What is the impact of COVID-19 on skill demand, hiring projections, and salary trends for MBA and Business Master’s graduates? The GMAC™ annual report based on the survey of corporate recruiters suggests that although graduate management talent is not immune to the impact of the pandemic, employers remain confident about their skills. This confidence is noticeable in the hiring projections, which are likely to rebound in 2021 and median salaries, which are holding at $105,000 for MBA graduates.
The global economic outlook reversed its course to pessimism and uncertainty in a matter of months due to COVID-19. This shift has also reset the demand and supply of global talent. GMAC’s annual survey of corporate recruiters gauges trends and insights related to skill demand, hiring projections, and salary trends of graduate management talent. The 2020 research focuses on the impact of COVID-19 for MBA and business master’s graduates by comparing the data collected over two waves. The survey, administered in partnership with the MBA CSEA, EFMD, and Highered and career services offices at participating graduate business schools, received 712 responses from corporate recruiters in Wave I (February 17-March 17, 2020) and 232 responses in Wave II (June 17-July 17, 2020).
Access the webinar distilling the highlights of the report and discussing the findings with a panel of career services professionals and corporate recruiters.
Hiring projections: The optimism of rebound in 2021
It is well-established that the global financial crisis of 2008-09 resulted in a significant loss of jobs at all levels. In subsequent years, as the economies recovered, many organizations faced intense competition for attracting and retaining talent. As economies look to rebound from the current crisis, employers seem to be cautiously optimistic in maintaining their commitment to top talent, and report they are more likely to adopt a “wait and see” approach. Only 8 percent of respondents note that they are rescinding job offers for graduate management talent from the class of 2020, and four times as many report delaying start dates.
Most recruiters (61%) report plans to keep their headcount stable in 2020, compared to 17 percent who will decrease headcounts and 22 percent who plan to increase it. Furthermore, the hiring projections for 2021 indicate prospects of a recovery in demand for MBA and business master’s candidates. In Wave II, the proportion of recruiters reporting plans to hire MBAs in 2021 (89%) is at a similar level as Wave I (92%). Before COVID-19, 92 percent of firms expressed intent to hire MBA graduates in 2020, a figure that dipped to 77 percent in Wave II. However, when asked about hiring plans for 2021, 89 percent of employers said they plan to hire MBA graduates.
Skill demand: Stability in times of disruption
One of the key takeaways from the research is that even as the pandemic continues to shake the global economies and shape the future of work, the confidence of corporate recruiters in the skills and abilities of graduate management talent remains strong.
During Wave I, 90 percent of respondents indicated they were highly confident or confident about the ability of graduate business schools to prepare students to be successful in their organization (see chart). In Wave II, this number has slightly reduced to 87 percent. To put this unwavering confidence in context, we should look at the shift in the perception of the global economy. In Wave I, only 33 percent of respondents described the state of the global economy as very strong or strong as compared to just 7 percent in Wave II. This suggests that even in a weak global economy, confidence in a business school’s ability to prepare future managerial talent remains steady.
The top three reasons recruiters report about confidence in b-school’s ability to prepare graduates to be successful in their organization were strategic thinking, communication skills, and. versatility. These reasons remained stable between Wave I and Wave II as the source of confidence for corporate recruiters.
Salary trends: Premium endures under pressure
In the pandemic context, compensation is under pressure at all levels as companies focus on operational sustainability, and the demand and supply of talent shifts in favor of employers. And yet, for the class of 2020, most recruiters are indicating plans to honor their compensation promises, and only a few are resorting to a reduction in salaries, benefits, or bonuses.
Also, the compensation premium business management graduates command is holding steady. At $115,000, the median salary of MBAs is 75 percent more than those with a bachelor’s degree in Wave I, which slightly decreased to $105,000 in Wave II. The compensation premium is even more apparent for Fortune 100 companies or the big-three industries that hire the most MBAs—consulting, finance, and technology. For example, at $145,000, the median salary of MBAs in the consulting industry is twice that of bachelor’s degree holders in Wave I. In sum, the responses of the corporate recruiters suggest that salaries for graduate management talent are relatively less likely to soften during the pandemic.
MBA and business master’s graduates are not immune to the scale and scope of the uncertainty caused by the pandemic. However, findings from the 2020 Corporate Recruiters Survey suggests that employers remain confident about the value of graduate management talent, which is also apparent in their relatively steady hiring projections and salary trends. In sum, the skills and abilities that graduate management talent gains through their business school experiences make them a valuable asset in supporting organizational recovery and resiliency.