellogg, Fuqua has seen a rapid growth in MBBA jobs accepted, increasing from 15% of jobs accepted in the Class of 2018 to over 26% of jobs accepted in the Class of 2022. Similar to Sloan, Fuqua is concentrated in BCG jobs accepted (12.5%), which represents about half of Fuqua’s 26% MBBA job concentration in the Class of 2022.
Unlike the other programs discussed, CBS is relatively less concentrated in MBBA jobs accepted. CBS’s concentration did increase from 15% in the Class of 2021 to 19.5% in the Class of 2022. For the CBS Class of 2022, McKinsey (8%) has the highest concentration, followed by BCG with 5% of the jobs accepted.
Similar to CBS, NYU Stern is less concentrated in MBBA jobs. In addition, Stern has only seen a slight increase in MBBA job concentration. Furthermore, the Class of 2022 jobs accepted are relatively balanced across the four MBBA firms: McKinsey (4.1%), BCG (4.5%), Bain (3.1%) and Amazon (5.4%).
Why Is This MBB & Amazon Jobs Concentration Happening at Top MBA Programs?
A confluence of individual factors across several years has likely caused this job concentration to occur. First, McKinsey, BCG, Bain and Amazon are growing companies who need to increase staffing in order to meet demand for delivering their products and services. Given their success in sourcing top talent from top MBA programs, it makes sense that these companies would seek to recruit even more MBA graduates from these MBA programs. Second, many individual MBA students would love to work at these four companies due to the prestige of these firms and the career opportunities that they provide. And third, top MBA programs value the benefits of placing so many graduates in great jobs at these prestigious firms and often highlight this information in career reports to market the MBA program to prospective MBA applicants. In fact, a number of MBA applicants decide to enroll at top MBA programs in order to gain access to jobs at these top consulting firms and tech companies.
It is also interesting to note that the MBBA job concentration is not always readily apparent when reading the MBA employment reports. In the employment reports, business schools often include a long list of employers hiring recent MBA graduates. For example, here is a snapshot from the CBS Class of 2022 employment report showing a partial list of the employers that hired CBS Class of 2022 graduates. The CBS employer list is actually two pages long and includes the names of over 400 firms hiring at least one CBS Class of 2022 graduate:
Based on a quick glance of this list, it is easy for MBA applicants to assume that CBS Class of 2022 employment is diversified across several hundred firms. While it is true that a large range of firms hire at least one CBS graduate, the reality is that 20% of jobs accepted by CBS Class of 2022 graduates are actually concentrated in just four firms.
What Can Be Done to Manage This MBB & Amazon Jobs Concentration Risk?
This concentration in MBBA jobs presents a challenge to top business schools and MBA students. For business schools, the challenge is acutely felt by the MBA career placement officers because they want to be responsive to the individual needs of MBA students seeking jobs and MBA recruiters seeking students. In addition, the career office knows that placing a lot of MBA graduates in prestigious firms helps to reinforce the brand of the MBA program. After all, what better way to signal a quality outcome than to show high job placement in prestigious firms? In addition, there are economies of scale for maintaining a relationship with one recruiter who hires 20 students vs. managing relationships with 20 recruiters who hire one student each.
On the other hand, this concentration in MBBA job placement also creates risk for career placement officials. For example, in the event of an economic downturn that impacts MBBA recruiting, the career office will need to scramble to help MBA students find employment in other sectors. Since the job market can change quickly, this can lead to disappointment with MBA graduates who happen to graduate in a recession. Thus, career offices maintain relationships with a broad range of employers in case MBBA job hiring dries up.
Similarly, MBA students who are seeking jobs at big consulting firms or big tech companies may need to be flexible and expand their target list of potential employers if the MBBA firms suddenly cut back on hiring.
For MBA applicants, while it is helpful to read career reports and hear about all of the prestigious jobs accepted by current MBA students, it is also good to remember that sometimes the economy slows down and jobs are harder to come by. Thus, it is prudent for MBA applicants to have a backup plan in terms of recruiting in case their target post-MBA firm reduces their MBA hiring in the future.
In summary, it is quite impressive that the top MBA programs are very successful at placing their graduates into jobs at top tier firms. Having said this, current MBA applicants and students should be mindful that this success in career placement often leads to job concentration in a few top firms, which can make career placement vulnerable during an economic downturn. To help mitigate this risk, everyone should keep an open mind about career placement and have a Plan B list of target firms in the event that jobs at the top firms suddenly dry up.