Is the MBA Going MIA?

According to the University of Washington, the average salary for 2009 MBA graduates from its Foster School of Business is $81,000. Unfortunately, a salary only counts if you have an employer to pay it, and the number of MBA grads with jobs has been on the decline.

In 2008, 84 percent of the MBA students at UW had a job upon graduation. In 2009, that figure fell to 53 percent. Three months after graduation, a greater number of students found a job, but totals remained well below the previous year.

Much of the problem can be blamed on the economy. As more people find themselves jobless, they turn to business programs to help patch up their résumés. This, coupled with an increase in the number of MBA graduates, has flooded the market with people seeking upper management positions. According to the National Center for Education Statistics, there were about 50,000 new MBA graduates a year during the early 1980s. Now, that amount has almost tripled.

Matthew Stewart, the author of The Management Myth, thinks there is another reason. The economic crisis uncovered flaws in business education, particularly the trend toward more students taking business as an undergraduate major and then going on to study business in graduate school as well.  “I would like to see students focusing on real subjects. I’m plugging for the humanities,” Stewart says. The humanities or other solid subjects, he contends, are more likely than undergraduate business classes to teach strong analytical skills.

The MBA isn’t going away, but Stewart thinks it will evolve. Newly minted MBAs will have to start looking for jobs in a wider variety of fields, switching their focus from financial services and consulting into areas like manufacturing and nonprofits. But graduates from less prestigious schools, those outside of the top 20, will continue to struggle even as the economy improves. “Low-tier schools should be concerned; they aren’t getting that prestige value, and there are just too many” students, says Stewart. Washington State, UW, Seattle Pacific University, Seattle University and Gonzaga are all on the Princeton Review’s list of the top 300 business schools.

Paula Klempay, director of career services for the UW’s MBA program, is confident the program (the only state program among Business Week’s top 30) will be among those that continue to thrive. And demographic trends, she says, will keep demand high. “The boomers are going to be retiring, and there has to be someone to fill that talent,” she explains. Klempay adds that 2008 was an unusual year because of the “constant drone of negativity” and she expects demand for MBAs to climb again.

Although some have looked to jobs overseas, Klempay thinks that this trend is little more than “lots of smoke.” Unless someone is trained in a foreign language, finding an international job after graduation isn’t easy. “It’s expensive to import and export employees,” she notes.

Klempay says that the best way to get a job right now is to deepen your knowledge of a field in which you have experience, rather than to make a career change. “A degree doesn’t open the door to change, and career changers are having a much harder time than career deepeners,” she explains. “We aren’t out of the woods yet, but it’s shaping up to be a much better year.”

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