Three years of an economic recovery characterized by sluggish job growth is proving to be a significant deterrent for would-be MBA students.
A recent survey by the Graduate Management Admission Council found that nearly two out of three MBA schools nationwide 62 percent reported declines in applications for their full-time programs this year.
In the Triangle, Duke University and UNC-Chapel Hill, the regions two largest full-time MBA programs, reported declines in applications after seeing them spike immediately after the recession took hold.
The problem stems from the fact that most full-time MBA students have historically followed a well-worn path to their degree: Spend a few years in the working world before heading back to school to gain skills and a degree they expect ultimately will lead to a job upgrade. But many professionals are unwilling to leave good jobs today given the uncertain economy, said Avi Gordon, director of the MBA Admissions Studio, which counsels people on MBA applications.
It used to be people were very confident if they left their job they would find another one, Gordon said.
The challenging job market also is affecting part-time MBA programs. Since the recession hit, cost-conscious companies have been cutting back on helping out with some or all the tuition for employees who go back to school to further their career.
Another damper on applications to part-time programs is that people with jobs are worried about the time commitment given the demands of their jobs, said Denise Rotondo, dean of Meredith Colleges business school.
A lot of folks are telling us they are too busy at work, Rotondo said. They are concerned about looking like they have a priority other than their job.
N.C. State Universitys part-time evening MBA program for working professionals has seen applications fall for four consecutive years. Applications this year were down 32 percent from 2008.
This is of great concern to us, said Ira Weiss, dean of the universitys Poole College of Management.
Sherry Wallace, director of MBA admissions for the full-time program at UNC-Chapel Hills Kenan-Flagler School of Business, said applications for full-time programs have always been cyclical and based in large part on prospective students perceptions of their post-MBA job prospects.
You might be up three or four years and then youre down three or four years, Wallace said.
Admissions at UNC have fallen four consecutive years, including an 8.5 percent decline this year. At Duke Universitys Fuqua School of Business, applications for the full-time MBA program fell 8 percent this year on top of a 2 percent decline in 2011.
Even with those declines, Duke still received 3,191 applications for this falls class, which totals 432 students. And the recent declines at Duke come after the school set a school record with more than 3,500 applications in 2010, a 21 percent increase from the year before.
There are absolutely more than enough ... qualified applicants, said Liz Riley Hargrove, associate dean for admissions.
Worth the cost?
MBA students always have faced a difficult decision in determining whether the skills they will obtain will be worth the cost and two-year commitment that a program requires. The countrys economic woes have only made that decision tougher, particularly since many students take on considerable debt to finance their degree.
MBA tuition at Duke is $52,900 a year. A year of tuition for out-of-state MBA students at UNC is $51,690; for in-state students, the cost is $30,408.
Jon Hendrickson, 28, was willing to give up a good job with a startup investment management firm in Denver because he believes an MBA will help him achieve his dream job: investment portfolio manager.
He anticipates hell end up assuming about $50,000 in debt over the next two years to fund his ambition at UNC, where he enrolled in the MBA program this fall. I looked at people in the position I wanted to have and, in order to feel confident I could get there, this was another tool I needed to add to my tool chest, said Hendrickson.
Mike Westrich is among the prospective MBA students who got cold feet a few years ago. He applied to several MBA schools for the fall of 2009 but decided to defer his ambitions because of the economys woes.
I didnt know if I could sell my house or not, he said.
But he subsequently did sell his house and today Westrich, 29, is a second-year MBA student at N.C. State.
As the recipient of a fellowship, his MBA experience includes the opportunity to work on real-world projects with a local business in his case, Caterpillars building construction products division, which is based in Cary. That was especially attractive to Westrich because, unlike most MBA students, he didnt have any business experience; instead, he spent six years as an intelligence officer in the Air Force.
I was determined to get an MBA because I need the skills, Westrich said.
Although N.C. State has seen dramatic declines in applications for its part-time MBA program, applications for its full-time MBA program actually have risen for two consecutive years, including a 5 percent uptick this year. Applications for the fall of 2012 were still down from the peak of 2009.
Weiss, the dean, said N.C. States program may have been buffered from the overall downward trend because its a different breed of MBA school that focuses more on technology and caters to engineers, scientists and computer scientists. Its also a smaller program than Dukes or UNCs, with nearly 50 students starting this fall.
Campbell Universitys small MBA program between 15 and 25 students in recent years also reports a trend-defying jump in applications the past two years.
The good news for students now entering MBA programs is that the job market for graduates has improved.
The nadir for UNC grads, for example, was the class of 2009. Three months after graduation just 71 percent had received job offers, down from 87 percent the year before, said Amy Wittmayer, director of the schools MBA Career Management Center. The average starting salaries also fell from $95,700 in 2008 to $94,200 in 2009.
Not there anymore
But that turned out to be a one-year blip. Job offers three months out were extended to 84 percent of grads the next year; for this years graduating class, 88 percent received job offers by August. The average starting salaries for those grads was $101,900, up from $99,600 the year before.
We are feeling good about the MBA recruiting environment, Wittmayer said.
Likewise, Duke reported that 79 percent of its class of 2009 received a job offer within three months after graduating, down from 95 percent the year before. Last year, 93 percent of its grads received a job offer within three months.
For students who had made an investment of not only tuition dollars but also time ... to see the market almost crumble before their eyes was extraordinarily disheartening, said Sheryle Dirks, associate dean for Career Management at the Fuqua School. The good news is were not there anymore.
Although Dirks is upbeat about the current MBA job market, she cautions that its tougher than it was pre-recession. In the past, many MBA students have pursued jobs on Wall Street after graduation, but with the contraction of the financial services industry those firms arent hiring as many students as they did five years ago.
Students need to apply for more jobs and do more networking than they once did.
I think the search is more complex now than it was five years ago, Dirks said.