What’s in store for MBAs in 2014?

Every November, the Graduate Management Admission Council (GMAC) conducts a Year-End Poll of Employers, a study that compares actual hiring for the current year and previews employer hiring projections for the coming year. The 2013 Year-End Poll of Employers is one of a series of survey reports produced annually by the Council, a global nonprofit education organization of leading graduate business schools and the owner of the Graduate Management Admission Test (GMAT)

GMAC conducted this annual poll of employers from October 30 to November 15, 2013. The study garnered responses from 211 employers at 185 companies in 33 countries worldwide. Forty-one respondents are affiliated with companies in the Fortune 500, and include 22 from Fortune 100 firms.

Based on world region, 65 percent of survey respondents were located in the United States, 13 percent in Asia, 11 percent in Europe, and 7 percent in Latin America. One-third (33%) of responding employers have more than 25,000 employees; 17 percent have fewer than 100 employees.

As per the study, the employment landscape in 2014 will continue to reflect steady demand for business and management skills. Actual hiring reported by participating companies for 2013 signals improved demand for business and management skills by firms worldwide compared with a few years ago. However, continued economic uncertainty from the eurozone crisis, slower growth in emerging markets, and on-again off-again confidence in the US political climate are viewed as threats to improved demand.

This is far more encouraging than the survey published by researchers from Michigan State University, who expect employer demand for MBAs to contract by 25 percent during the current academic year. The Michigan State survey included more employers (PDF), and was focused on U.S. based companies, which may explain the discrepancy.)

As per GMAC, employer plans to hire graduate business talent in 2014 are expected to remain strong for nearly all investigated candidate types, underscored by a majority of firms with increased focus on growth for the coming year and reduced focus on efficiency goals. In addition, a majority of employers that plan to hire new business school graduates in 2014 report expected growth in salary levels at or above the rate of inflation.

Survey responses show that MBA graduates will be the most sought-after candidate type among all business school graduates, with 72 percent of employers reporting plans to hire an MBA candidate in 2014. This is similar to 2013, when 71 percent of these employers hired MBA graduates.

Employer demand for non-MBA business master’s (MBM/ MIM) graduates continues to grow. The greatest growth in demand is expected to occur in the share of employers that plan to hire new Master in Management graduates (42% of employers, compared with 37% in 2013).

Key Findings

Employer hiring plans holding steady for 2014 job market

• 72 percent of employers expect to hire MBA graduates (up from 71% of employers in 2013).
• 87 percent of employers plan to maintain (43%) or increase (43%) headcounts for new MBA hires.
• Eighty-five percent of employers met or exceeded their 2013 hiring targets for recent MBA graduates
• Prior work experience an important criterion. More recruiters voicing a need for MBAs with substantial work-ex
• Employers reported that business graduates add value to their company, and they seek those who have exceptional interpersonal skills and are able to use data to drive decisions.

Salaries in 2014 expected to Increase for business graduates

• More than half (56%) of employers plan to increase base salaries for recent MBA graduates at (45%) or above (11%) the rate of inflation.

Internship Opportunities Plentiful for MBAs

• Sixty-one percent of employers plan to extend internship opportunities to MBA students.
• Internships continue to be less available for students in master-level programs in management, accounting, and finance, and other specialized business master’s programs. MBA students seem to be preferred for internship assignments.

Some opinions from the study that are a telling commentary on the state of the economy and the business outlook in 2014:

“Good people with solid experience will continue to be in demand. However, demand is not so great that companies are willing to take people with little previous work experience and/or mediocre academic performance.”
—Manufacturer in the United States

“The competition has increased significantly over the past two years. We are seeing a greater number of companies on campuses and earlier in the process. We also see a big divide between the high-quality talent, with relevant/meaningful work experience and the rest of the class with average accomplishments and limited relevant work experience.”
—Manufacturer in the United States

“In India this looks like a tough scene.”
—Products and services employer in India

“It remains an extremely difficult market.”
—Consulting employer in Europe

“Market is well in GCR [Greater China Region].”
—Technology employer in China