'People are more demanding now'

In the current economic climate, MBA applicants are being choosy. They are opting for part-time or executive programmes. Helen Jones reports

"During the late Nineties, corporations used to send company limousines to campuses at all the top business schools. Managing directors would take students out to dinner and pamper prospective candidates. Now the tables have turned. Companies no longer have to beg MBA students to come and work for them and students now have to do everything possible to stand out from the crowd and prove their worth," says Boris Nowalski, director of careers services at Instituto de Empresa business school, in Madrid.

In the current economic climate, the prospects of student debt and limited job opportunities appear to be deterring some potential MBA students. Anecdotal evidence in the UK suggests applications to business schools have reached a plateau following a peak in 2000/1.

John Mapes, director of admissions at Cranfield School of Management, says, "Applications have flattened compared with a couple of years ago when we were seeing big year-on-year increases in applications. We can still take our pick of the best students, but applications from the UK are down on last year, although applications from China and India are growing."

However, he adds: "People are taking the long view. They are thinking, 'What do I want to be doing in 10 years' time?' If they want to be a CEO or on the board, then they choose an MBA."

Mr Mapes says that most of Cranfield's applicants have been thinking about doing an MBA for some time and are either frustrated in their current jobs or they have been made redundant and have the funds to pay for the course.

David Begg, principal of the business school at Imperial College, London says, "People are more demanding now and are looking for value for money and a real return on the money they've invested."

Business schools, keen to compete for the best students, are offering a variety of scholarships and are resisting the temptation to raise fees.

While full-time MBA programmes are receiving fewer applicants, distance and part time courses continue to be popular, says the Association of MBAs. Family commitments and the need to keep earning while studying, play a major part, it says.

David Begg agrees and says, "One of things that is happening because of the state of the economy is that people aren't necessarily quitting their jobs, but are taking the part-time route or following executive MBA programmes and that looks very promising for Imperial in the future."

In the US, prospective MBAs are cautious. Research from the Graduate Management Admission Council indicates that for the 2002/3 academic year, only 35 per cent of business schools reported a rise in applications compared with the 84 per cent which saw a rise in 2001/2. The University of Chicago, Graduate School, for example, has received 27 per cent fewer applications this year, than last.

It's not surprising. A survey of students at top US business schools including Dartmouth College, Duke University and Kellogg UCLA, indicated that in March, only 60 per cent of them had job offers, compared with 80 per cent at the same time, last year.

However, despite the difficult job market, in the UK, MBAs can generally expect to improve their careers over the long term. The Association of MBAs (AMBA) salary and career prospects survey confirms that the salaries of graduate MBAs continue to rise consistently and remain ahead of average earnings despite the current economic climate. The base salary of the 900 MBA graduates who took part in the latest survey averages £64,000 a year. In real terms, this translates to a 39 per cent increase in salary upon graduation.

MBA students are now taking a more realistic approach to post-graduation, says Alf Hatten, acting director of University of Strathclyde Graduate School of Business.

"When I did an MBA I was told I would double my salary. It was a myth then and it's a myth now. Our ethos is about 'making a difference' and now we are seeing people wanting to do an MBA to start their own business or move into the public and non-profit sectors where they can see that their input does make a real difference. Students are looking at the long-term rather than short-term gains," he says.

At Instituto de Empresa, Boris Nowalski, says his role is to manage students' expectations. "A few years ago, students would often do an MBA to help them change career. In today's economic situation, companies want someone who can do the job from day one, so making that switch is more difficult."

Alison Edmonds, director of career management services at Manchester Business School has observed a recent trend.

"We've found progress slower this year with a small reduction in the numbers reporting job successes at this time of year. We've seen a significant increase in the number of students taking projects in order to find a way into a company."

However, Ms Edmonds says that students remain optimistic and many are not accepting offers straightaway but are holding out for what they want.

"I am consistently proud of Manchester Business School students turning down poor offers in the face of financial pressure and tough markets," she says.

To make their graduates more attractive to employers, business schools are focusing on new areas. Jeanette Purcell, Chief Executive, Association of MBAs, says, "Increasingly, MBA programmes provide a range of opportunities for students to apply their learning to practical situations in a business environment. The MBA, far from being classroom-based, is concerned with combining the benefits of on-the-job experience with other forms of learning."

Imperial, for example, encourages its MBA students to get involved in the university's spin-off companies; Empresa also fosters an entrepreneurial spirit and last year 24 new companies were created by its graduates.

Dr Jokyeong Kang, director of Manchester Business School's full-time MBA programme says, "We've introduced 'softer' skills such as leadership and negotiation as part of the core courses offered. We look at the whole picture and help students to understand their strengths and weaknesses. And if they're interested in becoming entrepreneurs, they can choose the Small Business Consulting elective which allows them to work on a business idea with MBS's Incubator which was launched to turn good business ideas into reality."

CASE STUDY - DANNY ADAMSON

Danny Adamson has just finished a full-time MBA at Imperial College London and has started work as commercial director for coffee and tea company, Gala.

My decision to do an MBA was prompted partly by frustration. I was working for Kimberly Clark and a few of us were pushing for a director's role but you don't reach director level unless you really understand finance and operations. An MBA was the best way of broadening my skills and getting a board level position.

Imperial was the most down to earth college I looked at and the then head of school, David Norburn, was really inspirational, so I opted for it.

Getting a job was my main priority. I know that in the past you could swagger into interviews with an MBA and take your pick of jobs. It's not like that now. I was absolutely focused and single-minded and it has paid off.

CASE STUDY - JUSTIN GRYLLS

Justin Grylls recently completed the full-time MBA course at Cranfield School of Management and is still looking for a job but he remains optimistic about his prospects.

I'm originally from South Africa, but had been in the British Army for a number of years and then moved into operations in investment banking. I wanted to become more commercially aware and so an MBA seemed like the best thing for me. It has been incredibly hard work but definitely worth it. I loved working in teams. I realise that an MBA is not an instant passport to a better job or bigger salary but I believe it will help me move to something different.

In the last six months of the course, I - and my fellow students - realised that it might take longer to find a job than we anticipated. I'm now looking for one, especially as I have a new baby, but I am in a fortunate position financially, so I'm not going to rush in and take the wrong thing.