What Trends Are Shaping Business Education?
- Women now make up 33 percent of EMBA enrollments, the highest to date.
- U.S. business schools saw decreased numbers of domestic MBA applications, perhaps because abundant job openings have made prospective students view additional training as unnecessary.
- A majority of students want business curricula to address global challenges; responsible management; diversity, equity, and inclusion; and ethical leadership.
Business schools continue to report increased enrollments in their full-time MBA programs. That said, the market for graduate management education seems to be in transition, as traditional full-time MBA programs continue to lose ground to more flexible MBA and specialized master’s programs. According to AACSB’s 2021 Business School Data Guide, AACSB member schools have reported a 19 percent increase in enrollments to their specialized master’s programs, compared to a more modest 13 percent increase in enrollments to their general MBA programs.
The market’s gradual shift toward specialized and shorter programs is one of many indications that student behaviors and educational preferences are evolving. But how has the pandemic affected students’ postgraduate prospects and plans? And, more important, what do current and prospective business students ultimately want from their business educations?
Several organizations have released new reports that offer data that provide answers to these questions, at least in part. While each sheds light on different aspects of the market for graduate management education, their collective results provide business school leaders with a glimpse into where the market stands today—and where it might be headed.
MBAs Received—and Accepted—Fewer Offers
The MBA Career Services & Employer Alliance (MBA CSEA), a global membership association of graduate business career services professionals and employers, recently surveyed its member schools about full-time employment rates for MBA graduates in 2019 and 2020. The organization released its early interpretation of the data in January, and it plans to release a more detailed analysis later this spring.
In all, 114 MBA CSEA member schools submitted data for their 2019 graduates (of whom 14 percent lived outside the United States), and 117 submitted data for their 2020 graduates (of whom 16 percent lived outside the United States). This group reported very little change in the number of full-time MBA graduates who planned to seek employment after graduation—83.2 percent in 2019 and 82.9 percent in 2020.
Among graduates with permanent work authorization in the countries where they had studied, the percentage who had received job offers by graduation decreased from 81.7 percent in 2019 to 75.4 percent in 2020.
That said, the pandemic affected overall hiring patterns. The number of graduates who had received their first offers of employment by graduation decreased by about 5 percent—from 77.5 percent in 2019 to 72.9 percent in 2020. Similarly, the percentage of graduates who had not received a job offer by three months after graduation increased from 8.5 percent in 2019 to 12.9 percent in 2020.
International students were especially affected. Among graduates with permanent work authorization in the countries where they had studied, the percentage who had received job offers by graduation decreased from 81.7 percent in 2019 to 75.4 percent in 2020.
The MBA CSEA saw the same trends in the number of students accepting job offers. In 2019, only 8.5 percent of graduates surveyed reported not accepting job offers by three months after graduation. In 2020, that number increased to 14 percent.
While job offers decreased as a result of the pandemic, salaries did not. The mean compensation for full-time MBA graduates increased by 3.5 percent, from 119,839 USD in 2019 to 124,072 USD in 2020. Salaries in the hospitality industry increased the most—by 16.18 percent—between 2019 and 2020. MBA graduates going into nonprofit fields also saw a 9.39 percent increase. At the same time, the mean salary in transportation and logistics was most negatively impacted by the pandemic, decreasing by 7.2 percent.
Respondents noted that school-sourced internships were the leading source of job offers for MBA graduates: The number of graduates who converted their school-sourced internships into job offers increased from 23 percent in 2019 to 25.9 percent in 2020.
This trend might not hold for the Class of 2021. The MBA CSEA points out that “many summer 2020 internship programs were reduced or eliminated” during the pandemic. That means that MBA CSEA’s next report is likely to show that 2021 graduates did not have as many opportunities to turn internships to job offers as their 2020 counterparts.
EMBAs Embrace Virtual Delivery
EMBA programs saw their applications increase by 17 percent from 2020 to 2021, according to the Executive MBA Council’s 2021 EMBAC Membership Program Survey. EMBAC represents 200 colleges and universities that administer nearly 300 EMBA programs in more than 30 countries. But the increase in EMBA applications did not lead to increased enrollments: The average class size of EMBA programs dipped from 47 in 2020 to 44 in 2021. Women’s participation in those cohorts, however, ticked up to 33 percent of EMBA enrollments in 2021 (from 30 percent in 2017), representing the highest level to date.
The last two years also have been a time of technological advancement and adaptation for EMBA programs. Of the 84 percent of EMBAC’s membership that completed the survey, those reporting that they deliver some portion of their EMBA programs via distance learning has increased by more than 30 points over the last two years. In 2021, 88.6 percent of EMBA programs reported offering some form of distance learning, up from 73.9 percent in 2020 and 55.3 percent in 2019.
Additionally, 47.6 percent of schools noted that they had changed the way they delivered their EMBA programs in 2021, compared to just 30.3 percent in 2020. This jump is likely due to an increase in the number of online, blended, and hybrid options that schools are offering to students. “Clearly, the global pandemic is driving an acceleration in the use of technology,” says Michael Desiderio, EMBAC’s executive director.
The ‘Great Resignation’ Is Having an Effect
QS Quacquarelli Symonds, a research firm focused on higher and graduate management education, released results of its inaugural survey of business school admissions officers. Among the 70 respondents to the survey, 52 percent said that they expected their schools to receive fewer applications from U.S.-based prospective MBA students in 2022.
Part of their prediction was based on current test-taking trends. Although the pandemic has certainly affected test-taking behaviors, the number of test takers in the U.S. has been decreasing steadily since 2017. According to data from the Graduate Management Admission Council, U.S. citizens took 38,509 GMAT exams in 2021, the lowest number in the last five years—that’s down from 79,746 exams in 2017. (Another factor that could be driving this trend is that a growing number of U.S. schools have become “test-optional” or have eliminated test requirements altogether.)
In the U.S., 52 percent of admissions officers expect fewer applications from U.S.-based prospective MBA students in 2022. But 90 percent expect international applications to stay stable or increase.
At the same time, U.S. admissions officers reported year-on-year growth in applications from India, Africa, and Latin America. Ninety percent of respondents said they expected international applications to stay stable or increase for 2022.
One cause of decreasing domestic applications to U.S.-based MBA programs could be the large number of job openings in the country, says Nunzio Quacquarelli, founder and CEO of QS Quacquarelli Symonds. “The ‘great resignation’ in the U.S. created a buoyancy in job vacancies, presenting opportunities for career mobility for aspiring managers,” he says. “As a result, potential MBA candidates in North America are currently thinking ‘job-first’ and not considering taking time out of their careers to study.”
Admissions officers at European business schools are more optimistic about overall application trends. The decrease in GMAT test-taking by citizens in Western European nations was less dramatic than in the U.S., from 18,569 in 2017 to 15,185 in 2020. Moreover, the vast majority of European admissions officers—89 percent—expect to receive as many applications to their MBA programs in 2022 as they did in 2021, or slightly more.
There also has been a slight uptick in the numbers of students from the U.S. choosing to enroll in European business schools—particularly via online programs. According to QS Quacquarelli Symonds’ 2021 data, European schools reported that, on average, U.S. students made up 5 percent of their full-time MBA cohorts in 2020, compared to 3 percent in 2019. In addition, 5.6 percent of online MBA students at the responding European schools were from the U.S.
The numbers are especially high for certain schools in the United Kingdom. For example, Imperial College Business School reported that 8 percent of students in its online MBA program were from the U.S. At the University College London (UCL), that number was 12 percent. Financial concerns are no small reason for this increase, says James Berry, director of UCL’s Online MBA. Simply put, says Berry, “Studying in Europe compared to the U.S. is less expensive.”
Students Want to Tackle Global Challenges
The topics that students want to study most are heavily influenced by technology and a desire to make a positive impact. That’s according to the 2022 Tomorrow’s MBA report, which is based on a survey of 1,129 prospective students from 25 countries about what they want most from their MBA programs. The report was jointly published by CarringtonCrisp, a London-based consulting firm focused on higher education, and the European Foundation for Management Development.
Among respondents, 31 percent indicated that they viewed the study of artificial intelligence as valuable to their educations. As a desired topic of study, AI was second only to the more general subject of business and the financial environment. In addition to traditional disciplines such as finance, business law, and economics, the majority of prospective MBA students also want their programs to teach business as a means to serve society. They said they want to their courses to address subjects such as global challenges (72 percent); responsible management (71 percent); diversity, equity, and inclusion (70 percent); and ethical leadership (69 percent). Seventy-two percent of respondents also want to complete individually driven projects as a significant part of their programs.
When it comes to their reasons for pursuing MBA education, the largest percentage of prospective MBA students pointed to the desire to earn more money (29 percent), followed by a desire to improve employability (27 percent) and build professional networks (25 percent). However, the results also showed an increase in the number of students who want to become entrepreneurs (22 percent). That increase could be one outcome of people reevaluating their career trajectories during the pandemic.
These results indicate that the pandemic has sped up trends that business schools were seeing before the pandemic hit, says Andrew Crisp, author of the Tomorrow’s MBA report. “Today’s students want flexibility, blended study, and teaching that is highly topical to current challenges for business,” he says. “Traditional providers offering new approaches to study and alternative providers are likely to be the biggest beneficiaries.”
Students Are Open to Different Formats
While 58 percent of respondents to the Tomorrow’s MBA survey said they still prefer to enroll in traditional full-time on-campus MBA programs, more are open to other formats. For instance, 70 percent said they are interested in taking separate modules over several years. This same percentage said that they would be interested in enrolling in MBA programs that also provided low-cost learning opportunities for the next 10 years after they graduated.
Among prospective MBA students surveyed, 39 percent would consider taking programs from alternative providers, while 57 percent agreed they could choose educational options other than MBA programs to further their careers.
Likewise, 73 percent indicated that rather than attending lectures and collaborating on virtual projects with other students at fixed times, they would prefer to study at their own pace. And 71 percent said they were interested in switching between on-campus and online study within the same program, as it suits their schedules.
In fact, more than a third of respondents, 39 percent, would consider pursing their educations through alternative providers such as The Power MBA, Coursera, and Quantic. More than half, 57 percent, agreed that they could choose educational options other than MBA programs to further their careers.
Responding to an Evolving Market
Taken together, these surveys describe a market where current and prospective business students want more flexible educational options. These results also indicate that students are increasingly seeking out graduate management education on their own terms.“Business schools need to rethink their MBA offer,” says Crisp. “Our research shows that people now want a lifelong learning journey. Having an MBA that doesn’t evolve, even at a leading global business school, is not a recipe for sustainable success.”