After flattening early in the pandemic, pay for business school grads has risen to new heights this year.
In a tight labour market, consulting firms, banks, and technology corporations are luring top business-school graduates into their ranks with record-high salaries.
The University of Pennsylvania’s Wharton School and the University of Chicago’s Booth School of Business both announced that the median pay for this year’s graduates increased $5,000 to $155,000. With 99 percent of students seeking jobs receiving an offer, it was Wharton’s highest-ever median base income. The average yearly pay for Duke University’s Fuqua School of Business M.B.A.s increased 4% year over year to more than $141,000, a new high.
Pandemic-related management difficulties, ranging from supply-chain disruptions to concern about the future of labour, have prompted a varied range of businesses to pay a premium for M.B.A.s’ expertise.
Many of these companies also reported increased profitability, with prominent Wall Street businesses such as Goldman Sachs Group Inc., JPMorgan Chase & Co., Citigroup Inc., and Morgan Stanley raising pay for early-career employees.
“In terms of salary, everyone is in a bit of an arms race,” said Maryellen Reilly, deputy vice dean of Wharton’s M.B.A. programme.
In comparison to other graduate degrees, the M.B.A. has a higher employment market value. According to a Wall Street Journal review of federal data, most graduates made more money two years after graduation than they had borrowed.
Before the epidemic, M.B.A. salaries had been steadily rising for years, prompting many business recruiters to postpone their typical hiring plans.
According to the nonprofit Graduate Management Admission Council, the median pay for M.B.A.s in the United States remained unchanged at $105,000 for last year’s grads.
According to a recent GMAC study of corporate recruiters, that amount is expected to reach $115,000—an all-time high—for 2021 grads as the labour market continues to improve.
According to Sheryle Dirks, associate dean for career management at Fuqua, companies are increasingly competing for business-school talent across industries.
“M.B.A.s have more career opportunities than ever before,” she said, adding that rising employer demand is outstripping supply in ways that give graduates greater clout even as they consider more options.
According to Ms. Dirks, salary offers in finance, consulting, and technology increased the most among Fuqua’s 2021 degree candidates this year.
Demand for consulting firm Bain & Co.’s services has never been higher, which means the firm will need to hire even more M.B.A.s to keep up with client demands, according to Keith Bevans, a partner who oversees recruiting. According to him, compensation for new M.B.A. hires has risen marginally each year but has increased significantly this year.
He explained, “It’s just a more competitive market.” “After school is a fantastic time to seek for a job.”
Some of the most prestigious programmes, such as Harvard Business School, have yet to post their most recent wage figures.
Despite higher compensation after graduation, gender differences in M.B.A.s continue. According to the Forté Foundation, an organisation that promotes for strengthening women’s leadership via business education, women’s enrollment in full-time business school programmes reached a new high of 41% in 2021, up from 39% previous year.
Women M.B.A.s surveyed by Forté earned an average of $147,412 per year in 2020, which is 20% less than men’s $177,112 per year.
According to Forté, the reported gender pay disparity last year ranged from $11,000 for those with zero to two years of post-MBA work experience to a much larger $60,000 differential for those with nine or more years of experience. Men made an average of $172,000 three to five years after graduation, while women made just shy of $152,000.
According to the poll, women were less likely to be promoted and had fewer direct reports. Despite the fact that men and women work in equally lucrative professions, one factor contributing to the gender pay gap is the fact that women get promoted at a lower rate than males.
“We’ve absolutely seen coming out of business school that men and women are making similar choices—similar positions with the same types of prospects,” says Elissa Sangster, CEO of the Forté Foundation. “However, as they begin their jobs, a variety of factors come into play.”
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