The future is uncertain when it comes to MBA recruitment, with too few jobs for highly qualified graduates, new research reveals

MBA recruiters value the skills that Business School graduates bring to organisations, but worry there may not be enough suitable roles for MBAs in a post-Covid world, according to AMBA & BGA’s poll of 1,000 employers

New research of more than 1,000 employers that recruit MBA-specific roles, finds that recruiters are ‘overwhelmingly positive’ about the value of an MBA from a reputable Business School when looking for senior managers, but that there is lack of confidence in the future of both global and local economies, with most survey participants taking a conservative – and in some cases pessimistic – view on their upcoming recruitment plans.

More than a quarter of employers (28%) believe there are too many candidates for too few jobs.

The survey, carried out by the Association of MBAs and Business Graduates Association (AMBA & BGA) was opened at a time when the majority of the world was beginning to implement lockdown measures as a result of Covid-19. The survey closed as restrictions in many parts of the world were beginning to ease.

This study therefore provides a unique snapshot into employers’ MBA recruitment plans in light of, and in the wake of, the Covid-19 pandemic.

Key findings

  • Employers hold a positive impression of Business Schools, with 47% classifying themselves as ‘very favourable’ and 40% saying they were ‘fairly favourable’ towards Business Schools.
  • 31% of employers ‘strongly agreed’ and 49% ‘tended to agree’ that MBAs had the relevant skills to make a significant contribution to the wider economy in their respective countries.
  • 32% of employers ‘strongly agreed’ with the statement ‘MBAs are good problem solvers’, while 49% ‘tended to agree’.
  • 22% of employers ‘strongly agreed’ with the statement ‘MBAs have adequate soft skills’ while 7% of respondents either ‘tended to disagree’ or ‘strongly disagreed’ with this statement. These results suggest that employers would like to see more from their MBA recruits in the area of soft skills.
  • 61% of employers are either ‘not very confident’ or ‘not confident at all’ in the state of the global economy.
  • While 35% of survey participants think they will be recruiting ‘a lot fewer’ management leaders in 2020 than they did in 2019, 14% think they will be recruiting more management leaders than last year and 16% believe their recruitment of MBA-relevant roles will be the same as 2019.
  • A ‘lack of skills’ among MBA applicants was the most commonly cited hurdle to recruiters – 53% stated that this is a major issue for them. ‘Lack of creativity’ was cited by 47% of the sample.
  • The sample was divided when it came to whether or not they believed MBAs are only motivated by money – while 44% ‘strongly agreed’ or ‘tended to agree’ this was the case, 23% either ‘strongly disagreed’ or ‘tended to disagree’ and 34% were undecided.

Employer perceptions of MBA graduates

Employers surveyed hold a positive impression of Business Schools, with just under half of those polled by AMBA & BGA (46%) classifying themselves as ‘very favourable’ and 40% saying they were ‘fairly favourable’ towards Business Schools. Just 2% of employers said they were either ‘very unfavourable’ or ‘fairly unfavourable’ towards Business Schools.

In terms of their qualities as employees, 16% of employers rated the performance of MBAs as ‘excellent’, 52% rated their performance as ‘good’, 2% rated the MBAs whom they had recruited as ‘fairly poor’ and less than 1% rated MBAs as ‘very poor’ or ‘terrible’.

When asked if MBAs had the relevant skills to thrive within the survey participants’ organisations, 30% ‘strongly agreed’ and 50% ‘tended to agree’ with the statement. A mere 4% ‘disagreed’ that MBAs had the relevant skills needed to succeed in their organisation.

Respondents were also asked if they agreed that MBAs had the relevant skills to make a significant contribution to the wider economy in their respective countries. In another seal of approval, 31% ‘strongly agreed’ and 49% ‘tended to agree’ this was the case. Just 5% ‘disagreed’ with this statement.

Employers were asked if they agreed that MBA graduates had the skills and capacity to become senior leaders at leading global businesses. In total, 45% ‘strongly agreed’ with the statement, 40% ‘tended to agree’, and 3% either ‘tended to disagree’ or ‘strongly disagreed’.

The MBA graduate’s skill set

A third of survey respondents ‘strongly agreed’ with the statement ‘MBAs have the skills that meet the needs of the organisation’, while 53% ‘tended to agree’ and just 3% ‘tended to disagree’ or ‘strongly disagreed’.

A similar proportion of respondents (32%) ‘strongly agreed’ with the statement ‘MBAs are good problem solvers’, while 49% ‘tended to agree’. However, fewer employers agreed with the statement ‘MBAs bring more benefits to organisations than non-MBAs’. Here, 29% were in strong agreement and 40% ‘tended to agree’.

Fewer still (22%) ‘strongly agreed’ with the statement ‘MBAs have adequate soft skills’, although a sizeable 48% ‘tended to agree’. Even so, 7% of respondents either ‘tended to disagree’ or ‘strongly disagreed’ with the soft skills statement – the largest proportion of disagreement in this section. These results suggest that employers would like to see a little more from their MBA recruits in the area of soft skills.

MBAs and technology

Looking at technological skills in particular, employers were asked how well they believe MBAs use AI, big data and augmented reality (AR) in their place of work.

Data skills were the most commonly recognised (57% of respondents said MBAs use big data ‘very well’ or ‘fairly well’ at their organisation). But just 8% and 6% of respondents felt that MBAs are using AI and AR ‘very well’, respectively. One in five thought MBAs use AR ‘not at all well’ in their organisation.

Leadership approaches developed in Business Schools

The employers surveyed were most confident that Business Schools are producing MBAs with an international outlook – 49% thought Schools are producing ‘a great deal’ of MBAs with an international outlook. In addition, 42% thought Schools are producing a great deal of MBAs focused on maximising profit.

Respondents were less confident that Business Schools are producing MBAs that are mindful of those on lower incomes (39% thought there is ‘not a great deal’ of this thinking among MBAs and 15% thought it does not exist at all). In addition, more than a quarter (27%) thought that Schools are producing MBAs that do not give a great deal of consideration – or no consideration at all – to prioritising their teams’ welfare.

Diversity and environmental awareness provoked a more mixed reaction from respondents. While a sizeable 18% of respondents said that Business Schools produce MBA graduates with a great deal of awareness in terms of making decisions that consider the environment, a third (32%) thought that Business Schools either do not produce leaders of this ilk a great deal, or not at all. Meanwhile, although 31% thought Business Schools are producing MBAs that believe in diverse workforces a great deal, 16% said this is either not the case a great deal of the time, or not at all.

The MBA recruitment landscape and current challenges

Survey participants were asked for their opinions on the state of the global economy. Current confidence is low, with more than six out of 10 employers (61%), stating that they were either ‘not very confident’ or ‘not confident at all’ in the state of the global economy.

When it comes to local/national economies, survey participants did not have much more confidence in the economic performance of their own countries, than that of the global outlook: 39% said they were ‘very confident’ or ‘fairly confident’ in their country’s economy at the moment; versus 60% who were ‘not very confident’ or ‘not confident at all’.

Participants were then asked: ‘Approximately how many new positions have you been responsible for hiring in the past two years that have been relevant to MBA graduates?’

The mean number across all survey participants was 20.

Participants were asked how many applications they’d received from MBAs over the past two years. The mean number of MBAs applying for senior roles across respondents’ organisations in the past 24 months was 93.

Putting a mean number of 93 applications in the context of the mean number of 20 jobs reported by the employers surveyed in this study demonstrates that competition is high even among high-performing MBA candidates when applying for senior positions.

Looking to the future

Considering the continuing volatility and uncertainty caused by Covid-19, the question: ‘Do you envisage your organisation hiring more, less, or about the same number of management leaders in 2020 compared to 2019?’ paints a picture of recruiters moving to a strategy of conservatism, projected cost cutting, and recruitment freezes.

However, while more than a third of survey participants (35%) think they will be recruiting ‘a lot fewer’ management leaders than 2019, 14% think they will be recruiting more management leaders than last year and 16% believe their recruitment of MBA-relevant roles will be the same as 2019.

The longer-term picture

In light of the Covid-19 crisis, the survey asked respondents to consider the longer-term strategy for recruitment of MBAs, with particular reference to the importance placed in a range of aspects relating to how and where they acquired the qualification.

The most important factor among survey participants is ‘accreditation of the MBA’ – 46% of participants said this is ‘very important’, and 41% cited it as ‘fairly important’. This was followed by ‘internationalisation of the MBA’, which was classified by 35% as ‘very important’.

The sample was divided on the importance of an MBA programme’s format – in terms of classroom, online or blended delivery. Although 36% classified this as being ‘very important’, 33% said this aspect is either ‘not very important’ to them, or ‘not important at all’.

Factors of lesser importance to participants, in terms of what responding employers will look for in MBA recruits, include the country in which the MBA was completed and the type of MBA completed (i.e. full time, part time or executive) which were cited as being either ‘not very important’, or ‘not important at all’ by 31% in each case.

Challenges for business and the role of MBAs

Participating employers were asked about challenges in the recruitment landscape, and whether they felt the MBAs of tomorrow would have the right skills to address these challenges effectively.

A ‘lack of skills’ was the most commonly cited hurdle to recruiters – 53% stated that this is a major issue for them. ‘Lack of creativity’ was cited by 47% of the sample.

More than three quarters either ‘strongly agreed’ or ‘tended to agree’ that MBA graduates are well prepared for the fast-moving pace of business. Meanwhile, 66% either ‘strongly agreed’ or ‘tended to agree’ that MBAs have good soft skills. However the sample was divided when it came to whether or not they believed MBAs are only motivated by money – while 44% ‘strongly agreed’ or ‘tended to agree’ this was the case, 23% either ‘strongly disagreed’ or ‘tended to disagree’ and 34% were undecided.

David Woods-Hale, Director of Marketing and Communications at AMBA & BGA, said: ‘The results of this survey provide both good news and areas for improvement for Business Schools and their MBA graduates.

‘Employers polled in the research are overwhelmingly positive about the value of an MBA from a reputable Business School when looking for senior managers. In terms of the quality of MBAs recruited by survey participants, 16% rated MBAs in general as ‘excellent’ and 52% rated their performance as ‘good’.

‘In spite of these encouraging findings, and in light of continuing global uncertainty and volatility, employers that participated in this study also revealed their worries about the recruitment landscape of tomorrow. There was an overwhelming lack of confidence in the future of both global and local economies, with most survey participants taking a conservative – and in some cases pessimistic – view on their upcoming recruitment plans.

‘With the volume of senior management opportunities predicted to decline in the near future, competition for these leadership roles is likely to grow fiercer as a result – and 28% of employers that participated in this survey said that there were currently too many candidates for too few jobs.

‘A lack of skills and a lack of creativity among those applying for roles are viewed by employers as being the two biggest issues facing the current recruitment market. These are areas that Business Schools and their cohorts will want to address collectively to ensure graduates are prepared for the roles they want, and that they are enabled and empowered to demonstrate their skills in creativity, innovation, emotional intelligence – and ultimately, their value to an organisation – from day one.’

ENDS

Notes to editors

To read the full report, visit https://www.associationofmbas.com/research/international-mba-survey-2020-trends-and-issues-in-mba-employment/

For more information, interviews or imagery, contact:

Ellen Buchan, Insight and Communications Assistant, AMBA & BGA: e.buchan@associationofmbas.com

Methodology and participant demographics

Between 27 March 2020 and 27 May 2020 AMBA & BGA conducted its largest-ever online survey of its 49,000 MBA student and graduate members, based in more than 150 countries.

As part of the research, the study polled 1,047 AMBA members who reported that they were decision makers in the recruitment of MBAs for the organisation at which they work. (Please note that this report uses the terms ‘participants’, ‘survey respondents’, ‘employers’, and ‘recruiters’ interchangeably when describing this research sample.)

Of these employer participants, 80% were male and 20% were female. Their ages were most likely to be 35-44, with 43% of participants fitting into this bracket, followed by the age groups 25-34 (17%); 45-54 (26%); 55-64 (11%), and 65 and over (2%). In terms of geographic location, 28% of respondents were based in Europe (excluding the UK); 15% in the UK; 13% in Africa; 12% in Asia and the Middle East (excluding China and India); 11% in Latin America; 8% in India; 7% in North America and the Caribbean; 4% in Oceania; and 2% in China (including Hong Kong, China).

The sample reveals a hugely varied spread of industry representation, with the most-represented sectors being consultancy (9%) engineering (7%), IT (7%), banking and finance (6%), marketing (6%), and manufacturing (5%).

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