2015 Topmba.com Jobs Salary Trends Report v1
Content
2014/15
QS TopMBA.com Jobs & Salary Trends
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Nunzio Quacquarelli (MA Cambridge, MBA Wharton) Follow us Susan Gatuguta Gitau (BSc USIU - Africa, MA Nottingham University Business School)
Contents
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Introduction
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Who will be interested in the survey?
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Methodology and Scope
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Summary of Key MBA Hiring Trends in 2014
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Summary of Key MBA Salary Trends in 2014
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Demographics & Sample of MBA Employer Respondents
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Long-term trends in MBA Jobs 1990-2014
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Demand for MBAs Around the World in 2014/15
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5.1.1.MBA Jobs Trends in USA & Canada
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5.1.2.MBA Jobs Trends in Latin America
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5.1.3.MBA Jobs Trends in Western Europe
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5.1.4.MBA Jobs Trends in Eastern Europe
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5.1.5.MBA Jobs Trends in Asia-Pacific
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5.1.6.MBA Jobs Trends in Middle East & Africa
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MBA Jobs by Sector in 2014 and Forecast for 2015
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5.2.1.MBA Jobs in Consulting
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5.2.2.MBA Jobs in Financial Services
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5.2.3.MBA Jobs in Technology & Telecoms
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5.2.4.MBA Jobs in General Industry
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5.2.5.MBA Jobs in Pharmaceuticals & Healthcare Functional Roles on Offer to MBAs
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Preferred MBA Experience Levels
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Key MBA Skills
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MBA Salaries and Compensation
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Overview of Regional MBA Compensation in 2014
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Comparing MBA Salaries in North America and Western Europe
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1999-2014 MBA Salaries and Bonuses by Industry Sector in 2014
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Regional Review of MBA Salaries & Bonuses in 2014
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6.4.1.USA & Canada
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6.4.2.Latin America
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6.4.3.Western Europe
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6.4.4.Central Europe
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6.4.5.Asia-Pacific
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Introduction The MBA (Master of Business Administration) Administration) is a graduate management degree that prepares prepares professionals for management responsibility. It is one of the best-known degrees in the world, with more people taking it than any other postgraduate course. Deciding to take an MBA is a crucial step in an individual’s career.
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Since 1990, the QS Intelligence Unit, in collaboration with TopMBA.com, has conducted an annual survey of MBA employers worldwide to determine trends in international salaries and recruitment. QS is proud to produce the longest established, geographically broadest and most comprehensive global review review of MBA jobs and salary trends. The 2014 International Employer Survey is as extensive as ever and presents an unrivalled overview of the world MBA recruitment market. For the purpose of this report, responses were received from 5,669 (4,318*) respondents from companies in 54 (39) countries, actively recruiting MBAs** over a three-year period, with 1,632 brand new respondents in 2014. This represents approximately approximately four times the response of the GMAC MBA MB A Employer Survey and approximately appro ximately ten times the response level of the Bloomberg Businessweek MBA Employer Survey. The 2014 QS International Employer Survey was conducted between March and July 2014. * Comparative gures for 2013 are shown in brackets throughout the report * * QS Global Employer Survey also collects responses from companies seeking to hire masters and undergraduate level students. In total 28,759 employer respondents contributed to our reports in 2014.
Who will be interested in the survey? This research will be of interest i nterest to all who follow the international MBA recruitment market. It will help three groups in particular par ticular to make informed strategic decisions: ~ Companies
and agencies that recruit MBAs
• National and international recruiters will nd the survey useful in managing human resource policies, such as whether to determine salaries globally or locally, and whether to benchmark their salaries against peer institutions. ~ Business
school administrators and career services ofces worldwide
• MBA program administrators and career services professionals will nd the survey valuable for providing guidance to students and managing relationships with recruiters. ~ Current
and future MBA graduates
• MBAs can use the research to determine which industries and geographies to pursue in their MBA MB A job search, and and to help negotiate an optimum compensation package.
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About the Contributors ~
Editor - Nunzio Quacquarelli is founder director oforld QS Quacquarelli Symonds Ltd, publishers publisher s of TopMBA TopMBA.com .comand andmanaging o rganizers organize rs o f QS World of W MBA Tour. Tour. Nunzio has an MA from the University of Cambridge as well as an MBA from the Wharton School and has been responsible for publication of the QS TopMBA.com Jobs & Salary Trends Report since 1990. 5
~ Analyst
– Susan Gatuguta Gitau is a research analyst and member of the QS Intelligence Unit. Susan has an MA in Corporate Strategy and Governance from the University of Nottingham.
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Methodology and Scope The QS TopMBA.com International Employer Survey, from the QS Intelligence Unit, collects primary data on the state of the recruitment market and predictions of future trends from recruiters in general industry, consulting, nancial services and technology.
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QS obtains information directly from the employers who hire MBA graduates, offering unique up-to-date insights into salary and MBA job trends around the world. Each respondent is designated as being responsible for MBA recruiting within his or her company company,, whether as a whole or in a division.They are asked to identify their geographical responsibilities, conrming whether they t hey recruit locally, lo cally, regionall regionallyy or globally. global ly.The data includes i ncludes specic s pecic analyses analy ses by sector sect or,, geography and year. Time trend analysis as well as sector and regional variations have been incorporated into this nal report. As the demand for MBAs MB As grows around the world, it is increasingly important to differentiate between local MBA employers who seek MBAs purely from local institutions, versus employers with an international recruitment mandate seeking MBAs from a top-tier of up to 200 global business schools. In particular, throughout the report, we seek to distinguish salaries offered by local employers versus offers made by international employers. QS produces a separate report – World Business Schools Rankings – Full-time MBA – that identies the institutions most sought after by international MBA MB A employers. QS TopMBA.com also collects data directly from business schools which report average salaries achieved by graduating students; this data is included in section six for comparison with the data reported by employers. QS further differentiates its research by the objectivity of its position as a third party,operating between recruiters and business schools. Our long established contacts with recruiters who share their information with QS, and the bank of data on MBA recruitment and remuneration built up by QS over the last 20 years, allow meaningful trends to be identied over time. QS operates the website www.global-workplace.com which provides career opportunities and networking facilities exclusively for member business schools. Over 100 business schools and 1,000 employers subscribe to QS Global-Workplace. Global-Workplace.
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1. Summary of Key MBA Hiring Trends Trends in 2014 Each year, QS continues to conduct the largest survey of employers worldwide, with 5,669 (4,318) MBA employer respondents contributing to this year’s report, including 1,631 brand new respondents, from a total of 35,000 (27,000) respondents globally to our Global Employer Surveys. The QS TopMBA.com Jobs Index shows an overall 8% increase in MBA job opportunities in 2014, a drop from the 14% growth experienced in 2013, but still very favourable compared to OECD GDP growth.
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With employers forecasting 12% growth in MBA demand in 2015, we are perhaps seeing the emergence of a mature qualication with a long-term growth rate likely to swing between 6-12%, rather than the phenomenal phen omenal 15% 15 % average growth reported report ed by QS TopMBA since s ince 1990. Since 1990, the the MBA qualication has played a central role in the globalisation of business, with export oriented companies in Western and emerging markets fuelling worldwide demand growth for MBAs.
MBAs = Mobile, Mobile, Bright Bright,, Ambi Ambitious tious 15% = Average Growth in MBA Demand Worldwide 1990 – 2012 10% = Average Growth in MBA Demand Worldwide 2013-15e
1.1. Summary of Key MBA Recruiting Trends By Region: ~
NORTH AMERIC AMERICA A - The QS Q S TopMBA.co opMBA.com m report repor t highlights high lights that across North America MBA demand has jumped 10% in 2014, in line with our forecast from last year’s report. report. It seems that as condence in economic recovery recov ery arrives in i n North America, we are seeing renewed demand for MBA graduates from globally oriented and local employers.
~ WESTERN
EUROPE - The story in Western Europe is one of a lag lag in recovery of MBA demand, with 0% reported net growth in MBA demand in recovery 2014. Growth in demand in Switzerland (15%), (15%) , Germany (9%), Belgiu Belgium m (9%), France (6%) and the UK (5%) has buoyed the region. Northern European MBA demand has been offset by continued declines in Southern Europe, especially in Italy (-27%) and Spain (-1%). (-1%) . However there is some good news for Europe’s Europe’s MBAs. Growth across Europe is forecast to accelerate in 2015, with Italian and Spanish employers leading the way with a projected 15% and 7% growth in demand in 2015 respectively.
~ CENTRAL
EUROPE - Central European employers employers reported gro g rowth wth of 10% in 2014, not quite the dramatic increase we forecast in last year’s report, but but still a respectable gure. The growth gures are boosted by global companies expanding operations in Central Europe, with Russia and Kazakhstan reporting 19% and 18% growth in MBA demand respectively. There is a growing appetite for Western
educated MBAs to return home after their MBA to local/regional employers.
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~ ASIA
– After several boom years, demand for MBAs in Asia is settling at a sustainable rate of 11% per year . In recent years, the MBA qualication qualicatio n has been embraced by Asian employers, particularly particularly in India and China, where where demand is growing in consulting and professional services, manufacturing, IT/computer services, ser vices, nance and micro-nance. Since 2011, India has been vying with the USA to be the largest MBA job market and there is no sign of this trend reversing with forecast
growth of 8% in 2015. ~
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MIDDLE EAST - From a small base, MBA demand has grown rapidly rapidly in recent years and it is not surprising that growt growth h rates have settled down to just 2% in 2014. Growth has centered on the recovery in the United Arab Emirates and Saudi Arabia. Arabia. Parts Parts of Africa are reporting optimism for 2015 MBA MB A demand in sectors like energy, mining, consulting and nance. Demand is forecast to jump by 12% in 2015.
~ LA LATIN TIN
AMERICA AME RICA - MBA demand in Latin America has become much more plentiful in recent years amongst local employers and this trend is continuing, albeit at a more sustainable growth rate of 7% in 2014 after a year of 10% growth in 2013. Employers in the region are utilising MBAs MB As as a key talent pool as companies battle to internationalize across the region. Brazil, Argentina and Mexico continue to be the engines of MBA growth in the region.
By Sector: ~ ENERGY – Although
relativelyy small by volume, but very attractive to MBAs, relativel the large energy companies hav have e reported 18% growth in MBA MB A demand in 2014, supplemented by many smaller companies operating in renewable energy elds.
~ TECHNOLOGY –The
big story in 2014 is the spread of demand amongst global technology companies, which are now recruiting in almost every region of the world. Top technology rms such as Amazon and Apple feature prominently in rankings of popular MBA employers as multinationals spread their reach to recruit MBAs from a growing number of business schools all around the world, in large numbers. Miriam Park, who heads up Amazon’s MBA recruiting team, says, “We love MBAs because they’re strong analytical thinkers and problem solvers. They are a strong pipeline of leadership talent for the long-term.” long-term.” Other technology companies are responding in kind with several expanding (or establishing for the rst time) large global MBA recruitment programs. High tech/electronics companies report 11% growth in demand in 2014. IT/computer IT/computer services report 8% growth whilst telecoms report 7% growth.
~
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CONSULTING – Since 1990 there has been a six-fold increase in the number of MBAs MB As recruited annually by the consulting sector. sector. The global expansion of this industry and the demand for MBAs have have gone hand in hand. Consulting and professional services report a 9% demand growth in 2014 continuing this longstanding pattern, albeit albeit at a slower rate than previous years. Consulting is a bellwether of the health of the MBA and the sector is forecasting 8% growth in 2015.
~ MEDIA –
Media & Entertainment has traditionally been a small sector in terms of MBA demand but 2014 has been the best year for MBA hiring since the dotcom boom, with 11% growth reported. The spread of broadband is fuelling the demand amongst traditional media companies looking to digitise their products and also amongst many smaller companies seeking to become new media giants. Facebook and LinkedIn are the biggest brands embracing MBAs, but the list of hiring companies is extensive.
~ MANUFACTURING
& FAST MOVING CONSUMER GOODS – Though not seen as typical MBA MB A recruiters, there are a growing number of local and national players play ers who seek MBAs M BAs (salaries tend to be below average). Consumer goods is reporting 12% growth in 2014, whilst manufacturing manufacturing is reporting 10% growth and the numbers being hired are signicant, si gnicant, especially in emerging markets.
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~ PHARMACEUTICALS
& HEALTHCARE – This industry is dominated by global players, many of which have run global MBA hiring schemes for many years. After a bit of a lull, their appetite for MBAs seems to be resuming with 9% growth in demand in 2014.
~ FINANCIAL
– Traditionally Traditionally the nancial services industry has SERVICES – SERVICES accounted for about one third of MBA MB A demand. Since the nancial crisis this sector has undergone signicant regulatory and structural change, which has slowed hiring patterns, especially in the USA and Western Europe. In 2014 we are seeing some recovery recov ery in i n demand growth for MBAs MB As in nancial services, especially in Latin America, but also in North America and parts of Europe. However, this has been offset by a slowdown in demand for MBAs in this sector in parts of the Middle East and Southern Europe. The result is an overall growth of just 7%, which perhaps hides an underlying recovery story.The forecast for 2015 is 5% growth but if the North American recovery carries on apace, there could be rapid re-evaluation of hiring needs.
By Employer Requirements: The MBA recruitment market is probably the most globally exible recruitment market of any profession, with employers willing to embrace career changers and targeting an incredible
breadth of nationalities skill sets. Ourpreferably 2014 research reveals that employers to seek more experiencedand MBA candidates, with international experience,continue combined with strong interpersonal and ‘soft’ skills. Employers also are increasingly willing to look internationally to nd the right talent. ~ In
2014, we identify that more MBA employers are recruiting on a panregional or global basis, rather than on a purely domestic basis.
• Despite only 19% of respondents focusing on global recruiting compared to 32% last year, it is not that North American employers have withdrawn from global MBA hiring. Rather, we have seen a big increase in the numbers of domesticonly recruiters returning to MBA MB A hiring in 2014, reecting the growing strength and condence in the US economy. economy. Amongst North Nor th American recruiters 63% focus purely on national recruiting whilst 13% are localised in their search. Not surprisingly,, Asia is the next biggest source region for these employers as the surprisingly
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technology industry witnesses a revival. • European recruiters are more globally minded than their North Nor th American American counterparts with 36% recruiting globally, up 14% from 2013, and 20% recruiting across Europe, down from 29% last year. Nonetheless, close to 50% are recruiting Central Europeans in particular. Between 24% and 34% of European employers are also very actively looking for North Americans, Asians and Latin Americans. • Amongst Middle Eastern employers, 95% are targeting local or domestic MBAs, MB As, while 41% are targeting European MBAs. Demand for MBAs across all regions has increased in comparison to last year. • Fewer Asia-Pacic employers are targeting local or domestic MBAs down 7% from 2013. In spite of this decline, 83% 83% of their recruitment activities are based in Asia-Pacic while 36% are targeting MBAs in North America and 28% are targeting MBAs in Western Europe. However, a greater proportion is targeting Central & Eastern European candidates (34%).
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• Latin American employers are locally focused with 97% targeting their domestic and local MBAs. MB As. In 2014, 15% of Latin American recruiters expressed an interest in Western European MBAs, up from 10% last l ast year. ~
Business school graduates are still not meeting expectations in terms of their soft skills including communication, interpersonal and strategic thinking skills, which are highly sought after. Soft skills are far and away away the most important skills employers are looking for from new MBA MB A recruits. Communications, interpersonal, strategic strategic thinking and leadership skills make up four of the ve most important impor tant skills for new hires to possess. Relevant Relevant work experience is the fth criteria.
~ Employ Employers ers
are broadly satised with the technical skills acquired by MBA students, and this result seems to be independent of which business schools employers target. This refers to academic achievement, computer skills, languages and skills acquired in nance, marketing, e-business, and risk management.
~ International
study experience is sought by 67% of MBA employers. Recruiters strongly agree that screening for language skills and inter inter-cultural -cultural
communication is an important of the hiring process for international MBAs. The type skills and duration of studypart experience i s also is important. They most signicantly agree that candidates with international experience outperform those without. ~ There
was a big increase in demand for MBAs with more than ve years of work experience in 2014, with 29% of employers preferring this group compared to just 24% in 2013.
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~ In
recent years there has been a steady drop in employer employer demand for MBAs with less than three years of experience and especially for MBAs with less than one year year of work experience. This trend has continued in 2014 – 33.6 % in 2014 compared to 35% in 2013. Demand for young and preexperienced MBAs is low in Western Western Europe and Latin America – in both these regions there is an above-average above-average demand for MBAs with 5 to 8 years of work experience. By contrast, Asia-Pacic employers are much more willing to recruit younger MBAs with 0 to 3 years’ experience.
~ Some
signicant changes have appeared in the functions offered to MBAs in 2014. Business development and marketing are the two most popular functions on offer, overtaking general management, nance (other) and consulting.
~
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The favorite MBA majors/study specializations amongst employers are strategy and leadership, whilst business innovation innovation has been growing in popularity in recent years and years and has caught up with nance.
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2. Summary of Key MBA Salary Trends Trends in 2014 Overall MBA salaries have increased 4% on average in the mature North American and Western European markets for the rst time in several years, with an average salary of
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$94,200, whilst average MBA compensation in North America (including bonuses) is up a whopping 15% to $128,600. With evidence of MBA demand picking up steadily in North America as well as in several European markets, markets, we we continue to predict that MBA salaries are likely to increase again in 2015 in these regions. At the elite end of the MBA hiring market we see salaries between $110,000 and $150,000 as the norm in North America America and Europe. The QS TopMBA.com Jobs & Salary Trends Report provides the rst view of MBA compensation trends in 2014 based on our survey of 5,669 actively hiring MBA recruiters, including 1,632 new respondents. ~
Average total compensation offered by MBA employers in North America increased Average by 15% to $128,600 ($112,200), with salaries of $97,700 and bonus of $30,900.
~ Total
compensation offered by MBA employers in Western Europe grew by 3% to $112,600 ($109,100). By By contrast, total compensation for MBAs in Central & Eastern Europe is $72,700, up 6%.
~ Total
compensation offered by MBA employers in Asia-Pacic Asia-Pacic actually fell by 2% to $86,000 after several years of strong growth. MBA salaries in the region remained roughly at at $68,000 with bonuses being cut back.
~ Total
MBA compensation in Latin America, at $71,400, and Middle East, at $70,300, were both slightly down in 2014, compared to 2013. This can be explained by increases in the numbers of local employers in sectors like consumer goods and manufacturing, which typically offer below- average salaries. Salaries offered by international employers in these regions were at.
When comparing salaries and compensation by country, QS looks only at responses from domestic employers: The top ten countries in terms of average domestic MBA compensation in 2014 are: Switzerland ($ 122,000),Germany ($122,000) ,Austral Australia ia ($89,800), ($115, 600),Spain ($115,600), Denmark ($112,000 ($112,000), UK ($98,000), ($98,0 00), USA ($93,200), France ($89,800), ($83,100), Japan),($83,000), and Canada ($87,500). Ten years ago an MBA was effectively a passport into a career in strategy consulting and investment banking with salaries as much as 50% higher than those in other sectors. These sectors still pay well, but they are no longer the top-paying sectors as they were in the past.
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~
Metals & Mining Among all employers in Europe and North Nor th America, America, the highest paying sector in 2014 remains metals & mining, offering an average MBA salary of $134,250 ($139,000).
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Energy – This sector has seen a surge in employment demand in 2014, jumping into the No. 2 spot for average salaries on offer, at $107,000.
~ Pharmaceuticals –
Dominated by multinationals, pharmaceuticals have dropped from the top spot in 2012 to No. 3 in 2014, with an average average MBA salary salar y of $99,200 ($100,300).
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Construction/ Property – Coming in at No. 4 is the construction/property sector, with average salaries of $98,350 ($97,200).
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Financial Services – Services – With an average salary of $95,050, $ 95,050, nancial services ranked No. 5 overall, although bonuses in this sector can often be quite large, with total compensation often exceeding $200,000.
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~ High Tech/Ele Tech/Electronics ctronics – The
boom in demand in high tech and electronics companies raised the average salary to $94,950, with the sector placing sixth overall
– ~ Consulting Consulting –
Global strategy consulting rms offer salaries between US$110,000 and $160,000 in Europe and the USA, but there are a large and growing number of small and niche consulting rms recruiting locally, resulting in an avera average ge reported
salary of just $88,250 ($89,150) across the sector. sector. ~ The
lowest average MBA salaries are offered in retail, utilities, law, transportation, travel & hospitality and the public sector all all below $80,000 per year.
As more employers compete in the global market for top MBA talent, we observe a longerterm trend toward equalization of MBA salaries across regions (this trend has been on-going for over a decade).Western European and North American salaries remain very similar overall and across most industries.The gap between the highest-paying region (North America) and the lowest (Latin America) narrowed to only 30% in 2013, compared to 50% a decade ago. However, with upward pressure on US salaries in 2014 this gap has widened once again to almost 40%.
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3. Demographics & Sample of MBA Employer Respondents The 28,759 employers responding to the QS Global Employer Surveys between 2012 and 2014 include 5,669 who were actively recruiting recruiting MBAs, whilst the remainder were recruiting only undergraduates or Masters students. All employers that responded to the survey are guaranteed condentiality for the components of their individual responses, except for any open-ended feedback they have have chosen to provide, on the value of an MBA MB A or concerns with MBA hires. 14
Chart: Regional Breakdown of MBA Employer Respondents
Africa & Middle East
19%
13% Asia Pacic
Eastern Europe
14%
30% Latin America
US & Canada
18% 6%
Western Europe
Responses were received from employers across the globe, with 19% of employer respondents based in Western Europe, 14% in North America, 30% in Asia-Pacic, 6% in Eastern Europe, 13% in Middle East and Africa, 18% (of which the majority m ajority were hiring locally) in Latin America. Among respondents in Asia-Pacic, 12% were employers in Australia and New Zealand. This breadth of response provides provides detailed insights into MBA MB A recruiting patterns across the globe.
Chart: Employer Response by Size 2014 Less than 50 staff
22.1%
21.9%
22.4%
17.6%
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Between 50 and 250 staff
56.0%
23.1%
16.4%
54.5%
66.0%
Over 250 staff
2012
2013
2014
In 2014, a higher proportion of respondents worldwide was made up of large companies with over 250 employees. This points towards a potential shift in the MBA recruitment market from small consulting and nancial services rms to larger industry play players. ers.
Chart: Employer Response by Industry 2014 15
200
400
600
800
1000
Aerospace / Defence Construction / Property Consulting / Professional Services Electronics / High Technology Energy Consumer Goods Financial Services / Banking IT / Computer Services Law Manufacturing / Engineering Media / Entertainment & Arts Metals / Minig Pharmaceuticals / Biotech & Healthcare Public Sector / Govt. / Non-prot
Recruitment / HR service Retail Telecoms Transprtation / Distribution Travel / Leisure / Hospitality Utilities Other Eduction
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Consulting and professional services was the largest responding sector in 2013 and once again in 2014. Banking and nancial services was the second largest responding sector, followed by manufacturing and engineering, which displaced HR/recruitment services from third place. IT, consumer goods and pharmaceuticals were also extremely well represented in the sample. Companies select their own industry denition and the other category is made up of respondents across all sectors who felt their companies did not quite t the narrow industry denitions provided provided..
Table: Sample of Responding Employers by Region 2014 The following table gives a snapshot of some of the organizations that took part par t in the survey sur vey across the world all of which are recruiting 25 or more MBAs in 2014.A more comprehensive list can be found in the appendix at the end of this document.
Consulting
Finance
Industr y
Technology
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Asia
Europ e
US & Canada
Latin America
Beijing Consulting Group
AT Kearney
Booz Allen Hamiliton
Accenture
Grant Thornton LLP Ernst & Young
Bain & Company BCG
Deloitte Ernst & Young
Deloitte KPMG
IBM
PwC
Towers Watson
PwC
Commonwealth Bank
AXA
American Express
Banco Santander
Citibank
Bloomberg
BlackRock
Bancolombia
Nomura
BNP Paribas
Citibank
BBVA Continental
OCBC Bank
Deutsche Bank
ING
HSBC
Air Liquide
Abbott
3M
Colgate Palmolive
Alstom
Alstom
Best Buy
Daimler
Baxter
Bayer
ConAgra Foods
Exxon
Bombardier
Boehringer
DHL
Hitachi
Alcatel-Lucent
Brightstar Corporation
Hewlett-Packard
Microsoft
Apple
Atos
LG Electronics
Avaya
Oracle
BlackBerr y
Tata
Microsoft
Microsoft
MercadoLibre
Merk
4. Long-term trends in MBA Jobs 1990-2014 Since 1990, QS has conducted the largest survey of MBA employers worldwide – the only available long-term study of global MBA employment demand. MBAs = Mobile, Mobile, Bright Bright,, Ambi Ambitious tious Average Aver age 15% Gro Growth wth in Deman Demandd Worldw orldwide ide 1990 1990 – 2011 2011 (see (see chart) chart) Average Aver age 10% Gro Growth wth in Dema Demand nd World orldwide wide 2012– 2012– 2015 2015ee (see (see chart)
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The MBA qualication has proven to be probably the most recession-proof postgraduate degree since the nancial crisis in 2008. Despite all the shocks to the nancial system and despite contraction in nancial services, MBA graduates have been successfully nding wellpaid jobs in diverse sectors all around the world. Since the nancial crisis, MBA employer demand contracted only slightly in 2009 and 2010 but had a stellar year of over 25% growth in 2011, fuelled by a boom in demand in emerging markets. Since 2012, we have seen steadier growth, slightly below the long-term growth rate of 15%.
With the on-going economic recovery, North America and Europe will see renewed demand for MBA graduates. This, combined with steady demand growth in emerging markets, suggests that we are perhaps seeing the emergence of a mature qualication where the long-term growth rate is likely to swing between 6 and 12% per year, rather than the phenomenal 15% average growth reported by QS TopMBA since 1990, as shown in the chart below.
Chart: Index of MBA Recruitment 1990-2015e (Year 2000 = 1) Industry
Consulting
Finance
Technology
4.00
3.50
3.00 2.50
2.00
1.50
1.00
0.50
0.00 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: QS TopMBA.com Jobs & Salary Trends (www.topmba.com)
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From 1990 to 2012 worldwide demand for MBAs grew at an average compound annual growth rate of 15%. This growth was spread across all the major continents and focused on graduates from the world’s top 200 business schools, in particular. There have been dips in demand.The period 1990 to 1992 saw a brief global contraction that impacted MBA demand. Between 2001 and 2004 following the dotcom crash, slow growth in major economies as far apart as the US and Japan, took its toll and demand for MBAs fell sharply. By contrast the post-Lehman nancial crisis of 2008-10 proved to be relatively benign for MBAs. Although there was retrenchment within nancial services overall demand was at and then recovered quickly. 18
So why has the MBA experienced this long-term growth of 15% annually? The answer lies, rstly, in its exibility, allowing early career professionals to bring about signicant career changes in either industry or function, and perhaps most importantly to relocate to a new part of the world. Isabella Pinucci, career service coordinator at Italy’s SDA Bocconi School of Management, says changing one or more aspects of their careers motivates many MBAs. “Whether it’s sector, industry or function or country or region, [switching careers] seems to be driving a greater proportion of candidates.” Secondly, an MBAleaders. is increasingly a recognized route common for accelerated career progression for aspiring business For example, For it has become for engineers and technology managers to take an MBA to help progress from a technical to a managerial position, or if already managing a team, then to reach the next step in their career. Thirdly, the MBA qualication fosters entrepreneurs who start businesses and then come back and recruit MBAs into their small, fast-growing companies. There will always be the Bill Gates and Michael Dells of this world who drop out of college only to become wildly successful. Yet ask a venture capitalist or an angel investor what they look for in aspiring entrepreneurs, and beyond the requisite experience in the chosen eld, an MBA is usually mentioned.
Demand for MBAs MB As in consulting consulti ng has been growing consistently. consist ently.The chart above reveals that the absolute number of MBAs hired into the consulting sector has more than tripled since 2000, and increased six-fold since 1990. As business becomes ever more global and complex, the demand for specialised consultancy skills growing exponentially exponentially, , anddeep the MBA qualication is a key selection criteria for a sector thatisvalues generalist skills and intellect above all else. This enormous expansion in MBA demand in the consulting sector simply reects the enormous growth in this industry since 1990 – consulting services generated over US$100 billion by 2007, up from US$10 billion in 1990. The chart reveals that MBA demand in nancial services has also increased, albeit less rapidly than consulting – doubling between 2000 and 2007 and, following a period of retrenchment, seemingly entering a new growth phase since 2012. Despite the drama of nancial crises, MBA demand has remained remarkably resilient in this sector over the long term. However, demand in nancial services is not recovering at the same pace as consulting within developed markets.
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Since the turn of the millennium, MBA demand in general industry (consumer goods, construction, energy, manufacturing, mining, retail, etc.) has really taken off as demand in emerging markets has accelerated. In 2014, there have been more MBA jobs reported in general industry than in nancial services. Demand for MBAs in the technology sectors has experienced an era of unprecedented growth, especially in Asia. As reported last year, more and more high technology and computer services companies are looking to MBAs to commercialise their products. Most of this growth is taking place in Asia with big US employers actively hiring in the region. In 2014, overall demand grew by 11% in high technology and by 7% in telecoms. Paul Danos, dean of the Tuck School of Business at Dartmouth College, explains the enduring appeal of top international MBA programs. “Demand for graduates of top MBA programs by the great businesses of the world continues to be strong. As businesses grow in complexity and scope, companies need more and more skilled and well-educated leaders,” says Danos, who is stepping down as dean in 2015. Danos says he foresees “no end to the insatiable demand of top businesses to employ high-quality MBA MB A talent.” talent.”
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5. Demand for MBAs around the World in 2014/15 It’s beginning to look It’s l ook as if 2014/15 will be the year in which employers in Western Western economies will gradually expand their hiring programs, rather than taking a wait-and-see attitude. The QS Survey Sur vey suggests many HR managers, especially in North Nor th America, America, believe believe their companies were too cautious in i n 2013.They’v They’ve e increased MBA MB A hiring in 2014 and are predicting a further increase in MBA demand in 2015. 20
By contrast MBA demand growth in emerging markets, which has outstripped Western markets in recent years, is beginning to settle down to more sustainable rates. All in all the qualication seems to be entering a more mature phase in terms of employer patterns of hiring. The table below shows the year-over-year change in numbers of MBA job opportunities reported reporte d by employers in 2014, by region and their expectation expectati on for 2015. The business cycle plays a major part in the short-term trends in MBA hiring, with local demand patterns uctuating quite rapidly.
Table: Percentage Increase in MBA Jobs by Region World Region
Projected Change 2014/13
Projected Change 2015/14
Africa & Middle East
2%
12%
Asia-Pacic
11%
8%
Eastern Europe
10%
5%
Latin America
7%
8%
US & Canada
10%
9%
Western Europe
0%
3%
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) Employers in the US & Canada have have ramped up MBA MB A hiring by 10% this year and are looking to grow demand by a similar amount again next year – really impressive gures for such a large and mature MBA market. European employers are also becoming more optimistic for 2015. Northern European economies economi es are already back on track with strong demand dema nd in the UK, Germany and Scandinavia. Southern European countries are also showing signs of recovery in 2015. Whereas Asia-Pacic reports the highest growth in 2014, employers employers in Africa and the Middle East project a 12% increase in MBA MB A recruitment in 2015, by by far the most impressive growth growth across all the regions.
The surge in employer demand in emerging markets has inevitably brought about a change in behaviour of international MBA students. A few years ago, an international MBA was a route to a new life in the USA, Canada or Western Europe. In 2013, an international MBA is as much about learning international business practices and creating a network - a powerful career advantage for MBAs seeking to exploit the rapid growth of China, Southeast Asia, Latin America, the Middle East and other emerging economies.
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Mauro Guillen, director of the Lauder Institute at Wharton, emphasizes that since 2008 “a higher percentage, perhaps as many as two out of every three international students, are returning to work in their home countries, or in emerging markets, rather than staying in the USA.This trend, trend , however however,, could lose lo se steam stea m if emerging-m em erging-market arket growth falters, fal ters, as it has already al ready in Brazil.” The table below shows the top ten countries by volume of MBA hiring.
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Table: Top Top 10 Countries for MBA Demand D emand MBA Job Market
Rank 2014
Rank 2013
United States
1
2
India
2
1
China
3
3
Mexico
4
6
United Kingdom
5
4
South Korea So Arrgentina A
6 7
5 7
Caanada C
8
12
Brrazil B
9
8
Siingapore S
10
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Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) The United States regains the lead as the largest market for MBA candidates, vying with India, which moves to second place. China remains in third place, while Mexico has displaced the UK and South Korea from fourth and fth place respectively. Singapore enters the top 10 by volume of MBA jobs, for the rst time. The growing demand in both Mexico (a non-BRIC emerging economy) and Singapore (a member of the ASEAN network) signals a shift in global perceptions of MBAs. Research by in of America reveals Mexico’s risingfor population and lower labour costs iBank n comparison toMerrill China Lynch have made it athat strategic market the US. This has resulted in increased foreign direct investment in the manufacturing sector. A growing labour force goes hand-in-hand with demand for qualied managers, creating a ripe market for MBA recruitment. Singapore has experienced vibrant economic growth in recent years and employers in the region seem to be embracing the MBA qualication. The UK leads the European contingent of MBA employers. employers . Germany, France and Spain follow but do not make the top-10 list. The UK shows a continued commitment to MBA hiring, which reects the dominance of the service sector in the UK economy and the sensitivity of MBA hiring to the performance of the service ser vice sector, sector, with the banking and nance sector being a major employer. Germany is quite different from the UK in terms of the prole of companies hiring MBAs, with technology, engineering and software companies sitting alongside consulting rms as the major MBA employers. MBA opportunities in France and Spain are also more common in general industrial companies and consulting rms.
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Table: Top 10 Countries for Projected Growth in MBA Demand Growth Rank 2014
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Country
Expe cted 2014 Growth
1
Russia
19%
2
Kazakhstan
18%
3
China
17%
4
Switzerland
15%
5
Mexico
14%
6
Colombia
13%
7
South Korea
13%
8
United Arab Emirates
12%
9
Saudi Arabia
12%
10
Canada
12%
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) Russia and Kazakhstan lead the table in terms of growth in demand for MBAs in 2014. Traditionally the volume of MBAs hired locally in each country has been relatively small, so in a sense this represents a catchup with other emerging MBA MB A markets that have experienced rapid growth in recent years. Saudi Arabia and UAE are also demonstrating very high growth levels. UAE UAE is recoverin recoveringg from a severe recession and would seem to be back on track. Saudi Arabia is just entering the MBA hiring market and is in an early phase of development. Latin American companies are now reaching out to American, Spanish and other European schools to pick up the talented nationals choosing to study overseas. Mexico Mexico and Colombia back this trend; both nations are well placed within the top-10 projected growth markets.
5.1.1.
MBA Jobs Trends in USA & Canada
The QS TopMBA.com TopMBA.com report highlights that across North America America MBA demand has jumped jump ed 10% in in 2014, 2014, very much much in line with with our our forecast forecast from last year’ year’ss report. report. It seems that as condence in economic recovery arrives in North America, we are seeing renewed renewe d demand for MBA graduates from globally oriented and local employers.
Table: Projected Increases in MBA Recruitment Levels - US & Canada The recovery of the US economy has previously been shaky and seemed to 2014 14/1 /13 3 have 2015 20 15//held 14 20 US & Canada
10%
9%
The recovery of the US economy has previously been shaky and seemed to have held back condence in increasing MBA hiring numbers, but this changed in the past year. The stabilization of the nancial services, ser vices, the recovery of some manufacturing industries and the return of new MBA employers, all look set to create strong demand in 2014. Technology companies are underpinning the growth in demand in the USA, with the big brands like Google, Amazon and IBM at the forefront. Miriam Park, who heads up Amazon’s MBA recruiting team, says, “We love MBAs because they’re strong analytical thinkers and problem solvers. They are a strong pipeline of leadership talent for the long-term.” Endeca (Oracle) is very active as are international companies like Samsung.
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Internship programs – still the fav favourite ourite screening mechanism of MBA MB A recruiters – have been a popular rst step for companies testing the MBA MB A recruitment market, and this year saw the birth of several. Look for a steady increase in the number of internship opportunities as rms continue the trend towards the ‘try before you buy’ approach. The US job search continues to be a challenge for international students seeking the coveted H-1B visa. The HR manager at KIMC in the US told TopMBA.com “Visa issues can cause problems. However However,, in our case, cas e, the STEM (Science, (Scie nce,Technolo echnology, gy, Engineer Engineering ing and Mathematics Mat hematics)) visa extension has helped.”
5.1.2. MBA Jobs Trends in Latin America 23
MBA demand in Latin America has become much more plentiful in recent years amongst local employers and this trend is continuing, albeit at more sustainable growth rate of 7% in 2014 after a year of 10% growth in 2013. Employers in the region are utilising MBAs as a key talent pool as companies battle to internationalise across the region. Brazil,Argentina and Mexico continue to be the engines of MBA growth in the region.
Table: Projected Increases in MBA Recruitment Levels – Latin America Latin America
2014 20 14/1 /13 3
2015 20 15//14
+8%
+7%
The QS TopMBA opMBA.com .com Employer Empl oyer Survey reveals a 14% increase in MBA demand dem and in Mexico, Mexi co, 9% uplift in MBA jobs in Brazil, and a 13% increase in MBA jobs in Colombia. Professional service companies like Ernst & Young, Deloitte, KPMG, Accenture and IBM all report big jumps in MBA hiring throughout Latin America, with the biggest increases in Argentina.The attractions of Buenos Aires seem to be a factor for these professional service ser vice companies. Mining and industrial companies are adding to the demand for MBAs. Companies like Senac Mines in Brazil and Grupo Elektra in Mexico are very active. Many European banks now own the major Latin American banks and they actively recruit MBAs, as do consultancies and major industrial companies. The biggest such recruiters are BBVA and Banco Santander, which have emerged as regional banking leaders in Latin America, though HSBC is not far behind.
5.1.3. MBA Jobs Trends in Western Europe The story in Western Europe is one of a lag in recov recovery ery in MBA demand, with 0% reported net growth in MBA demand in 2014. Growth in demand in Switzerland (15%), (15%) , Germany (9%), Belgium (9%), France (6%) and the UK (5%) has buoyed the region. Northern European MBA demand has been offset by continued declines in Southern Europe, especially in Greece, Italy and Spain. However there is some good news for Europe’s MBAs. Growth across Europe is forecast to accelerate in 2015, with Italian and Spanish employers leading the way with 15% and 7% projected growth in demand in 2015.The vibrancy of the consulting sector within the region underpins this better growth forecast for 2015.
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Table: Projected Increases in MBA Recruitment Levels – Western Europe Western Europe
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2014 20 14//13 20 2015 15/1 /14 4 +0%
+3%
MBA hiring in nancial services has seen some improvement in 2014. The nancial centres of London and Frankfurt are recovering and bank prots have begun to pick up once again, but MBA hiring is still restrained. Many European banks have strengthened strengthened their capital/asset ratios and are now highly liquid and looking for talented traders to make good use of all the cheap government money available in the system. BNL in Italy, Paribas and Santander are amongst the European banks with optimistic projections for 2015 MBA recruitment.
The German economy is usually the engine of MBA demand in Western Europe. Siemens, BMW and Daimler Benz are examples of German companies with longstanding MBA recruitment programs. Strong demand for German goods in Asia in particular, has fuelled a demand for Asian MBAs to join German companies. Likewise, many service companies are desperate to recruit German MBAs to serve their successful German clients. Another source of growth in Europe is bi-lingual Chinese-European language speakers. Europe gradually has to acclimatize to Chinese investment in European business and China is also becoming a major market for European exports. As a result, future business leaders with experience of both China and Europe are rapidly increasing in demand amongst recruiters. “We do see increased interest in hiring Chinese MBAs and international MBAs “We MB As who speak the major Chinese languages,” reports Vinika D. Rao, executive director of the Emerging Markets Institute at INSEAD, which has campuses in France and Singapore where MBA students study. “Currently, the focus continues to be primarily on China, Hong Kong and other Asia-based positions. positi ons. However However,, as Chinese investment investm ent in Europe grows, we anticipate increased increas ed interest in hiring bilingual MBAs MB As who can communicate effectively and adapt comfortably to both the site ofce in Europe and the HQ in China.”
5.1.4. MBA Jobs Trends in Eastern Europe Eastern and Central European employers reported growth of 10% in 2014, not quite the dramatic increase we forecast in last year’s report, but still signicant either. The growth gures are boosted by global companies expanding operations in Central Europe, with Russia and Kazakhstan reporting 19% and 18% growth in MBA demand respectively. There is a growing appetite for Western-educated MBAs to return home after their MBA to local/ regional employers.
Table: Projected Increases in MBA Recruitment Levels – Eastern and Central Europe Eastern and Central Europe
2014 20 14/1 /13 3
2015 20 15/1 /14 4
10%
5%
Russia has sustained strong growth in MBA demand throughout the recent world nancial crisis and is projected to have a further surge in MBA hiring in 2014, fuelled by the energy boom and expansion of the nancial services sector. PricewaterhouseCoopers is typical of Western consultancies hiring signicant numbers of MBAs within Russia.
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Elizaveta Komolova, an HR consultant with Morgan Hunt in Moscow, told TopMBA.com that Russian companies “are “are looking to hire more and more MBAs MB As compared to recent years.An MBA is becoming a default attribute of a successful manager.” Komolova adds “MBAs in Russia are expected to be more practice-oriented, have more structured knowledge and a broad business network. MBAs are known for their ability to think long-term and use their business contacts for the best.” best.” Kazakhstan and Azerbaijan are oil economies that are encouraging their local young professionals to study for an MBA. Strong demand in energy and nance has resulted in a strong uplift in MBA demand in both ecomomies since 2010. Central governments are also encouraging state-backed companies to recruit more MBAs, both locally and internationally.
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Good Czech or Hungarian candidates are highly sought after, after, but but mainly outside their home countries. Romania has a growing domestic demand for MBAs, and increasingly increasingly EU recruiters are hiring these nationals who now hold EU citizenship.
5.1.5. MBA Jobs Trends in Asia-Pacific After several boom years, demand for MBAs in Asia is settling at a sustainable Asian rate of 11% per year. In recent years, the MBA qualication has been embraced by Asian
employers, particularly in India and services, China, and especially in consulting Since and professional services, manufacturing, IT/computer nance and micro-nance. 2011, India has been vying with the USA to be the largest MBA job market and there is little sign of this trend reversing with 8% growth forecast in 2015. The QS TopMBA.com TopMBA.com report highlights that across Asia employers are continuing to embrace MBAs as they pursue global expansion.The MBA is becoming more in vogue. Asian candidates are amongst the highest GMAT scorers in the world, and are focused on developing excellent technical skills often at the expense of integrating fully in the social aspects of the MBA.
Projected Increases in MBA Recruitment Levels - Asia Pacific Asia-Pacic
2014 20 14/1 /13 3
2015 20 15//14
11%
8%
Without a doubt, theTopMBA.com International Employer Survey is reecting the emergence of more and more Asian companies seeking MBAs – they represent over a quarter of total respondents. Some employers are willing to hire from local business schools at relatively low salary levels, whilst whilst other Asian employers employers remain fully committed to hiring from top North Nor th American, European and Australian business schools and are often willing to pay the higher salaries expected by graduates of those schools, with a slight ‘cost of living’ adjustment. The rise of an elite cadre of Asian business schools is underway, but will probably take another ten years to be fully established.
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For the last few years, the most dynamic MBA market has been India, which has experienced an explosion in employer demand for MBAs, at least those from top-tier programs. India reports similar levels to the USA in terms of volume of reported MBA MB A jobs for fresh graduates. But among the many Indian companies that responded to the QS Employer Survey, there are several distinct groupings. Whilst multinational employers still have a strong preference to
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recruit MBA graduates frommajority international business schools, companies on locally educated MBAs. The of Indian employers arelocal actively looking concentrate to recruit from local business schools like the IIMs, the Indian School of Business as well as many others. Other local Indian companies that are looking for MBAs without work experience, almost as an alternative to a fresh undergraduate, are offering salaries below US$30,000. These employers have been excluded from the results of the survey. Demand for MBAs in China is also strong and getting stronger. It is ranked as the third largest MBA market in the world. Banks in China are recruiting large numbers of MBAs. China seems to be maturing as an MBA hiring market with a good number of opportunities in the professional services and consulting sectors, although these numbers are now growing more slowly than some other sectors. The projected demand levels from IT / computer services surpassed consulting for the rst time in 2014. As reported last year, demand is so strong that the Municipality of Shanghai has funded the launch of itslocal ownschools local business school Advanced Advanced Centre for Finance - to compete with other like CEIBS and– Shanghai Cheung Kong Business School. Employers in China could not nd enough Chinese MBAs returning from US and European business schools, spurring the local government into action. South Korea is joining the MBA party in Asia. Asia. Fuelled by big multinationals like Samsung, LG and Hyundai, South Korea is reporting 13% growth in MBA demand in 2014. South Korean employers told TopMBA.com they valued MBAs for their “passion and attitude,” “strategic thinking” and leadership skills. Japan is a mature MBA market, with a long tradi Japan tradition tion of companies companies sponsoring students students to study at Western business schools. Yet here too we see vibrancy with 10% growth in 2014.
5.1.6. MBA Jobs Trends in Middle East & Africa From a small base, MBA demand in this region has grown rapidly in recent years and it is not surprising that growth rates have settled down to just 2% in 2014. Growth has centered on the recovery in the United Arab Emirates and Saudi Arabia, but parts of Africa have also reported increased demand, albeit from a relatively low base, in sectors like energy, mining, consulting and nance. Demand is forecast to jump again by 12% in 2015.
Ameera Al Kaabi of UAE University in the United Arab Emirates, says the biggest constraint constraint on more MBAs coming to the Middle East is pay: “The salary package is not attractive to them.”.
Projected Increases in MBA Recruitment Levels – Africa & Middle East Africa & Middle East
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20114/13 20
2015/14
2%
12%
Even so, the UAE seems to be on the path to recovery, also showing a 12% increase in MBA demand led by banking, energy and IT companies with ofces in the UAE. Banks like Standard Chartered are basing much of their back ofce operations globally in Dubai.
5.2.
MBA Jobs by Sector in 2014 and Forecast for 2015
Two of the biggest MBA job markets by volume of job opportunities have traditionally been nancial services and consulting (with 22% and 12% of total MBA demand respectively) which require the technical skills and high levels of motivation that MBAs are so well-suited to provide. However, the volume of job opportunities from nancial services declined by 2% in 2014 from 24% in 2013.
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The second largest sector for MBA demand is IT/Computer Services at 13% of the total share of MBA jobs, a 4% incline in comparison to its 2013 volume. Recruitment/HR is gaining ground as a top destination for MBA graduates and accounts for the fourth highest job share. Increasing demands on human resources departments have driven the need for skilled HR managers. In addition to showing these shares of the MBA job market, the table below also shows the growth in reported jobs by sector in both 2014 and forecast for 2015.
Table: Growth in MBA Demand by Industry Worldwide - 2014 and 2015e Sectors Worldwide
Share (%) MBA Jobs 2014
Growth 2014/13
Growth 2015/14
Aerospace / Defence
1%
-12%
0%
Construction / Property
2%
12%
10%
Consulting / Professional Services
12%
9%
8%
Electronics / High Technology
7%
11%
8%
Energy
4%
18%
5%
Consumer Goods
1%
12%
5%
Financial Services / Banking
22%
7%
5%
IT / Computer Ser vices
13%
8%
12%
Law
1%
37%
21%
Manufacturing / Engineering
5%
10%
13%
Media / Entertainment & Arts
0%
11%
2%
Metals / Mining
2%
10%
1%
Pharmaceuticals / Biotech & Healthcare
4%
9%
0%
Public Sector / Govt. / Non-prot
2%
8%
8%
Recruitment / HR services
9%
9%
9%
Retail
2%
0%
4%
Telecoms
5%
7%
11%
Transportation / Distribution
1%
-2%
-3%
Travel / Leisure / Hospitality
1%
8%
1%
Utilities
0%
10%
1%
Other
7%
8%
8%
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com)
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5.2.1. MBA Jobs in Consulting Since 1990, the number of MBAs recruited annually by the consulting sector has increased six-fold. The global expansion of this industry and the demand for MBAs has gone hand-inhand. Consulting and professional professional services reports 9% demand growth growth in 2014 continuing continuing this longstanding pattern, albeit at a slower rate than previous years. Consulting is a bellwether for the health of the MBA and the sector is forecasting 8% growth growth in 2015.
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The table below looks at growth in consultancy demand by region. As we enter a likely period of economic growth, consultancies tend to acquire a different type of project compared to recessionary environments. Big recession projects like business restructuring and process re-engineering tend to dry up, to be replaced by M&A and strategic growth projects. This adjustment can take a year or so to work through from pipeline to live li ve assignments and this particularly seems to be the case in Africa & Middle East where economies are recovering but this has not yet been reected in consulting growth, resulting in a decline in MBA MB A demand in 2014. By contrast consulting rms in other regions have worked through this phase and are experiencing something of a boom. In Latin America, Western Europe and the US and Canada consulting rms are hiring accordingly, creating lots of opportunities for internationally exible MBAs.
Table: Growth in MBA Demand in Consulting Region
2014/13
Africa & Middle East
-4%
Asia-Pacic
8%
Eastern Europe
8%
Latin America
15%
US & Canada
11%
Western Europe
8%
Worldwide
9%
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com)
5.2.2. MBA Jobs in Finance Almost all major investment banks actively recruit MBAs. The credit crunch caused huge cutbacks in MBA hiring amongst some banks – especially Citigroup and Bank of America,which received the largest US government bailouts. Despite redundancies amongst experienced bankers however, entry-level recruitment remained steady in most other banks throughout the credit crisis. Demand for MBAs collapsed during 2001-2003. Goldman Sachs, Morgan Morgan Stanley and others cut MBA hiring by up to 80% in some ofces, but 2009 was completely different with many banks hiring actively. Today, investment banking isn’t the only destination sought by many nance-minded MBAs. “MBA students with relevant nancial or strategy experience can nd more opportunities at some of the ‘boutique’ corporate advisory rms or in private equity, but this requires more proactive networking,” says Mark Davies, employer relations manager at Imperial College Business School. “At Imperial, we have also seen MBA graduates hired into compliance, wealth and risk management roles, where demand for talent at all levels has been growing recently.”
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So, what turns a bright new business school graduate into a successful banker? Nebal Fahed, head of graduate recruitment – Americas for Deutsche Bank, says personality is a big piece of the puzzle. “While numerical ability is certainly essential, the sheer scale of our business means that we need MBA students from a wide range of disciplines and backgrounds,” Fahed says. “We look for high achievers with the intellectual curiosity and the determination to deliver innovative solutions for our global clients.” Most people associate investment banking with mergers and acquisitions, but most of the top banks look to recruit MBAs into global markets (sales and trading securities, xed income and derivatives), managing assets, structured nance, corporate nance and increasingly onand-off balance sheet hedge funds. There are also many back ofce positions in risk, nancial control and technology.
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Changes in regulations are creating more MBA opportunities. Market risk and compliance departments are seeing increased MBA hiring as banks seek greater security and control of risky investment classes. In fact, an overall emphasis on compliance experience may be spreading throughout the nancial services industry. Another new feature in recent years has been the entrance of hedge funds, private equity and venture capital houses into MBA recruiting in signicant numbers. In the past they have focused on more experienced MBA alumni recruited through a network. Today, they are recognising the need to recruit younger MBA graduates to meet the growing market opportunities. Jairaj Singh, a recruitment consultant specializing in investment banking and global markets at Michael Page Hong Kong, states that roles available to MBAs have shifted. “Risk and compliance have been key areas of growth, while corporate nance and M&A teams have become leaner due to cost cutting pressures,” he says. “There has been relatively strong activity on the buy side, with client attention focused on China; multiple hedge funds, to which much risk has been deleveraged, and asset management rms have made their presence felt.” It is not just banks, hedge funds, and private equity shops that recruit MBAs into nancial services. GE Capital is now one of the biggest recruiters of MBAs worldwide. American Express is also emerging as a major player. Insurance steadily hires MBAs. In the US there are a number of insurance companies that recruit ten or more MBAs each year such as AIG, AIG, Travellers, CIGNA and Liberty Mutual.
5.2.3. MBA Jobs in Technolo echnology gy & Telec elecoms oms The big story in 2014 is the growing demand for MBA talent amongst global technology companies, which are now recruiting in almost every region of the world. worl d. Top technology rms such as Google, Amazon and Apple feature prominently in rankings of popular MBA employers as multinationals spread their reach to recruit MBAs from a growing number of business schools around the world, in large numbers. Other technology companies are responding in kind with several expanding (or establishing for the rst time) large global MBA recruitment programs. High tech/electronics companies report 11% growth in demand in 2014. IT/computer services 8% growth while telecoms report 7% growth.
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Table: Growth in MBA Demand Deman d in Technolo echnology gy & Telecommunications Region Africa & Middle East
30
2014/13 -14%
Asia-Pacic
9%
Eastern Europe
14%
Latin America
0%
US & Canada
21%
Western Europe
2%
Worldwide
8%
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) Apple is now the most successful high tech company in the world and, along with Microsoft and Oracle, is undertaking an MBA hiring drive, recruiting into nance, sales, marketing and product management. Chloe Chometon of Oracle Ireland looks for MBAs with “International “International exposure [and] structured thinking.” Tom Kozicki, executive director of the MBA Career Center at UC Irvine says “the high tech corridor on the west coast has been an important source of jobs for our MBAs and remains strong.” The web is attracting MBAs, with household names like Google and eBay snapping up entrepreneurially minded graduates. “MBAs at Google nd plenty of opportunities to do cool things that matter, whether in product management, sales and nance, marketing, people operations and everything in between,” says Kyle Ewing, head of the tech giant’s global stafng programs. “While we value all levels and types of education, we look for MBA candidates with creativity, passion, and a healthy disregard for the impossible.” Telecomm elecommunicatio unications ns companies com panies such as Samsung, Apple, British Britis h Telecom and Vodafone are very ver y active. Asian technology techn ology recruiters recr uiters are hiring hiri ng actively in China, China , Taiwan and Korea. Although we still lack many Chinese recruiter respondents in the research, Korea is an example of the dynamism of technology in Asia.
5.2.4. MBA Jobs in general industry MBA demand in general industry (consumer goods, construction, energy, manufacturing, mining, retail etc.) is strong as many local employers in emerging markets expand the overall demand for MBAs. Though not seen as typical MBA recruiters, there are a growing number of local and national play players ers who seek MBAs (salaries tend to be below average). The consumer goods sector is reporting 12% growth in 2014, whilst manufacturing is reporting 10% growth, with large numbers of MBAs being hired, especially in emerging markets.
Media & entertainment has traditionally been a small sector in terms of MBA demand but 2014 has been the best year for MBA MB A hiring since the dotcom boom, with 11% growth.The spread of broadband is fuelling the demand amongst traditional media companies looking to digitise their products and also amongst many smaller companies seeking to become new media giants. Facebook and LinkedIn are the biggest brands and are embracing MBAs, but the list of hiring companies is extensive.
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Table: Growth in MBA Demand in General Industry Region
2014/13
Africa & Middle East
18%
Asia-Pacic
16%
Eastern Europe
5%
Latin America
5%
US & Canada
12%
Western Europe
11%
Worldwide
12%
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com)
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Manufacturing and general industry were among the success stories of the North American American market, with many companies repatriating operations from overseas back home, creating demand for general managers. But Asia will not give up the ght easily and still outstripped the USA in terms of demand growth. Our “General Industry” category is a broad grouping grouping of industries covering aerospace, automotives, chemicals, logistics, manufacturing and steel. Each industry reveals individual trends, but a common theme is the continued recovery in MBA hiring. More and more industrial companies are fully embracing globalization and understand that MBAs represent an essential pool of international managers who are capable of working in diverse cultures and business situations. In particular, multinational supply chains and procurement require internationally minded, multilingual managers, making MBAs a natural talent pool. A sizeable number of MBAs who do nd roles in the industrial sector will do so with multinational companies such as General Electric, Samsung, Toyota and Motorola, where specic MBA training programs have been the norm for over a decade. Internationally Internationally minded European companies like Siemens have established MBA entry entr y programs as well. The energy sector continues to report strong MBA recruiting with an 18% increase in MBA jobs in 2014. There seem to be three drivers of this trend. First of all the search for alternative energy sources is attracting many MBAs into smaller, entrepreneurial
organizations. Secondly, many of the big oil companies will need to replace their senior management over the next ten years as they come up for retirement. Finally, the growth of renewable energy sources is creating demand for new talent. “Today’s ever-changing energy landscape with increasing focus on renewables, energy security and energy efciency creates exciting career opportunities,” opportunities,” says Zeynep Flouret, assistant director of the INSEAD Career Development Centre. “According to INSEAD’s 2013 Employment Statistics, energy giants remain solid recruiting partners of INSEAD but career opportunities in energy come from a wide range of sources including entrepreneurial rms.” Exxon Mobil and BP are among the largest MBA employers in the energy sector, though the impact of the 2010 Gulf of Mexico oil spill cast a shadow over the prospects of all big players in the oil sector as governments increase regulations to limit drilling.
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Consumer goods companies have been committed to MBA hiring in the US for many years, but MBA careers in this sector have grown slowly in Europe and Asia, with worldwide growth at a very respectable 12% in 2014. Johnson & Johnson Consumer Products traditionally hires many MBAs in the US and around the world; this program has remained unchanged in recent years. By contrast Procter & Gamble has traditionally hired small numbers of MBAs MB As as have many other consumer goods But situationgoods is changing and itlike is now common for both local operations andcompanies. head ofces of the consumer companies Diageo, BAT and Coca Cola to hire signicant numbers of MBAs.
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The increasing globalization of international trade, growing interdependence of common markets and increased international competition, have fuelled interest in MBAs across the sector, but also made it vulnerable to a global recession. Inated MBA salaries remain a problem for MBA recruiters in the industrial sectors. A consistent message from recruiters in the industry is that they have to look outside the top-tier business schools to nd the talent they need. However, they are almost all reporting success in their search.
5.2.5. MBA Jobs in Pharmaceuticals & Healthcare This industry is dominated by global players, many of which have run global MBA hiring schemes for many years. After a bit of a lull, their appetite for MBAs seems to be resuming with 9% growth in demand in 2014.
Table: Growth in MBA Demand in Pharmaceuticals & Healthcare Region
2014/13
Africa & Middle East
0%
Asia-Pacic
2%
Eastern Europe
4%
Latin America
-4%
US & Canada
20%
Western Europe
8%
Worldwide
9%
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) The major pharmaceutical companies have always been very active MBA recruiters and pay the best salaries after consulting and investment banking. They also offer attractive benets and international mobility. They have remained committed to MBAs throughout the last decade and growth in recruitment numbers is steady rather than spectacular. There are also many smaller pharmaceutical and healthcare companies that are aggressively pursuing MBA hiring to help them meet m eet their growth potential. Healthcare employers say MBAs’ communication, multitasking and teamwork abilities make them valuable. But a lack of international experience, high high expectations for responsibility and promotions, and unreasonable salary demands make recruiting MBA talent difcult.
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5.3.
Functional Roles on Offer to MBAs
MBAs come from very diverse backgrounds and industries, with as many as 50% looking to make a career change after their MBA. This is reected not just in the wide variety of companies seeking to employ MBAs, but also the variety of functions they enter after completing their course. Many companies recruit MBAs into more than one function. At 3M, for example, MBAs are generally found in one of three functions: HR, nance or marketing/ strategy.
Chart: Functional Roles Offered to MBAs 2014
2013
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50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
t n a t l u s n o C
e c r e m m o c E
y r o s i v d A e c n a i n F
r e h t O e c n a i n F
t n e m e g a n a M l a r e n e G
y g o l o n h c e T / T I
g n i t e k r a M
g n i r u t c a f u n a M / s n o i t a r e p O
s e l o R r e h t O
t n e m p o l e v e D s s e n i s u B / s l e a S
g n i n n a l P c i g e t a r t S
s c i t s i g o L / n i a h C y l p p u S
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com)
The chart above shows some signicant changes in the functions offered to MBAs in 2014. Sales/ business bus iness development, developm ent, consulti consulting, ng, nance – other, and management continue con tinue to account for the largest proportion of roles offered. However, IT/technology (+5%), marketing (+2%) and E-commerce roles (+2%) surpassed their 2013 levels.
The heat map table below highlights the shifts in roles offered to MBAs over a four-year period.The higher highe r the proportion propor tion of roles role s offered, and the darker colour, means more mo re interest in the particular par ticular function in comparison to the previous year. year.
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Table: Functional Roles Offered to MBAs 2011-2014
34
2011
2012
2013
2014
Consultant
39%
37%
37%
34%
E-commerce
10%
8%
9%
10%
Finance - Advisor y
29%
26%
28%
22%
Finance - Other
39%
33%
44%
36%
General Management
43%
41%
44%
36%
IT / Technology
26%
24%
21%
25%
Marketing
44%
41%
36%
38%
Operations / Manufacturing
23%
24%
24%
23%
Other Roles
11%
10%
34%
30%
Sales / Business Development
40%
42%
46%
44%
Strategic Planning
42%
40%
19%
17%
Supply Chain / Logistics
23%
25%
9%
7%
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) (www.topmba.com) 5.4.
5.4. Preferred MBA Experience Levels MBAs with three to ve years’ experience remain most in demand and, together with MBAs of ve to eight years of work experience, account for 57% of MBA employer demand.
The least popular experience range is 0-1 years of experience. This contradicts the policy of several top-tier US business schools which are actively recruiting these “pre-experience “pre-experience”” candidates in the pursuit of ever-higher average GMAT scores, a policy with which employers do not agree. As a general rule, employers seek out MBAs with both the academic knowledge an MBA imparts and highly developed leadership and teamwork skills. Randall Lewis, executive director of the Professional Development Development Center at Purdue University’s University’s Krannert School of Management, Manageme nt, says “Employers want candidates can didates that are problem probl em solvers, great communicators and work well with others.” Adds Susan Shald, director of talent scouting for Gallup: “We’re looking for people that have this technical expertise that they can get down to the nuts and bolts of what they need to deliver, but also talk to someone at a high level if they need to.” James Prazak, Prazak, opera operations tions manager manager at Tricon Energy Energy in the USA, argu argues es strongly strongly against against prepreexperience experie nce MBAs. “They “T hey lack maturity, and feel they can command more money and prestige than undergrad counterparts when they really have a minimal advantage,” Prazak says. “Too many simply get an MBA because they couldn’t get a job after undergrad – [they’ve [they’ve spent] too long in school so they don’t understand unders tand the real world, plus they have no business experience.” experie nce.”
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Chart: Preferred Years of Work Experience Amongst Employers 2011-2014 0-1 Years
6% 5%
6%
7%
27%
1-3 Years
37%
30%
3-5 Years
5-8 Years
8+ Years
20%
9%
40%
28%
28%
39%
37%
19%
20%
19%
2014
5%
2013
7%
2012
8%
35
2011
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) Of particular note is the increased demand for graduates with more than 8 years of work experience. However, this experienced group typically falls outside the needs of mainstream on-campus MBA recruiters and the true demand for this group is unlikely to be reected fully in this research. They are more likely to nd a post-graduate career through means other than campus recruiting.
Demand for young and pre-experienced MBAs is almost zero in Western Europe and Latin America – in both these regions there is an above-average demand for MBAs with 5 to 8 years of work experience. By contrast, Asia-Pacic employers are much more willing to recruit younger MBAs with 0 to 3 years’ experience.
5.5. Key MBA Skills The QS TopMBA.com Jobs & Salary Trends Report has for many years reported on the importance and satisfaction of key skills attained by MBA MB A students during their studies. Employers are, broadly, satised with the technical skills acquired by MBA students, and this result seems to be independent of the business schools from which the emplo employe yers rs recru recruit. it. Whether it’s academic achievement, computer skills, languages or skills acquired in nance, marketing, e-business, and risk management, employers seem to have few qualms about the quality of MBA graduates. However, business school graduates are still not meeting expectations in terms of their soft skills such as communication, interpersonal skills and strategic thinking, which are at a premium. Soft skills are far and away the most important skills employers are looking for from new MBA recruits. Communications, interpersonal, strategic thinking and leadership skills make up four of the ve most important skills for new hires to possess. Relevant work experience is the fth criteria.
There has been a long-standing shortfall in i n terms of leadership and interpersonal skills, which is apparent year after year in this research. Muhammad Asim of Monsanto Pakistan conrms that his rm selects MBAs based primarily
on “communication skills, leadership skills, and interpersonal skills.”
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Chart: Importance and Satisfaction with MBA Skills amongst Employers in 2014 Importance
Satisfaction
3.00 2.50 2.00 1.50 36
1.00 0.50 0.00
t n e m e v e i h c A c i m e d a c A
s s s e n i s u B E
p i h s r u e n e r p e r t n E
s l l i k S e c n a n i F
s s e n e r a w A l a n o i t a n r e t n I
s l l i k S l a n o s r e p e t n I
s l l i k S r e t u p m o C / T I
s l l i k S p i h s r e d a e L
g n i t e k r a M
l a u g n i l i t l u M
e c n e i r e p x E t n a v e l e R
g n i k n i h T c i g e t a r t S
s l l i k S s n o i t a c i n u m m o C
t n e m e g a n a M k s i R
R S C
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com)
5.6. The Global MBA Recruitment Market – a profile of employer recruiting patterns and target nationalities (by region) The MBA recruitment market is probably the most globally exible recruitment market of any profession.The MBA qualication is geographically mobile and this section looks at what proportion of MBA employers recruit globally, regionally or locally and which nationalities they are targeting.
It is not that North American employers have withdrawn from global MBA hiring despite only 19% of respondents focused on global recruiting compared to 32% last year. Rather, we have hav e seen a big increase in the number of domestic-only recruiters returning to MBA hiring in 2014, reecting the growing strength and condence in the US economy. Among North American recruiters, 63% focus purely on national recruiting whilst 13% are localised in their search. Not surprisingly, Asia is the next biggest source region for these employers as the technology industry witnesses a revival. Stalled immigration reforms in the US have had an impact on internationally sourced talent. Canada’s more lax visa rules have resulted in a new wave of tech companies from Silicon Valley descending upon Vancouver. Facebook opened a temporary ofce in i n Van Vancouver couver in 2013 as a stopgap solution for international recruits waiting for American work visas. 1 1
Vancouver, the New Tech Hub http://www.businessweek.com/articles/2014-05-22/ vancouver-welcomes-tech-compan vancouver -welcomes-tech-companies-hampered-by ies-hampered-by-u-dot-s-dot-work-v -u-dot-s-dot-work-visa-caps isa-caps Follow us
European recruiters are more globally minded than their North American counterparts, with 36% recruiting internationally, up from 22% in 2013, and 20% recruiting across Europe, down from 29% last year. Nonetheless, close to 50% are recruiting Central Europeans in particular. parti cular. Between 24% and 34% of European employers are also very actively looking for North American, Asian and Latin American candidates.
Chart: Domestic, Regional and International Recruiting, North America and Western Europe 37
Global
Regional
Domestic
Western Europe 2013
Western Europe 2014
US & Canada 2013
US & Canada 2014
10%
20%
30%
40%
50%
60%
70%
80%
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) These international recruiting mandates are reected in the broad range of nationalities targeted by MBA employers.The table below identies the regional nationalities targeted for MBA hiring, by the location of the employer (in the left hand column).
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Table: Regional Nationalities Targeted for MBA Hiring by Location of Employer
Latin America
Western & Northern Europe
Central & Eastern Europe
Middle East & Africa
Asia, Australia & New Zealand
US & Canada
Africa & Middle East
39%
29%
41%
34%
95%
45%
Asia-Pacic
36%
19%
28%
34%
24%
83%
Eastern Europe
17%
13%
28%
93%
12%
12%
Latin America
20%
97%
15%
10%
8%
9%
US & Canada
99%
10%
13%
10%
7%
15%
Western Europe
32%
24%
87%
49%
26%
28%
Overall
41%
33%
36%
33%
28%
40%
Location of Employer 38
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) Amongst Middle Eastern employers, 95% are targeting the local or domestic MBAs, whilst 41% are targeting European MBAs. Demand for MBAs across all regions has increased in comparison to last year. Fewer Asia-Pacic employers are targeting local or domestic MBAs; that gure is down 7% from 2013. In spite of this decline, 83% of their recruitment activities are based in Asia-Pacic, 36% are targeting MBAs MB As in North America and 28% are targeting MBAs in Western Western Europe. However, a greater proportion is targeting Central and Eastern European candidates (34%).
Latin American employers are locally focused with 97% targeting their domestic and local MBAs. In 2014, 15% of Latin American recruiters expressed an interest in Western European MBAs, up from 10% in 2013.
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6.
MBA Salaries and Compensation
What is happening to MBA compensation in 2014? The QS TopMBA.com Jobs & Salary Trends Report provides the rst and best review of 2014 trends in MBA salary and total compensation (salary and bonus) based on our survey of 1,632 brand new MBA respondents and 5,669 actively hiring MBA recruiters contributing salary data between 2011 and 2014. We also compare our survey results with average salaries self-reported to TopMBA.com by top schools in each major country and region around the world in 2013. (Business Schools will not self-report their results for their graduating classes of 2014 until the end of 2014.)
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In order to ease comparison, the MBA salaries listed in this section are rounded to the nearest 100 and displayed in US dollars.
6.1.
Overview of Regional MBA Compensation in 2014
Overall MBA salaries have increased 4% on average in the mature North American and Western European markets for the rst time in several years, with an average salary of $94,100 , whilst average MBA compensation in North America (including bonuses) is up a whopping 14% to $128,566. With evidence of MBA demand picking up steadily in North America as well as in several European markets, markets, we we continue to predict that MBA salaries are likely to increase again in 2015 in these regions. At the elite end of the MBA hiring market we see salaries between $110,000 and $150,000 as the norm in North America and Europe. Europe. From the table below, we see that total compensation offered by MBA employers for MBA hires increased in three of the six regions listed in 2014. The largest increase was by 15% in the US & Canada from $112,200 to $128,600. MBA compensation increased by 6% in Central & Eastern Europe to $72,700 and by 3% in Western Europe to $112,600. Total MBA compensation in Africa and the Middle East suffered the greatest decline of 2014, down 13% to $70,300, whilst Latin American salaries dropped 6% and Asia-Pacic experienced a marginal loss of 2% from $87,900 to $86,000. For the purpose of comparison, we look at MBA salaries and bonuses reported by global, regional and national employers (excluding local employers or employers reporting gures less than $25,000 per year).
Table: Comparison of Total MBA Compensation by Region 2012-2014 (Global, Regional and National employer respondents only – excludes local) Region
2014
2013
2012
% Change ('14/'13)
% Change ('13/'12)
Africa & Middle East
$70,300
$80,700
$71,900
-13%
12%
Asia-Pacic
$86,000
$87,900
$79,300
-2%
11%
Central & Eastern Europe
$72,700
$68,800
$71,600
6%
-4%
Latin America
$71,400
$76,200
$75,400
-6%
1%
US & Canada
$128,600
$112,200
$107,500
15%
4%
Western Europe
$112,600
$109,100
$103,100
3%
6%
*Excludes local employers and any employ employers ers offering salaries less than $25,000 and employers in USA paying salaries of more than $250,000 Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) Follow us
Within these compensat Within compensation ion gures gures we include include bonuses bonuses reported reported by employe employers rs and in most regions the MBA bonus gures have increased in 2014 compared to 2013 (except Asia-Pacic Asia-Pacic and Latin America). A big attraction of an MBA qualication is not just the salary uplift, but also the likely bonuses. Bonuses continue to ensure that the MBA qualication offers superb returns on investment for almost all MBA MB A candidates, with an average payback period of between two and ve years. Many MBAs receive a sign-on bonus, to help repay tuition loans, as well as a performance-related end-of-year bonus. The bonuses reported throughout this report are the year-end year-end performance bonuses for which new MBA hires are eligible; sign-on bonuses are not reported. 40
At the elite end of the MBA hiring market we continue to see slight increases in salaries offered by mainstream global MBA employers. Among Am ong strategy consulting consul ting rms, for example, offers between US$110,000 and $160,000 have become commonplace in Europe and the USA. Amongst investment banks, the offers are between $90,000 and $200,000 – a larger range than in the past.
Table: Comparison of MBA Salaries by Region 2012-2014 (Global, Regional Regional and National employer respondents only – excludes local)
Region
% Change
% Change
2014
2013
2012
('14/'13)
('13/'12)
Africa & Middle East
$57,700
$65,300
$62,600
-12%
4%
Asia-Pacic
$68,000
$68,300
$63,700
0%
7%
Central & Eastern Europe
$54,900
$61,700
$61,300
-11%
1%
Latin America
$55,500
$59,000
$58,900
-6%
0%
US & Canada
$97,700
$90,000
$89,400
9%
1%
Western Europe
$90,600
$88,800
$85,200
2%
4%
*Excludes local employers and any employ employers ers offering salaries less than $25,000 and employers in USA paying salaries of more than $250,000 Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) In summary, as more employers compete in the global market for top MBA talent, we observe an equalization of MBA salaries across regions – a trend that has
been on-going for over a decade. ~
Western Europe and North Nor th American salaries have risen across most industries.
~ The
gap between the highest international MBA salary region, North America, and the lowest, Central & Eastern Europe, is now only about 40%, compared to 50% a decade ago.
~
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MBA salaries in Asia-Pacic Asia-Pacic vary widely between countries. Australia offers amongst the highest MBA MB A salaries in i n the world, ve times the level of MBA salaries in Thailand, where employers offer amongst the lowest MBA salaries in the world.
MBA salary differentials across regions have been steadily narrowing over the last ten years. This gradual equalisation in MBA salaries has been driven by several factors: ~ There
are more multinationals looking to hire MBAs MB As on standard packages irrespective irrespectiv e of the country in which they work (except for perhaps small cost of living adjustments).
~ An
overall rise in job opportunities for MBAs, relative to supply. As this report indicates, we have seen a doubling or tripling in demand for MBAs just since 2000, yet yet the number of graduating MBAs has grown at a much slower rate (and the number of MBAs graduating from the top 200 business schools most highly sought after by employers has remained virtually the same).
41
~ An
expansion of global trade, hence the growth in numbers of companies in each country looking to recruit MBAs.
~
An increase in the number of MBA alumni in senior management or in roles responsible for hiring, who are better informed of the value of MBAs MB As compared to traditional HR managers.
~ Increased
availability av ailability of information on ave average rage MBA salaries online and in social networks, enabling candidates to demonstrate their true value when negotiating with local employers.
It is inevitable that differentials between regions will remain, not least due to: ~ The
big variations in cost of living between countries.
~ The
tendency for MBA students to be much younger in some som e regions (especially Asia) compared to others.
Variations riations ~ Va
in the extent to which MBAs are accepted as a generally required qualication for senior managers in a country country.. The USA still remains the most MBAcentric job market for managers, although Canada, the UK, Mexico, Australia, India, China, Korea and Japan are following suit.
~ As
mentioned previously, previously, the the growing number of local companies seeking MBAs at salary costs benchmarked against lower local managerial salary salar y levels, especially in India, Southeast Asia Asia and Latin America.
~ Availability
of locally educated MBAs from less prestigious business schools willing to accept signicantly lower salaries
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6.2. Comparing MBA Salaries in North America and Western Europe 19992014 The nancial crisis and subsequent recession in the West certainly had a downward impact on MBA salaries from 2009 to 2013, but but the impact was not severe and from last year there
is evidence of resumed upward pressure on MBA salaries.
Chart: Long Term Trend in MBA Salaries across North America and Western Europe 42
0 0 8 , 3 7 $
1999
0 5 1 , 8 7 $
2000
0 5 2 , 2 8 $
2001
0 0 9 , 3 7 $
2002
0 0 2 , 5 7 $
2003
0 5 2 , 3 8 $
2004
0 0 0 , 5 8 $
2005
0 5 5 , 9 8 $
2006
0 5 2 , 3 9 $
2007
0 5 2 , 5 9 $
2008
0 0 5 , 1 9 $
2009
0 5 6 , 9 8 $
2010
5 6 6 , 2 9 $
2011
9 7 3 , 1 9 $
0 3 9 , 0 9 $
2012
2013
5 3 1 , 4 9 $
2014
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) Looking at the longer term trend in av average erage MBA salaries across Western Europe and North America,, the QS TopMBA. America opMBA.com com Jobs & Salary Salar y Trends Report Repo rt reveals that they are roughly 10% higher than they were a decade ago, but are still below their peak in 2008. An average salary of US$94,100 across Western Europe and North America is roughly three times the salary salar y being achieved by fresh undergraduates entering the job market for the rst time – not bad for MBA candidates who on average have have just three years of work experience post rst degree. What is happening at the top end of business schools? There There are a small number of business schools that report average salaries signicantly above the TopMBA.com average.
6.3. MBA Salaries and Bonuses by Industry Sector in 2014 Ten years ago an MBA was effectively a passport into a career in strategy consulting or investment banking with salaries as much as 50% higher than other sectors. These sectors still pay well, but they are no longer the top-paying sectors as other companies with global ambitions seek to compete for top talent. Amongst all employers in Europe and North America,the highest paying sector in 2014 remains metals and mining, offering an average MBA salary of $134,250 ($139,000). Pharmaceuticals, dominated by multinationals, dropped from the top spot in 2012 to third in 2014, with an average MBA salary of $99,200 ($100,300). Construction/ property placed fourth this year, with average salaries of $98,350 ($97,200). Financial services are in fth place with an av average erage salary of $95,050.
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In 2014 average salaries reported by consulting and professional services came in at $88,250, which reects the growth in the number of smaller niche consulting rms around the world offering salaries lower than the established strategy leaders that are still reporting annual MBA pay in the $110,000 to $130,000 range.
The lowest average MBA salaries are offered in utilities, law, travel & hospitality, retail and the public sector, all paying average annual salaries AT OR below ABOUT $80,000.
Table: Average Salaries and Bonuses by Sector - North America and Western 43
Europe 2014 (US$) North America & Western Europe Average 2014 Industry Sector
Avg. Salary
Avg. Bonus
Total
Avg. Salar y
Avg. Bonus
Total
Aerospace / Defence
$75,500
$5,000
$80,500
Construction / Property
$98,350
$16,650
$115,000
Consulting / Professional Services
$88,250
$18,900
$107,150
Electronics / High Technology
$94,950
$17,250
$112,200
Energy
$107,000
$19,950
$126,950
Fast Moving Consumer Goods
$94,450
$15,600
$110,050
Financial Services / Banking
$95,050
$20,550
$115,600
IT / Computer Ser vices
$89,600
$29,200
$118,800
Law
$67,500
$17,500
$67,500
Manufacturing / Engineering
$81,550
$20,650
$102,200
Media / Entertainment & Arts
$88,350
$20,850
$109,200
Metals / Mining
$134,250
$33,450
$167,700
Pharmaceuticals / Biotech & Healthcare
$99,200
$27,350
$126,550
Public Sector / Govt. / Non-prot
$80,150
$15,700
$95,850
Recruitment / HR services
$88,700
$17,600
$106,300
Retail
$74,350
$20,300
$94,650
Telecoms
$92,750
$13,950
$106,700
Transportation / Distribution
$85,850
$10,950
$96,800
Travel / Leisure / Hospitality Utilities
$76,450 $79,350
$8,450 $11,500
$84,900 $90,850
Other
$86,150
$15,650
$101,800
Education
$72,050
$10,000
$82,050
Industry Sector
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) Salary is not the only aspect of MBA compensation. Employers recognise the investment MBA candidates have to make in paying for their qualication and the vast majority of MBA employers who completed the salary section of our survey sur vey – over 70% in North America and Western Europe - will pay a bonus in addition to base salary to their MBA hires. The table above also shows average compensation for key industry sectors.
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~ Amongst
all employers in Europe and North America, the highest paying sector in 2014 remains metals and mining, offering an average MBA salary of $134,250 ($139,000).
~
Energy, which has seen a surge in employment demand in 2014, jumps into second place for average salaries on offer, at $107,000.
~ Pharmaceuticals,
dominated by multinationals, have dropped from the top spot in 2012 to third place in 2014, with an average MBA salary of $99,200 ($100,300).
~
Construction/ property placed fourth this year, with average salaries offered of $98,350 ($97,200). And nancial ser vices placed fth, with an average salary of $95,050.
~
The boom in demand for MBA talent among high tech and electronics companies has triggered a jump in the av average erage salary to $94,950.
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~ Although
nancial services companies, on average, are not offering the top basic salary the total compensation in this sector can often exceed $200,000 with bonuses making up a much higher proportion of the package.
~
consulting rmsare offer salaries number betweenofUS$110,000 and consulting $130,000 in Europe Strategy and the USA, but there a growing small and niche rms in the market for MBA talent, resulting in an average average salary of just $88,250 ($89,150) across the sector.
6.4. Regional Review of MBA Salaries & Bonuses in 2014 In the tables below we provide average MBA salaries in selected countries. These gures are for employers based in each country and recruiting MBAs in that country only. We have excluded international employers employers because of the wide variations in responses and to provide more comparable data year-on-year. These country gures should be used as an approximate guide only, whereas the regional gures are based on large response samples and are much more robust.
Table: Top Ten Countries for Average 2014 MBA Salaries* *Based on national domestic employer responses only. Excludes international and local employers.
Country
Average Salary (US$)
1
Switzerland
$ 122,000 $1
2
Australia
$115,600
3
Denmark
$112,000
4
UK
$98,000
5
USA
$93,200
6
France
$89,800
7
Germany
$89,800 $8
8
Spain
$ 83,100 $8
9
Japan
$ 83,000 $8
10
Canada
$87,500
2014 Rank
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com)
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6.4. Regional Review of MBA Salaries & Bonuses in 2014 North American American companies have a long tradition for MBA hiring and although MBA salaries have uctuated downwards slightly over the last ve years, today MBA salaries are ahead of where they were in 2007. The USA still has the largest number of MBA employers in the world and has by far the greatest range of MBA salaries. This report does not include any salaries above US$250,000 (prevalent in the USA among private equity and venture capital companies and within selected departments of investment banks and only offered to candidates with highly relevant work experience). Including such salaries would distort results year on year depending on the number of respondents.
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MBA salaries in North America grew by 9% in 2014 and overall compensation grew even more as bonus growth outstripped salary growth.The recovery in the US market is stronger than recruiters were anticipating last year and as a consequence MBA hiring companies are becoming more optimistic once again, which is likely to lead to further fur ther compensation growth in 2015.
Table: Average MBA Salaries by Country 2014 Country
Average Salary (US$)
United States
93,200
Canada
87,500
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) Some of the best known US business schools, listed below, pay average salaries of 10 to 30% above the average. These business schools typically have between 30 to 40% international students in their class. There is signicant variation in salaries paid in different states across the USA, with schools close to major cities of New York, Boston, San Francisco and Chicago yielding the highest salaries.
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Table: Best MBA Salaries Reported By US B-Schools (above $100,000)
State
Average MBA Salary 2013 Class (US$)
Cali Ca lifo forn rnia ia Massachusetts
129,65 129, 652 2 124,085
Penn Pe nnsy sylv lvan ania ia
120, 12 0,70 702 2
Illinois
119,394
Massachusetts
118,406
U.C., Berkeley (Haas)
California
117,738
U. of Chicago (Booth)
Illinois
115,079
Dartmouth College (Tuck)
New Hampshire
115,031
Duk Du ke U. (F (Fuq uqua ua))
Nort No rth h Ca Carrol olin inaa
112, 11 2,75 751 1
Columbia Business School
New York
112,728
U. of Michigan (Ross)
Michigan
111,417
U. of Virginia (Darden)
Virginia
111,171
Pennsylvania
110,405
Cornell U. (Johnson)
New York
109,000
NYU (Stern)
New York
107,450
Texas
106,277
North Carolina
105,397
California
104,728
Conn Co nnec ecti ticu cutt
104, 10 4,14 147 7
Georgia
103,453
Washington
102,177
Indiana
101,656
Tennessee
101,308
Texas
101,229
School Stanfo Stan ford rd Gr Grad adua uate te Sc Scho hool ol of Bu Busi sine ness ss Harvard Business School U. of Pe Penn nnsy sylv lvan ania ia (W (Wha hart rton on)) Northwestern U. (Kellogg) MIT (Sloan) 46
Carnegie Mellon U. (Tepper)
U. of Texas, Austin (McCombs) U. of North Carolina (Kenan-Flagler) UCLA (Anderson) Yal ale e Sc Scho hool ol of Ma Mana nage geme ment nt Emor y U. (Goizueta) Georgetown U. (McDonough) Indiana U. (Kelley) Vanderbilt U. (Owen) Rice U. (Jones)
Source:TopMBA.com/Scorecard 2014– Data supplied by schools according to MBA Career Services & Employ Employer er Alliance standards
Table: Best MBA Salaries Reported By Canadian B-Schools (above $80,000) School
Average MBA Salary 2013 Class (US$)
U. of Calgary (Haskayne)
94,264
Western Ontario U. (Ivey)
88,520
York U. (Schulich)
87,000
McGill U. (Desautels (Desautels))
86,550
Ryerson U.
85,327
U. of Toronto (Rotman)
84,802
U. of Ottowa
83,501
Queen's U.
81,590
Source:TopMBA.com/Scorecard 2014– Data supplied by schools according to MBA Career Services & Employ Employer er Alliance standards
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6.4.2. Latin America In Latin America there remains quite a large disparity between multinational MBA salaries compared to local company MBA MB A salaries. Multinationals are offering between US$60,000 and $80,000 for new MBA hires returning to the region. However, local companies are offering between US$30,000 and $60,000. Even including local and regional employers, an average MBA salary of US$59,300 in Latin America represents a signicant gap with non-MBA salaries, reecting reecting the increasing relevance of MBAs to multinationals in the region. It remains a fact, however, that MBA employers still primarily target international business schools, with a gap remaining in the supply of internationally recognized MBAs within the region.
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The table below shows average salaries by country from companies supplying salary data in Latin America. Mexico reports the highest average salary, amongst multinationals, at US$68,700. Mexico has the largest number of MBA employers, with over 50 taking part in this survey.
Table: Average MBA Salaries by Country 2014
Average
Year on
Country
Salary (US$)
Year Trend
Argentina
49,600
Decrease
Brazil
62,900
Decrease
Chile
59,500
Increase
Mexico
68,700
Decrease
Peru
58,800
Increase
Venezuela
36,700
Decrease
Source: QS TopMBA.com Jobs & Salary Trends Report 2011/2012 (www.topmba.com)
Table: Best MBA Salaries Reported By Schools in Latin America (above $40,000)
School Business School Sao Paulo IPADE Business School Universidad Panamericana INCAE Business School
Average MBA Salary
Country
2013 Class (US$)
Brazil
69,000
Mexico
46,958
Costa Rica
41,528
Source: TopMBA.com/Scorecard 2014 – Data supplied by schools
6.4.3. Western Europe MBA compensation in Western Europe grew by 4% in 2014. There is a sense of renewed optimism with recovery in sight.
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Switzerland reports the highest av average erage MBA salaries in Europe of $122,000, and the second highest average MBA compensation in the world in 2014. Denmark reports consistently high MBA salaries amongst responding employers, reporting an average salary of $112,000 in 2014. The United Kingdom reports the third-highest average MBA salary in Europe at $98,000. MBA salaries in France, Germany and Spain were all above $80,000.
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The strength of Swiss MBA salaries in 2014 can partly be explained by the predominance of nancial services companies in Switzerland, which actively recruit MBAs. The strengthening of the Swiss currency, currency, and and the relocation of many multinationals and hedge funds to Switzerland from London and Frankfurt to reduce their tax bills, bill s, also created additional demand for MBA MB A talent.
Average German MBA salaries – at $89,800 Average $ 89,800 – are signicantly lower than those in Switzerland. This does not reect a lack of demand, but quite the contrary. More MBA employers in Germany are recruiting international MBAs from Asia and the Indian sub-continent at lower salaries than those paid to native German candidates.
Table: Average MBA Salaries by Country 2014 Country
Average Salary (US$)
Year on Year Trend
Denmark
112,000
Decrease De
France
89,800
Increase
Germany
89,800
Increase
Italy
73,200
Decrease
Spain
83,100
Decrease
Switzerland
122,000
Increase
United Kingdom
98,000
Increase
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) The highest average salaries reported by European business schools in each country tend to exceed these country averages for several reasons. As mentioned, several schools target much more experienced executives for senior management positions and these schools will typically report salaries above those of their competitors in each country. Schools that target candidates for the consulting and banking industry (such as INSEAD in France, IE and IESE in Spain and IMD in Switzerland) also tend to exceed these averages.
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Table: Best MBA Salaries Reported By European B-Schools in 2014 (above $100,000)
Country
Average MBA Salary 2013 Class (US$)
IMD
Switzerland
131,566
St Gallen
Switzerland
130,000
Spain
117,260
Vlerick Leuven Gent Management School
Belgium
116,475
HEC Paris
France
115,079
INSEAD
France
114,418
Germany
114,000
London Business School
UK
113,737
U. of Cambridge (Judge)
UK
109,647
Copenhagen Business School
Denmark
109,194
ESMT
Germany
108,750
IE Business School
Spain
105,200
SDA Bocconi
Italy
100,030
Craneld School of Management
UK
100,000
School
IESE
Mannheim Business School
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Source: TopMBA.com/Scorecard 2014 – Data supplied by schools
6.4.4. Central Europe The experience of MBAs in Central Europe in 2014 has been a repeat of 2013. Central European economies have experienced a difcult year, with several, including Ukraine, Hungary and Bulgaria, battling to maintain nancial solvency, and hit hard by austerity in major trading partners like Greece and Germany. Not surprisingly, MBA salaries have experienced downward pressure in the region. The table below shows average salaries by country from companies supplying data in Central Europe. Russia reports the highest average average salary at US$73,300.
Table: Average MBA Salaries by Country 2014
Average Salary (US$)
Year on Year Trend
Russia
73,300
Increase
Greece
35,500
Decrease De
Country
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com)
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Table: Best MBA Salaries Reported By Schools in Central European Countries (above $40,000) School Moscow U. (Touro) CEU Business School CMC CM C Gr Grad adua uate te Sc Scho hool ol of Bu Busi sine ness ss Warsaw U. of Technology Business School 50
Country
Average MBA Salary 2013 (US$)
Russia
70,000
Hungary
63,500
Czec Cz ech h Re Repu publ blic ic
50,0 50 ,000 00
Poland
46,000
Source: TopMBA.com/Scorecard 2014 – Data supplied by schools
6.4.5. Asia-Pacific Within Asia-Pacic, Australia remains the salary leader in 2014, with an average salary of $115,600. Japan reports the next highest compensation in the region, $83,000, followed by South Korea at $67,500. China reported strongly increasing MBA salaries in 2014. Asia-Pacic is a large territory and MBA salaries vary signicantly between countries. Southeast Asia, India India and China hav have e typically reported much lower MBA salaries than more
mature markets like Japan, Korea or Australia. This differential is really emphasized if we look at salaries offered by the many local MBA employers entering the marketplace. They offer salaries as low at $25,000 and are targeting MBAs from local business schools, especially within India and China, many of whom are happy to accept these lower salaries – a sharp contrast with the graduates of established international business schools. The table below shows average salaries by country from over 500 international MBA employers supplying data in the Asia-Pacic region.
Table: Average Asia-Pacific International MBA Salaries by Country 2014 (US$)* Country
Average Salary ($)
Year Yearon Trend
Australia
115,600
Decrease
China
62,300
Increase
India
53,200
Decrease
Japan
83,000
Increase
South Korea
67,500
Increase
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com) *Employers that are recruiting locally and do not require work experience have been excluded.This included signicant numbers of employers in India and China offering salaries less than US$25,000.
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Asian multinational employers targeting top international business schools are becoming more competitive and offering salaries that compare directly with their Western Western counterparts. In addition, salaries at local business schools are catching up with Western schools as they increasingly attract international candidates to meet the needs of local employers.
Table: Best MBA Salaries Reported By Schools in Asia in 2014 (above $50,000)
Country
Average MBA Salary 2013 Class (US$)
Vlerick Business School China
China
116,475
Hitotsubashi GSICS
Japan
108,462
CEIBS
China
81,000
IIM Amedhabad
India
66,888
HKUST
Hong Kong
64,000
U. of Hong Kong
Hong Kong
55,000
Singapore
53,016
South Korea
53,000
Japan
50,200
School
Nanyang Business School, Singapore Seoul National U. International U. of Japan
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Source: TopMBA.com/Scorecard 2014 – Data supplied by schools The high salaries reported by Australian business schools are partly a function of the strengthening of the Australian dollar, but even adjusting for this effect reveals an increase in MBA salaries in Australia, driven by the strong demand for MBAs amongst multinational employers across Asia and the strength of Australian Australian business schools in recruiting and placing Asian candidates throughout the region.
Table: Best MBA Salaries Reported By Schools in Australia in 2014 (above $50,000
School
Average MBA Salary 2013 Class (US$)
U. of Queensland
145,280
Melbourne Business School
120,310
La Trobe Business School
110,000
U. of New South Wales, AGSM
99,771
Queensland U. of Technology
99,300
Monash U.
85,000
Sydney Business School
70,476
Australian National U.
63,000
Bond U.
58,000
U. of Western Australia
50,000
Source: TopMBA.com/Scorecard 2014 – Data supplied by schools
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6.4.6. MBA Salaries in Africa and Middle East The table shows av average erage salaries by country from companies supplying data in Africa Africa and the Middle East, of which the majority were in UAE. UAE reports the highest average salary at US$72,100, signicantly signicantly above Saudi Arabia which reports $51,600.
Table: Average MBA Salaries by Country 2014
Average Salary ($)
Year on Year Trend
Saudi Arabia
51,600
Decrease
United Arab Emirates
72,100
Increase
Country 52
Source: QS TopMBA.com Jobs & Salary Trends Report 2014/15 (www.topmba.com)
Table: Best MBA Salaries Reported By Schools in Africa & Middle East in 2014 (above $50,000)
Average MBA Salary
Country
2013 Class (US$)
Regenesys Business School
South Africa
72,115
U. of The Witwatersrand
South Africa
55,148
Stellenbosch U. Business School
South Africa
54,240
UAE
52,000
South Africa
50,000
School
United Arab Emirates U. U. of Cape Town
Source: TopMBA.com/Scorecard 2014 – Data supplied by schools
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Special Thanks to:
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QS Quacquarelli Symonds Ltd QS Quacquarelli Symonds was founded in 1990 and has established itself as the leading global provider of specialist higher education and careers information and solutions. Education and career decisions are too important to leave to chance, chan ce, so QS ensures that candidates have access to the best tools and the best independent expert information before making a decision. QS organizes the largest business education event in the world, the QS World MBA Tour Tour and boasts an extensive product range including print and online publications. It produces a range of annual primary research reports including the QS TopMBA.com Applicant Survey, Survey, the QS TopMBA.com Jobs and Salary Trends Trends Report and the QS Global 200 Business Schools Report, as well as the globally renowned QS World University Rankings®.
Website: www.TopMBA.com
All information © QS Quacquarelli Symonds Ltd 2013
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