Tag Archives: GMAC

Today’s MBA Applicants Know What They Want

The Graduate Management Admission Council (GMAC) has released its 2016 mba.com Prospective Students Survey Report, which shows that business school candidates today consider applying to fewer program types and are more focused on a particular …

The Graduate Management Admission Council (GMAC) has released its 2016 mba.com Prospective Students Survey Report, which shows that business school candidates today consider applying to fewer program types and are more focused on a particular postgraduate career path.

On average, prospective students considered 2.8 program types in 2015, down from 3.1 in 2014. For their postgraduate careers, 71% of those surveyed cited a single industry of interest, compared with 58% in 2014.

GMAc surveyIn addition, 61% of prospective students cited a single job function of interest, compared with 46% in 2014. The economy may play a role in this phenomenon as prospective students may perceive it to be easier to go after their “dream job” in this market compared with the post-recession years.

GMAC’s mba.com Prospective Students Survey, conducted throughout 2015, explores the global business school pipeline from the candidates’ points of view — analyzing the motivations, intended career outcomes and program choices shared by more than 10,000 individuals worldwide who responded.

“Each year graduate business programs set admission goals to engage students from around the world who are the most likely to succeed in their classrooms,” says Bob Alig, GMAC’s executive vice president for school products. “The insights provided within this survey report are timely and actionable and a valuable resource to schools seeking to grow their candidate pipelines.”

Additional key findings within the report focus on preferred program types, school selection criteria, career aspirations, timing, and social media.

Greater Interest in Specialized Business Master’s Programs: Globally, 50% of prospective students are considering only MBA programs, and slightly more than a quarter, or 28% , are considering both MBA and specialized business master’s programs.

One-fourth (23%) are considering only specialized business master’s programs, such as Master of Accounting or Master of Finance, which represents an increase since 2009, when just 15% of candidates were considering only specialized master’s programs.

In Western Europe, however, the pipeline has notably shifted toward specialized (pre-experience) business master’s programs, especially within the past seven years. In 2009, 49% of prospective students were considering only MBA programs and 22% were considering only specialized business master’s programs. In 2015, 36% were considering only MBA programs and 45% were considering only specialized master’s programs.

Prospective Students Seek Blend of Classroom and Online Learning: Most candidates considering graduate management education seek a blend of classroom instruction and online learning, regardless of program type preferred.

GMAC survey

According to the survey results, even candidates who prefer to enroll in an online MBA program still expect 10% of their course instruction to be delivered in the classroom to allow for networking and experiential learning opportunities. Those contemplating a full-time two-year MBA expect to experience 86% of their coursework in a classroom setting and want 14% of their courses delivered online.

Timing of Application Submission: Prospective students begin forming their short lists of schools one year prior to application submission, on average. A specific event or circumstance often triggers a prospective student’s consideration of earning a graduate management degree.

Most common events include: seeking a new job but lacking skills to be competitive for the positions sought (27%), reaching a plateau at work (17%), and lacking knowledge to do a job (17%).

Social Media Use Is Pervasive: Almost all (96%) prospective students use social media. Of those that do, 67% use it for activities related to the pursuit of graduate management education, such as getting program information, learning about upcoming events, connecting with current students, alumni, or faculty, and researching graduate management education.

Facebook and LinkedIn are the most popular social media sites used globally, with the exception of China, where the instant messaging platform Tencent QQ is most popular.

“For the first time, members of Generation Z are included in our analysis,” says Alig. “We found that Millennial and Gen Z candidates are more likely than past generations to have ‘stretch schools’ on their short lists. All things considered, these candidates want to get into the best program possible — an indication of their high level of aspiration.”

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Weigh if an MBA Makes Financial Sense

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com An MBA is a long-term financial investment, so here are three questions to ask when trying to decide whether going to business school …

why MBA

Consider if an MBA will lead to a significant salary bump.

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com

An MBA is a long-term financial investment, so here are three questions to ask when trying to decide whether going to business school makes financial sense: Will the degree result in a significant salary bump? Will the degree help me switch careers? Will the degree help me get to a leadership position faster?

While it can be daunting to pay hundreds of thousands of dollars to earn an MBA, most business school graduates experience a substantial salary increase. The vast majority report having greater job satisfaction and the ability to advance quickly and, therefore, earn more in shorter time.

The Graduate Management Admission Council, which administers the GMAT exam, gathered input from b-school alumni worldwide in late fall 2015 to shed light on the issue of return on investment for its “2016 Alumni Perspectives Survey Report“, released in February.

Among the 14,279 business school alumni who participated in the survey, 75 percent say their graduate management education was financially rewarding, and 93 percent say they would pursue the degree again if given the choice. Although graduates considered three main areas when assessing their return on investment – expansion of knowledge/skills, personal development, salary increase – we’ll stick to just the financial aspect for this post.

Calculating the return on investment requires a simple formula. It’s the return acquired from an investment minus the cost of the investment, divided by the cost of the investment. Students of two-year MBA programs typically have the largest investment expense because they miss two years of employment. They need to recoup the cost of the MBA degree plus the opportunity cost in order to get a positive return on their investment.

Let’s consider the applicant who currently earns $70,000 a year and has landed a seat at the University of Chicago Booth School of Business. Tuition and expenses for the two-year MBA program at Booth will be about $200,000. She earns $15,000 during her summer internship, and her first year post-MBA salary in management consulting is $160,000 plus a signing bonus of $25,000.

This student’s opportunity cost – $143,500 in salary over two years – plus out-of-pocket expenses for tuition, etc. totaling $200,000, minus internship earnings, equals a total investment of $328,500. If she had not gone to business school and earned a typical annual salary increase of 5 percent, five years later she would be bringing home just more than $85,000 annually and would have earned $386,795 during that five years.

If she does the MBA, forgoes salary for two years, and earns at minimum a 5 percent increase over starting salary annually, she will earn $185,000 her first year and at least $529,400 for those same five years. More often, periodic bonuses and larger-than-average salary bumps mean that alumni frequently recoup their business school investment less than four years after graduation, GMAC reports.

GMAC found that more than 20 years after graduation, business school alumni earn a median cumulative base salary of $2.5 million. This is $500,000 more in cumulative base salary than they would earn if they did not go to graduate business school and consistently received 5 percent annual salary increases, and nearly $1 million more than if they did not go to business school and consistently received 3 percent annual salary increases over 20 years, the GMAC report says.

Prospective students should consider payback time with projected cumulative growth, and average growth rate, when looking at return on investment as a motivating factor for pursuing an MBA. But keep in mind, the value of the MBA degree varies widely depending on your post-graduation plans, as well as the brand ?of the business school where you earn the degree.

When it comes to deciding whether business school makes sense for you, remember that the choices you make – ranging from the cost of the city you decide to live in, the field you move into, the school you choose – will all impact your financial return on investment.

Your personal return on investment, however, is something quite different. Having the ability to transition into nonprofit PR marketing or some other lower-paying but more personally rewarding job may be well worth it – and that kind of personal satisfaction cannot be measured in dollars and cents.

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MBA Remains a Strong Value Proposition, Says GMAC Survey

The return on investment, or ROI, of a full-time two-year MBA fluctuates in accordance with prevailing economic conditions, yet it has remained positive three years after graduation in 19 of the past 20 years, according …

The return on investment, or ROI, of a full-time two-year MBA fluctuates in accordance with prevailing economic conditions, yet it has remained positive three years after graduation in 19 of the past 20 years, according to findings in the Graduate Management Admission Council‘s (GMAC) 2016 Alumni Perspectives Survey Report published today.

GMAC_AlumniPerspective_366x275BoostedCareerOf the more than 14,000 alumni surveyed, a vast majority said their education was personally (93 percent of respondents), professionally (89 percent), and financially (75 percent) rewarding. More than 4 in 5 alumni expressed satisfaction with their education.

“People make the decision to invest in a graduate management education to meet a variety of different aspirations and needs, and the vast majority are enthusiastic about their investment and inspired by their experience,” said Bob Alig, GMAC’s executive vice president for school products.

“Business schools enable students to develop the knowledge, skills and abilities needed for career success and to achieve personal and financial fulfillment,” he added.

Financial Rewards

GMAC’s survey shows the dollar value such a degree can bring. Business school alumni earn a median of US$2.5 million in cumulative base salary over 20 years following graduation.

This is a half-million dollars more in median cumulative base salary than they would earn if they did not go to business school and had consistently earned 5 percent annual salary increases, and a million dollars more than if they did not go to business school and had consistently earned 3 percent annual salary increases.

Alumni — on average — recoup their b-school investment within 4 years after graduation depending on the type of program attended.

Survey findings also reveal that women highly value their graduate management education with 96 percent rating their degree as a good to outstanding value. They tend to receive an initial boost in salary post-degree that is similar to men — US$20,000 on average.

Nevertheless, the gender pay gap persists among business school alumni; most likely a continuation of the trend of lower salaries women earned prior to entering business school.

Professional Rewards

Graduate business degrees unlock employment opportunities in a variety of industries and job functions. They also help elevate many alumni to higher job levels in their organizations. Approximately 3 in 4 alumni (73 percent) say their degree resulted in faster career advancement. Two-thirds (68 percent) of alumni are satisfied with their current job and employer.

Satisfaction and total hours worked weekly both tend to increase as alumni move up the corporate ladder. And, a majority of alumni say their graduate management education helped them to develop their leadership potential (80 percent) and grow their professional networks (70 percent).

Nine in 10 (93 percent) alumni say they would pursue their graduate management education again. In addition, alumni are extremely likely to recommend their program to peers. Overall, the net promoter score, or NPS — a widely used metric of customer loyalty — is strong among graduates of all types of business programs.

The NPS among all graduate business programs combined is plus 45 on the net promoter scale. (An NPS higher than 0 is considered good; an NPS of plus 50 is excellent.)

Personal Rewards

Business schools enable students to develop the knowledge, skills and abilities that in turn enhance their personal well-being. Two in 3 (65 percent) survey respondents noted improved job satisfaction and 50 percent believed business school prepared them for managing work-life balance.

“The findings of this survey are further evidence that a graduate management education delivers strong personal, professional and financial value to alumni,” said Alig. “The ROI numbers illustrate that a business degree is an efficient investment in terms of recouping costs and an effective asset for accelerating alumni careers.”

GMAC conducted the Alumni Perspectives Survey in October and November 2015. The 14,279 alumni who participated in this survey represent more than 275 graduate business programs at 70 universities in 20 locations worldwide that partnered with GMAC in this study.

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Sunny Job Outlook for 2016 MBA Grads

The Graduate Management Admission Council (GMAC) has released the findings of its 2015 Year-End Poll of Employers, which reveal solid 2015 hiring numbers and robust 2016 hiring projections that reflect a continued healthy demand for …

The Graduate Management Admission Council (GMAC) has released the findings of its 2015 Year-End Poll of Employers, which reveal solid 2015 hiring numbers and robust 2016 hiring projections that reflect a continued healthy demand for recent graduates of master-level business programs — especially MBAs.

Youre-Hired2Among the survey’s other findings: 96% of responding employers agree that hiring business school graduates creates value for their companies and 68% agree that recruiting graduates of MBA and business master’s programs is a priority in their company’s hiring plans.

“Employer demand for graduate management talent is projected to remain strong in 2016 for MBAs and other master’s-level business candidates,” says Bob Alig, GMAC’s executive vice president for school products. “Recent graduates from business and management programs should see high demand for their skills because employers understand that they are valuable assets to their organizations.”

Findings in this report represent survey responses from 179 recruiters from across 159 companies of varying sizes and industry sectors located in 31 countries or regions worldwide. A majority of the employers participating in this year’s survey indicate that they will be striving towards improving performance and productivity, expanding their customer base, and launching new products and services and less focused on overcoming economic challenges and cutting costs than in recent years.

In addition, 73% of responding employers plan to offer internships to MBA candidates in 2016 — GMAC surveys have indicated that internships remain one of the most successful ways for master’s-level business school graduates to receive job offers. Ninety-two percent of the responding employers that offered MBA internships in 2015 plan to increase (26%) or maintain (66%) the number of MBA internship openings in 2016.

These positive developments echo what recent business school graduates say about the value of their degrees. In a September 2015 GMAC poll of recent graduates, a vast majority of alumni from the class of 2015 said their graduate management degree helped prepare them for the job market.

In fact, three to four months after graduation, full-time two-year MBA alumni in the class of 2015 reported an employment rate of 91%– five percentage points greater than the class of 2014 reported in September 2014.

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ROI of an MBA

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GMAC Releases 2015 B-School Application Trends

The Graduate Management Admission Council (GMAC) has released the findings of its 2015 Application Trends Survey, which show the majority of full-time MBA programs — in both two-year and one-year formats — report increases in …

The Graduate Management Admission Council (GMAC) has released the findings of its 2015 Application Trends Survey, which show the majority of full-time MBA programs — in both two-year and one-year formats — report increases in application volume compared with last year and 10 years ago.

application trends

Among full-time two-year MBA programs, 57% report increased application volume this year. For full-time one-year programs, 2015 marks a notable improvement: 51% of programs report application volume increases, compared with just 37% that reported growth last year.

Both program formats are performing better compared with 10 years ago — 60% of full-time two-year and 53% of full-time one-year MBA programs indicate they received more applications this year than in 2005.

“This is positive news and reflects a strong full-time MBA market,” says Bob Alig, GMAC’s executive vice president for school products.

“The full-time MBA continues to be a sought after credential because graduates consistently see a high return on their investment — not only in terms of earnings, but also in job satisfaction and personal fulfillment.”

The findings from GMAC’s 16th annual Application Trends Survey show a positive turnaround in the domestic market for U.S.-based, full-time two-year MBA programs, as a majority (59%) report year-on-year domestic application growth — a level not attained since 2009. Domestic candidates still account for less than half of the applicant pool for these U.S. MBA programs — 45% in 2015.

This year’s report also reveals that the representation of women in program applicant pools has increased 3 to 8 percentage points over the last five years for all program types analyzed in the report, with the lone exception of Master of Accounting, which continues to maintain its majority level of female representation (57%).

More than half of the following program formats report growing application volume for women in 2015: full-time two-year MBA (51% of programs), full-time one-year MBA (50%), executive MBA (50%), online MBA (55%), Master in Management (55%), Master of Finance (56%), and Master of Marketing and Communications (60%).

“GMAC is pleased to see that business schools’ efforts to increase the number of applications from women seem to be succeeding,” says Alig. The report shows that targeted outreach for women candidates is conducted by 67% of full-time two-year MBA programs, 41% of part-time MBA programs, and 51% of executive MBA programs.

Data for the 2015 Application Trends Survey were collected from a total of 641 graduate business programs located at 306 universities worldwide.

To download the full survey report, please visit www.gmac.com/applicationtrends.

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B-School Alumni Report Boost to Earning Power, Career Trajectory

Business school alumni earn increased compensation, exercise enhanced purchasing power, consistently climb to the executive ranks, and give overall high marks to the value of their education in driving their professional success, according to new …

Business school alumni earn increased compensation, exercise enhanced purchasing power, consistently climb to the executive ranks, and give overall high marks to the value of their education in driving their professional success, according to new research findings from more than 12,000 graduate business school alumni surveyed by the Graduate Management Admission Council (GMAC).

The results of the 2015 Alumni Perspectives Survey Report offer a global snapshot of employment and career progression for graduate business school alumni representing the classes of 1959 through 2014. Graduates also gave positive reviews to their business school’s alumni association, with a majority saying their engagement with these associations has contributed to their success.

Conducted in October and November of 2014, the survey represents alumni from more than 230 graduate business programs at 71 universities in 16 locations across the globe. It is the latest in GMAC’s survey report series to provide data showing that an MBA or other graduate management degree, such as a Master in Management, Accounting or Finance, is a strong educational investment available to students in today’s highly competitive career marketplace.

In fact, in the survey, 95 percent of alumni rated their graduate management education as a good to outstanding value, and 93 percent would recommend their graduate business program to others.

Additional key findings include:

Ninety percent of alumni credit graduate management education with increasing their earning power.

In both developed and developing economies, graduate management alumni exercise enhanced purchasing power. For the first time, GMAC offers a comparison of earnings for graduate management alumni relative to others. A global analysis of alumni salaries by work location in relation to GDP and purchasing-power-parity per capita (GDP PPP) uncovers that business school alumni have purchasing power 1.6 to 6.8 times that of the average resident of the country where they work.

2015_GMATBLOG_purchasingPOWER_680wBusiness school alumni career trajectories show consistency in reaching higher levels of their organizations regardless of graduation year.The majority of alumni held mid-level positions one year after earning their degree.

Five years after graduation, the majority of business school alumni are in senior-level positions or higher, and at 10 years, one in four alumni are in executive-level positions and 5 percent are in the “c-suite” (e.g., CEO, CFO, COO). Graduates who have made it to the c-suite are most likely of all alumni to say they use the knowledge, skills and abilities learned in graduate business school on the job.

GMAC Alumni Earnings 2015

B-school alumni rise fast in the workplace and have high levels of job satisfaction.
The majority of graduate business school alumni, working across all occupational levels from entry-level positions to c-suite, credit their graduate management education for preparing them for leadership positions, as well as for accelerating the pace of their career advancement. In addition, they report high levels of job satisfaction.

Four in five alumni, or 84 percent, say their graduate management education offered opportunities for quicker career advancement.

For the first-time, this report measured entrepreneurial behavior in the workplace — defined through the traits of innovativeness, proactiveness and social risk taking — factors associated with alumni career success. Analysis shows c-suite and self-employed alumni describe themselves with these attributes to a greater extent than alumni at all other job levels.

Fifty-nine percent of alumni belong to their business school’s alumni association and tend to rate their level of career success higher than those who are not members.
The additional services alumni seek from their alma mater include courses and seminars, access to career services and more networking events.

“Graduate management degree-holders consistently tell GMAC their education is a solid investment and a spur to personal, professional and financial achievement, even in up-and-down economies,” says Sangeet Chowfla, president and CEO of GMAC. “A graduate management education isn’t just a degree, it’s a career catalyst.”

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