New MBAs finding education pays off big time

Posted on: January 26, 2006

New MBAs finding education pays off big time

MBAs are hot, again.

Salaries and signing bonuses of fresh graduates
took a double-digit jump in 2005 to a record average $106,000 and
signaled an end to the "perfect storm" of sour news this decade that
included the dot-com bust, the Sept. 11 terrorist attacks and a
subsequent recession, said Dave Wilson, president of the Graduate
Management Admissions Council (GMAC) that oversees the test for
aspiring graduate students in business.

Corporate recruiters had disappeared from
campuses. But, Wilson reports, "The MBA is back as the currency of
intellectual capital."

The $106,000 salary and signing bonus was up
13.5% from 2004, according to a GMAC survey of 5,829 2005 grads. Salary
alone increased to $88,600, surpassing the previous high of $85,400 set
in 2001. The 2005 salary still trails 2001 by about $4,000 when
adjusted for inflation, but the inflation-adjusted record will likely
be broken this year.

Consulting firms and investment banks, the
best-paying employers of freshly minted MBAs, had been slashing jobs.
"They’re back and hiring aggressively," says Nunzio Quacquarelli, the
London-based director of the QS World MBA Tour that recruits students
to 350 business schools in 56 cities worldwide.

The average bonus paid to a 2005 MBA graduate by investment banks was $40,000, Quacquarelli says.

Other forces are behind the rising compensation.
The health care industry craves MBAs to help manage spiraling costs,
and schools such as Boston University offer an MBA for those looking
for careers ranging from hospital administration to biotech.

Technology hiring showed signs of life last year
and is building steam in 2006, Quacquarelli says. Even the outsourcing
of jobs to places such as India is driving demand for MBAs. The Labor
Department estimates the outsourcing industry will need 2,000 senior
executives this year, up from 100 in 2000. By 2012, it will need 9,500.

Wilson says there is also heavy demand for MBAs
by the U.S. government and not-for-profit organizations. Salaries are
not as high, but added demand is likely driving them up elsewhere.

The trend is global, according to a survey out
Tuesday by QS World MBA Tour. Average salary and bonus for new MBAs was
up 10% in 2005 to $114,000, also breaking the record set in 2001.

More than 100,000 MBA degrees are awarded each
year in the USA alone. That’s likely to rise. Prospective students who
took the Graduate Management Admission Test rose to 228,000 in 2005
from 213,000 in 2004. And this year has started strong, Wilson says.

There are 1,500 schools worldwide offering MBAs,
a number poised to explode, Quacquarelli says, as programs in China,
India and Russia take off.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 1 other follower

January 2006
« Dec   Feb »

Top Rated

Flickr Photos

%d bloggers like this: