The Graduate Management Admission Council (GMAC) which owns the Graduate Management Admission Test (GMAT), annually conducts a unique survey titled The Alumni Perspectives Survey. The survey which was first launched by GMAC in 2001, is a longitudinal research study of graduate management education alumni who have agreed to let GMAC follow their career progression since graduation. The objectives of the survey, which is conducted every September, is to track and document alumni employment characteristics both for their first jobs after graduation and their current jobs, alumni employment and compensation trends, their job satisfaction, on-the-job expectations, and impact of their degree on their career development.
Highlights of the study
Importance of interships/work-ex
The study stressed that internships during the MBA course as well as work-experience played a major role in job satisfaction. They were the intervening variables which affected employability, especially among the class of 2011. Graduates, with less than one year of work experience had a higher initial unemployment rate (19%) than those who had three (15%) to six or more years (14%) of work experience prior to enrolling in graduate business schools. The study proved that employers definitely give work-ex higher importance than new hires.
In fact, it is internships and project work that played a key role in determining starting salaries. Alumni who obtained a job through an internship or work project had a higher starting salary (US$86,291), on average, than alumni who found their first job after graduation (US$72,000).
Top Industries Hiring
Similar to employment results for 2010 graduates, the top three industries hiring alumni from the class of 2011 were products and services (21%), finance and accounting (20%), and consulting (17%) firms. There also was little change in employment patterns by industry compared with class of 2010 alumni, except for a greater proportion of class of 2011 graduates finding jobs in the manufacturing sector and fewer in the technology industry.
Two-thirds (66%) of the class of 2011 found jobs in their intended industry. Seven in 10 (70%) survey respondents who found jobs in the finance and accounting sector reported that it was their desired industry when they enrolled in their graduate management program. There were slight variations in alumni efforts to find employment based on their preferred or intended industry. For example, the health care and pharmaceutical industry employed the greatest number of alumni (40%) who indicated this was not their intended industry when they started their degree program.
Increased opportunities in a specific industry was cited as the main reason for switching industries by 53% of alumni. More than one-third of 2011 alumni (37%) switched industries because of increased compensation. This was more typical of part-time (45%) and executive MBA (55%) graduates as compared to full-time two-year (38%) and full-time one-year MBA (27%) graduates.
Among respondents who recently changed careers, the most common reason for seeking a new job was greater compensation, cited by 43 % of alumni. Other factors that contributed to alumni decisions to switch jobs included room for growth, professional development (wanting a broader base of experience), a mismatch with corporate culture, and unchallenging work.
The most common reason, alumni cited for leaving an organization was to earn more money, followed by the lack of opportunity for advancement, and the desire to develop a broader base of experience. The lack of challenging and interesting work was fifth on the list of reasons respondents gave for choosing to leave an organization.
The likelihood to change career direction after graduation varied across world regions. Central Asians (including India) were the most likely to find a job that was different from their intended industry (57%).
Future career potential – main reason cited for necessity of degree
The majority (93%) of class of 2011 alumni said that the job they took after graduation was exactly what they were looking for. Interestingly, when comparing responses from different age groups, individuals ages 28 to 34 (the traditional MBA age group) were more likely than their younger and older cohorts to consider their graduate education degree essential to finding a job.
Alumni who graduated from full-time two-year MBA programs in 2011 reported average starting annual salaries that were among the highest in US$85,000, compared to part-time MBA alumni who reported an average starting annual salary of US$76,000, and full-time one-year MBA alumni, whose median starting annual salary was US$73,203. Full-time two-year and one-year MBAs had the highest additional compensation at US$15,000 and US$12,000 respectively.
Overall, the average starting salary for a class of 2011 graduate who began a new post-degree job was US$75,000. For 82 % of the class of 2011 responding to the survey, starting salaries met or exceeded their expectations. Among alumni whose earnings fell anywhere between the 25th and 50th salary percentiles, only 64% felt their salary met or exceeded their expectations, compared with nearly all (98%) of those who earned above the 75th percentile.
Women closed the gender gap in earnings
Men and women in the key 28- to 34-year-old age group reported earning nearly equal salaries that bore no statistical difference on comparison. Men in this age group who graduated in 2011 earned starting salaries averaging US$87,000; women reported starting salaries averaging US$84,133.
Women appear to have closed the gender gap in earnings for some industries. In the consulting industry, women have surpassed their male 2011 classmates in terms of starting salary by more than 100%. In the manufacturing and technology sectors, women aged 28 to 34 earn 99 % of the average salaries paid to men in their age group, but still lag behind men in industries such as finance and accounting, earning 84 cents on the dollar compared to men.
Passion for work, is why MBA grads are satisfied with their job
MBA grads say that doing work they enjoy is the key driver of overall job satisfaction (36%), followed by compensation (18%), and recognition (15%).
Passion and compensation were both rated highly as important characteristics for an ideal job and were the driving factors of satisfaction in ones current job.
An overwhelming majority, 93 per cent, of alumni responding to this survey reported being engaged (with work) at least some of the time, with only one per cent of alumni saying they were never engaged at all by their work. There were slight differences in employee engagement based on program types, but none based on age or gender. Based on industry of employment, alumni who held consulting or general management positions were the most engaged on the job (both at 94%). Naturally, the extent to which an individual is engaged or energised by his or her work varies depending on the employees level of job satisfaction.
Younger alumni have more work/life balance compared to older alumni
Younger alumni remain more attuned to achieving some measure of work/life balance in their lives than older alumni, findings also observed among recent graduates compared with alumni from the class of 2000. External research also supports the view that younger generations place more emphasis on work/life balance issues than the older alumni.
MBA degree valued high value in comparison to other degrees
The vast majority of alumni rated their graduate management education experience very highly,
regardless of current employment status. Overall, 95 per cent rated the value of the degree as good, excellent, or outstanding. Ninety-six (96%) per cent of alumni with jobs indicated their degree was a good to outstanding value compared to 80 per cent of alumni who were not working.
In retrospect, alumni who graduated from an executive MBA program rated their decision to pursue their MBA the most favourably (98%), followed by full-time MBA alumni (95%), and part-time MBA alumni (95%). Alumni of full-time and executive MBA programs also were more likely to view their degrees as a good-to-outstanding value (96% and 97%, respectively) compared with graduates of any other degree type.
On an average, alumni reported that they recouped one-third of their investment immediately (less than one year) after graduation. After approximately four years, alumni have typically recouped 100 per cent of their full investment. After 10 years post-graduation, alumni have nearly doubled their return on investment. These numbers are even more pronounced for full-time MBA alumni than they are for graduates of other program types, as full-time MBAs reported recouping an average of 91 per cent of their investment compared to 77 per cent reported by executive MBA alumni and 73 per cent reported by part-time alumni across all graduating years (20002011).
When asked whether their ROI met or exceeded their expectations, full-time MBA alumni not surprisingly were more likely to respond in the affirmative than alumni of other program types, having recouped the most for their graduate management education investment.
Alumni faced a range of economic, political, and social issues that make securing and retaining employment more difficult than it was in the past.
Below is an interview with Michelle Sparkman Renz , GMAC director of Research Communications
Some details on the survey?
The Alumni Perspectives Survey sheds light on current economic trends and workplace attitudes affecting alumni from MBA and other business masters programs as they enter the job market and throughout their careers. This 12th annual report includes responses from 4,135 alumni who graduated from the classes of 2000 through 2011, including 963 members of the class of 2011.
Any impact of the economic slowdown?
More importantly, three out of four alumni from the class of 2011 with jobs report they could not have obtained their job without their graduate management education and 93% of the class of 2011 alumni employed at the time of the survey had found the job they were looking for. Also, salary expectations were more than met for a large majority of the class of 2011. In fact, four out of five said their salary met or exceeded their expectations.
What were the biggest changes with regards to salaries, job satisfaction and gender expectations?
Among all survey respondents (classes of 2000 to 2011), 94 per cent were employed at the time of the survey87% worked for an employer and 7% were self-employed.
Alumni with a degree from a full-time MBA program, regardless of graduation year, reported earning an annual base salary of US$95,000 with their current employer. Part-time MBA alumni (across all graduation years) reported a median annual base salary of US$91,000 with their current employer, and executive MBA alumni reported earning a median annual base salary of US$125,000 with their current employer.
Women across all graduating classes (2000 to 2011) who earned a full-time MBA degree drew starting salaries that were on average 85% of the earnings their male counterparts typically received. The earnings gap was even wider for women who graduated from part-time MBA programs (80% of mens salaries). The greatest level of pay parity was seen among graduates of executive MBA programs, with women earning 92% of the average salary paid to men graduating from these programs.
Overall, 80 per cent of survey respondents indicated they felt very or somewhat satisfied with their current job. This figure is on par with findings from a 2010 Society for Human Resource Management (SHRM) study of employee satisfaction that noted 84 per cent of all employees were somewhat or very satisfied.
Regarding views about gender equality in the workplace, overall three out of four alumni (76%) agreed that men and women share equal opportunities in the workplace. On a regional basis, however, this finding varied, and in fact, respondents from Central Asia showed the greatest agreement between genders (84% for men, 73% for women) on gender equality in the workplace. The greatest disparity in views was in the United States with a 31% difference between men and women on gender equality (85% of men agree there is and only 54% of women think so.)
What do the overall findings signal?
That graduates have a high degree of satisfaction with their graduate management degree and that they place a high value on their education (four out of five alumni reported that having a graduate management degree offers greater job stability in a still weak economy). In addition, nine out of 10 alumni felt that their graduate management education prepared them for their chosen careers.
The return on investment is also strong as alumni from all years typically recouped one-third of their financial investment in their degree within the first year after graduation and 100 per cent of their investment in their degree after four years.
Inputs by Collin Furtado