Choosing an MBA: What Applicants Value
Whatever you're doing, establishing your expectations early helps lead to coherent, meaningful progress and goal setting. This applies to both faculty and staff at MBA programs, hoping to meet (or exceed) student expectations, and potential applicants ensuring they're pursuing their goals in a reasonable manner. A recent survey of MBA program applicants by AIGAC Graduate Admissions Consulting and Huron Education was completed with this aim in mind. And in an effort to expand awareness of why students choose the MBA programs they do, and what they're expecting out of their graduate program, we're laying out some of the most interesting trends here.
What Information Applicants Trust
The building blocks for MBA applicant expectations and program choice are the channels through which information about programs are presented. The most important of which include (in descending order of importance): school or program websites, rankings, school alumni or current students, school visits (tours), MBA resource websites, recruiting events, family or friends, interactions with admissions consultants, paper brochures, and work colleagues. In the 2014 Applicant Survey mentioned above, school and program websites were viewed as nearly twice as important as rankings, which was viewed as roughly as important as school alumni or current students. These three factors accounted for roughly half of important information sources for applicants making decisions where to matriculate.
Though school websites are the most important source of information for applicants (and often the only source for certain types of information), it's in conjunction with a vibrant reporting community that verifiable facts, marketing ploys, and misrepresented facts are separated. Rapid jumps in rankings cue the community to re-examine whether school submitted data is accurate, and often only ranking organizations compile survey data on a wide array of schools. As far as applicant trust of MBA rankings, US News and Businessweek are virtually tied, with 57%+ applicants saying they referred to either in their B-school research. Financial Times comes in a close third place with 52% of applicants consulting the resource, followed by The Economist, Forbes, and The Wall Street Journal. Though Forbes comes in as the 6th most consulted resource, applicant trust in the Forbes rankings has been one of the fastest growing over the last 5 years.
Another notable trend in information sources is that international MBA students rely on rankings in a dramatically different way. Financial Times comes in with over 60% of applicants abroad consulting the ranking, followed by BusinessWeek, the Economist, US News and Forbes. Applicants who used admission consultants (or counselors) also present different priorities in information sources, relying on information from school alumni and/or current students nearly twice as much as applicants who didn't consult admissions consultants. This points to the perceived value of meetings with alumni or current students for applicants if they obtain school information through a channel that can place them in contact with said school community members.
Motives: Why Applicants Choose MBA Programs
So what are the most meaningful program components that applicants take from information sources? When looking at applicants overall, the most important program factors include (in descending order): reputation, impact on career, location, school culture, and rankings. This is true for male and female applicants, with one exception, female applicants value location more than school culture and rankings, while male applicants trust rankings more than location and school culture. This mirrors the slight difference in views on the importance of school reputation on school choice, a factor male applicants are slightly more likely to value.
While not all rankings focus on outcomes to equal extent, and not all schools track outcome data to the same level of detail, it's important to remember that MBA programs are a means to an end: predictable and good outcomes. Many students wish to switch industries with their new degree. Over half of industry-switchers wish to get a job consulting after their MBA. The following ranked industries that students wish to switch to include (in descending order): finance/accounting, technology, products/services, Gov't/nonprofits, energy/utilities, healthcare, and manufacturing. Despite aspirations to move into consulting, most graduates do not make this move, with only 28% of graduates moving on to work in consulting.
A subset of MBA students plan to start their own businesses or become self-employed upon completion of their program. The following characteristics are correlated with the desire to become self-employed: foreign resident status, being male, and not attending a leading MBA program. The final correlate most likely has to do with the availability of other lucrative paths for leading program graduates. When averaging percentages published by Stanford, Sloan, Wharton, HBS, LBS, Kellog, Booth, and NYU Stern, while close to 20% of students plan to start their own business, less than 7% do. The difference in willingness to be self-employed between U.S. residents and foreign residents is the difference between 20% of U.S. resident students wanting to start their own business, with 24% of foreign resident students reporting the same. Meanwhile, 52% of U.S. resident students report not wanting to be self employed, with only 38% of foreign resident students reporting the same. A second difference between foreign students and US students is that greater than 80% of foreign students want to work in the US, while only 40% of US students would even consider working elsewhere.
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Regardless of industry type, location, or employment status, another large motivator for entering an MBA program is obtaining an increase in salary. Notable trends include male applicants entering programs with slightly higher average salaries than female applicants, yet both genders expecting to increase their salary to similar extents (with a 44% expected increase for female applicants, and a 43% increase expected for male applicants). This gap is potentially continued by the fact that women applicants seek to work in lower-paying industries. With 50% more women hoping to move into the products/services sector, and much larger percentages of men seeking to move into finance/accounting and technology.
A wider gap exists between all white students and African American/Latino applicants, both in terms of entering income and expected future outcomes. The average salary for entering white applicants is $85,000, while African American and Latino entering applicants earn an average of $65,000 a year. On average white applicants expect to increase their salary by 34% after the program, with African American and Latino entrants expecting to increase their incomes by 39%. The percentage of African American and Latino applicants expecting to double their income is also triple that of white applicants (22% compared to just 7% of whites).
Getting an Equal Shake
An early (and reasonable) expectation for many applicants is that they will be given the same opportunities to impress potential schools as any other applicants. This expectation is fulfilled for some, but there are still many students who have complaints and suggestions for improving school admissions procedures. Especially regarding whether or not application methods allow applicants to reasonably represent themselves. Video essays and interviews were viewed as worse representations of students who live abroad, with 44% stating that their video essay/interview represented them "not very well" (compared to 32% of U.S. Applicants). Both domestically and abroad, a subset of applicants report the video essay/interview doesn't represent them "at all," with 6% of both pools reporting this.
A second common reported difficulty with the application process is the absence of a common recommendation system. Many applicants note that the questions asked by almost all schools are virtually identical in intent, yet due to slight wording differences require a great deal of redundant work for recommenders. This forced over 40% of applicants to have to write letters for their recommenders, an act which somewhat defeats the purpose of having an outside opinion about the applicant.
One of the most reported beneficial tactics for dealing with B-School admissions is the hiring of an admissions consultant. For international students, this often helps to better bridge the cultural gap, the results of which are potentially viewed in negative views of video essays/interviews. For all students, services on one-on-one interview prep, and interview preparation/training are viewed as worth over 3 on a 4 point scale, where 4 is "extremely valuable." Other consultant services that helped to improve admission experience include (in descending reported positive opinion): admissions strategies, evaluation of candidacy prospects, and deciding where to apply or attend.
How are Applicants Feeling About Online MBAs
Perhaps the most distinguishing choice that an applicant to a master's level management program can make is choosing to take a program online instead of traditionally. In light of the larger difference in perceptions (both from employers and applicants) between online and traditional programs than types of traditional programs, we thought a separate section on online schools was merited.
A similar trajectory of growth has been evident in non-traditional MBA program paths, joint-degrees, flexible MBAs, and online or distance MBA programs over the past five years. Though the largest growth can be seen in online programs over the last ten years. These three types of programs are the main interest of about 30% of all those interested in any type of MBA program. While those seeking joint degrees encompassing a traditional MBA with another specialized masters only peak the interest of about 20% of applicants (and are the preferred paths for a mere 2% of applicants), non-traditional MBAs–including related disciplines–are now the preferred type of management degree for almost 50% of applicants.
Currently, 17% of all potential MBA students consider online MBAs. Of those considering online MBAs, the top marketing channels include information sessions, friends and family, career and school advisers, college and university professors, and test prep companies. It is interesting to note that 36% of those considering online programs would also prefer to attend an online program over any other type. The largest marketing channels for this group of applicant differ slightly, including guides/publications, virtual business school fairs, radio ads, social networking, and employer/supervisor. The difference may be attributable to the age and work situation of those only seeking online programs (most likely to balancing work and school, unable or unwilling to relocate, and seeking flexibility in their education) versus those considering more traditional delivery methods.
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As a number of ranking institutions have noted, online MBAs seem to have finally "come of age" with a number of top schools offering online or blended options that offer not only the same diploma but virtually identical curriculum and instruction to traditional programs. With several years of data for many online programs finally available, outcomes can be assessed, and many online programs outcomes look good. Top ranking Indiana University reports that their online MBA students began the program with an average salary of $76,7500, and at graduation were pulling in an average of $104,160. This is a 36% increase and comparable to the jump in earnings of many traditional programs.
While salary data corroborates the rise in acceptance of online MBAs, and schools often offer identical curriculum and diplomas, not every employer views online degrees as identical to traditional programs. In a survey of large MBA employers, targeted questions about the characteristics of online programs are common in interviews. These questions often center on the level of professional socialization in online programs, questions on how closely related online and traditional curricula are, and whether or not residencies are required. This being said, most large corporate employers now recognize online MBAs as comparable to traditional programs, and a few extra questions in an interview are often worth the flexibility and perks of obtaining a degree online.