Despite dismal unemployment numbers and increased public distrust of business executives, the MBA is alive and well if you ask the candidates themselves.
“I came in here and I got exposure to all these different types of businesses,” said Ryan Jaleh, a student at the UCLA Anderson School of Management. “I was with Colony Capital most recently, a private equity firm based out here in LA. And I changed that career path. I got exposure to entertainment and I am currently doing corporate finance at Disney.”
Business students graduating this year can expect higher job placement than in years past. The GMAC Corporate Recruiters Survey found that 55% of respondents planned to hire new MBA graduates in 2010, reversing a sharp drop in 2009, when the same figure fell to 50% from 59% the year before.
The average starting salary recruiters plan to offer new MBAs this year is $80,508, nearly twice the $41,860 average salary people with only a bachelor’s degree can expect to receive.
Generally, recent post-grads with professional degrees which have been hit hard by the tightened job market, with employment for law school students this year down as much as 10-15% from last year, for example. The recession, however, has been good for business schools, Anderson's dean, Judy D. Olian told CNBC.
“The economy has required people to be a bit more flexible and a bit broader about the industries that they look at," she said. "Instead of just looking at corporate finance in the financial services world, they go into corporate finance in the industries that are growing and that are stronger.”
Dean Olian cited entertainment, health care and technology as among those industries that can provide business graduates, especially those in California, with additional career options.
“One of the interesting things about California today is that it’s a very diverse economy,” said Jerry Nicholsberg, a professor at the Anderson School and an economic forecaster. “We’re seeing growth in exports, we’re seeing growth in manufacturing, we’re seeing growth in technical services and innovation and green technology, so there’s kind of a whole variety of areas where demand has picked up and soon we’re going to see new job growth.”
The cost-benefit of getting an MBA has long been debated. With average yearly tuition pushing $50,000, some argue that the MBA isn’t worth it.
“The necessity of the MBA is in the eye of the beholder. Clearly some companies require individuals to have an MBA,” said Jaleh in response to why he chose to pursue the degree. He mentioned Warren Buffett as exemplary of the benefits that can come from an MBA degree, while citing Bill Gates and Steve Jobs as success stories for those without the certificate.
As graduates prepare to enter the volatile world of business, unemployment among people under 25 years old was 19.6 percent in April, the highest level since the Labor Department began tracking the data in 1948.
Their relative success will speak volumes to the health of the economy as a whole, according to the dean. “This is a place where it’s happening before the rest,” said Olian.