The global 2011 Year-End Poll of Employers, conducted by the Graduate Management Admission Council (GMAC), showed that graduate business school students graduating in 2012 are expected to encounter an improved employment environment.The survey showed that 74% of employers plan to hire recently graduated management talent, up from 58% who hired MBA candidates in 2011.
One third of the companies planning to hire MBAs in 2012 intend to raise the annual base salary of these hires compared with 2011, while almost all of the remaining companies plan to keep starting salaries at the same level. The climate, however, is competitive, and in addition to the educational background, employers mostly look for candidates with experience, either from internships, or pre/post-degree work. Only one in four employers would hire an MBA graduate with less than three years of work experience. “Competitive for top talent, still difficult for the masses (average performer with limited experience) to obtain a position,” says one of the respondents. Gaining experience from internships, though, is getting easier, as 69% of employers plan to offer paid internships to MBA students in 2012, of which 22% will increase the number offered. In Europe, demand for recent MBA graduates is strongest in the sector of energy/utilities, with an average of 17.5 new hires per company in 2011, followed by the high technology sector with an average of 10 new hires.
Companies are looking for talent
While future MBA students worry about finding a job and getting back their investments, top executives are concerned about skill shortages. PricewaterhouseCoopers’ 2012 Annual Global CEO Survey shows that talent remains an overriding concern for CEOs, who state that skills shortages and talent related expenses have a strong impact on growth and profitability. One in four CEOs said they were unable to pursue a market opportunity or have had to cancel or delay a strategic initiative because of talent challenges. One in three is concerned that skills shortages will impact upon their company’s ability to innovate effectively. Rising compensation is one factor, but for more CEOs, there is simply a deficit of qualified candidates at a time when more CEOs expect to expand their workforces than to reduce. In the UK, 60% of the companies increased headcount in 2011 and over half UK CEOs surveyed expect to increase their global headcount in 2012. The results of PWC’s CEO survey indicate that Europe has a strong need for high quality management talent and MBA graduates will be invaluable if they focus on acquiring the skills and competences that are looked for.
European starting MBA salaries higher than in USA
The GMAC Corporate Recruiters Survey shows that European companies tend to offer higher salaries to MBA graduates then U.S. employers, with an estimated average starting annual base salary of USD 91,693 for Europe and USD 91,433 for the United States. In fact, European employers place a higher premium on MBA graduate hires compared to the salaries they extend to other new hires than U.S. employers do. There are many factors that drive a new hire’s salary, including individual characteristics such as years of work experience, type of experience, and previous salary, as well as external factors such as level and type of position and industry. In Europe, employers in the consulting industry offer the highest salaries, followed by the sector of energy/utilities, while salaries in the products and services and nonprofit or government sectors lag much behind.