Competition for places increases as young professionals use the MBA to turn the economic crisis into a career opportunity.
As the final round of admissions to the world’s top business schools draws to a close, the numbers show that demand for places in the MBA classroom are reaching record levels. A survey by GMAC, the Graduate Management Admissions Council, of 500 schools around the world found that the number of potential MBA students had risen by a staggering 64% on the previous year.
While many top US schools reported a softening in demand from international students in the final round of admissions, notably from India and South Korea, demand from US candidates has remained strong. Pete Johnson, Director of Admissions at UC Berkeley’s Haas School reports another year of double-digit growth. “The Haas MBA program has seen consistently strong growth in demand in recent years. In fact US applicants have increased 16% every year over the last 3 years.”
Demand for the MBA is reflected by data for the GMAT, the standardized test commonly used by business schools as part of the admissions process. Testing hit a record last year, with 246,957 exams administered, a 25.3% increase over the last three years. The majority of GMAT score reports were sent to US schools, but business schools in Europe and Asia made substantial gains.
At one of Europe’s leading schools, ESADE in Spain, numbers of applications for the full-time MBA are up by 56% compared to last year. “This data confirms the countercyclical nature of MBAs which facilitate professional impetus when executives encounter stagnation”, explains Camila de Wit, Director of Admissions and Career Services. “What’s more, if studying an MBA gives a competitive advantage in times of economic troubles such as today’s, it may just become a prerequisite.”
The school’s new flexible MBA format (12, 15 or 18 months long) is proving popular in the current unpredictable economic situation, allowing students themselves to define the program length according to their interests and professional development.”
Henry Herring, a former financial advisor at Morgan Stanley in Chicago, chose to do his MBA at one of the top schools in Asia-Pacific, the Melbourne Business School (MBS). “Though I was tempted by going to graduate school in the US, I felt that the Pacific Rim, specifically Australia, has more potential for growth than the US in coming years. In fact I estimate the country has 3 to 5 times the potential, so I wanted to be where the action is and wanted to study at one of the best schools in the region.”
He is not alone – the number of full-time MBA applicants at Melbourne Business School doubled from last year. And his international MBA experience has exceeded expectations. “The faculty are top notch, and I appreciated that they come from all over the world, not just Australia. That reinforces the global perspective of our learning. Melbourne has been a great place to learn. I’d like to stay here in Australia after I graduate.”
For MBS Dean John Seybolt, MBA graduates like Henry will enjoy new career options. “Why are people returning to get an MBA? Let’s face it. If people are being laid off, in say, financial services, they’re not going to go back to get an MBA so they can progress their career in financial services… they’re going to do an MBA to help switch sectors. Some will argue that given the current crisis, they will be more cautious, because it’s not just moving their careers ahead, it’s moving laterally, and hopefully ahead and that’s a big jump.
For those working in banking, the timing for the MBA has rarely made more sense. “The landscape of financial services as we’ve known it has shifted,” explains Kelly Wilson, Assistant Dean and Director of the Georgetown MBA. “For those who have been able to maintain their employment, individuals may begin to evaluate their careers within this new reality. They may then determine that they would be better positioned in a different functional role or industry. For these individuals, business school is an ideal opportunity to step out of the work force, retool and re-establish themselves professionally.”
So with MBA demand soaring, what are the chances of gaining admission to your dream business school? Pete Johnson at Haas explains that it is not the sheer number of applicants that impacts your chances of success. “Regardless of the volume, the most important factor is always the quality of the application. The applications that stand out are those from applicants who have strong academic preparation, good work experience and letters of recommendation, and a clear understanding of what they will gain from their MBA experience.”
Despite the competition, business school looks like a good bet. Jared Zack, a first year student at Georgetown’s McDonough School of Business typifies the belief that business school is a smart place to be in the current economy. “I believe that this is an incredible time to be a student in an MBA Program. By being in this environment during such a challenging time, we really can understand how this situation came about, and gather the leadership and business skills necessary to create future prosperity.”