New research has shown that demand for MBAs is up 24% in 2006 across a range of industries, with the management consulting sector reporting the highest rise at a massive 38%.
As a result MBA salaries are also on the rise – up 7.5% on last year. In the key US and Western European job markets – still the largest employers of business school graduates around the world – recruiters are reporting average base salaries for new MBAs of US $90,500 (£48,000). Bonuses are also up to an average of US $23,100 (£12,250) across the range of sectors with investment banking paying the highest at an average of US $37,500 (£19,900). The results of the survey of 445 leading employers around the world conducted by the QS World MBA Tour, the international programme of business school information events, indicate that reward packages for MBAs are now at a record high.
In less well-established job markets for MBAs, salaries are lower but rising steadily. Eastern European and Russian recruiters report average base salaries of US $63,200 (£33,500), recruiters in Latin America US $62,500 (£33,100) and in Asia-Pacific US $67,600 (£35,800).
According to the study, the highest overall reward for newly graduated MBAs comes from the investment banking sector in the US and Western Europe where total first year earnings have reached as much as US $146,000 (£77,000).
The downside to such salaries is that some employers may become disaffected with MBAs who appear to have excessive expectations in relation to their performance in the workplace. One of the respondents to the survey, Andrew Siger of the manufacturing giant, Hilti spoke of a, “…highly competitive market (that) drives compensation insane,” while John Sikking of the IT company, Gartner Group, described the current recruitment scene as a “…cattle call and it’s difficult to discern who is interested in the firm and who is simply interviewing.” Even very well established MBA recruiters such as Goldman Sachs spoke of a “…high level of expectation in comparison to undergraduates.”
However, for the present it seems that demand will continue to rise despite the attitudes of some new MBAs. “The renewed demand from employers after a long period of downturn in the early years of the decade is yet to be reflected in a similar rise in applications to business school where there has been a decline of 20% since 2003,” says Nunzio Quacquarelli, director of the QS World MBA Tour. “The result for potential MBAs is less competition for places at the best schools and a virtual guarantee that those taking up place over the next twelve months will find themselves graduating into a very ‘hot’ job market.”
Full results of the survey are available from Daniela Skacanova on Daniela@qsnetwork.com or at www.topmba.com
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