MBA programs are currently one of the hottest market segments in higher education. These overtook the previous most popular graduate degree in the US, a master’s in education, in 2011. There are currently more than 270,000 students registered in MBA programs globally, according to the AACSB (Association to Advance Collegiate Schools of Business).
Demand is set to continue as employers evidently value MBA graduates. Following a short dip in 2020, the percentage of recruiters seeking to hire MBAs in 2021 (91%) was almost equivalent to pre-pandemic levels in 2019 (92%) according to a recent GMAC survey.
In addition to increasing demand for MBAs, there has been a significant increase in the number of students who enrolled in MBAs over the past decade. In 2007, just over 100,000 students were registered for an MBA program and this number has almost tripled in the intervening years. The most popular programs are concentrated in business fields such as finance and accounting but also include health care, engineering, and other disciplines.
What is driving the increasing demand for MBA programs? We outline a few of the main reasons for the continued popularity of these programs below.
The business world is becoming more competitive and challenging for all types of professionals and people are looking for ways to improve their chances of getting ahead in their careers. Employers are more likely to be impressed by candidates who have earned a graduate degree as it shows clear commitment and drives to achieve personal and professional goals.
Applicants without previous relevant work experience can benefit from the opportunities gained through internships or consultancy projects built into these types of programs.
Volatile Nature of Business Environment
There is an increasing need for workers who can adapt quickly to new challenges and technologies in emerging industries such as data analytics and cyber security. MBA graduates will have gained valuable skills such as critical thinking, evaluation, and problem-solving in specific functional areas that can directly impact an organization’s bottom line.
An MBA can help graduates build valuable connections globally, allowing them to meet and learn from other professionals in their field. Interpersonal skills can also be strengthened by engaging with people from a range of backgrounds, ethnicities, and geographic regions.
Programs will teach students how to navigate complex international business environments and how to work effectively with others. Organizations are increasingly trading on a global basis and cultural understanding and clear communication is becoming an integral part of organizational leadership.
In 2019, new MBA graduates earned a median starting salary of US$115,000, over $20,000 higher than the average for grads with other types of degrees – an amount that the National Association of College and Employers (NACE) has predicted will continue to increase.
As with many higher education courses, there is a significant investment in terms of time and cost associated with undertaking an MBA program. Course providers are offering alternatives to the traditional two-year on-campus model by designing online and micro-MBA options. These incorporate greater flexibility and can offer a more cost-effective solution to a student’s immediate requirements. Given the multiple benefits of an MBA from both an employer’s and student’s perspective, we don’t see demand decreasing any time soon.