The European Job Market For MBAs
Maria |
March 6, 2024

In the latest episode of Business Casual, the hosts delves into MBA job trends, spotlighting the recent employment reports from INSEAD and London Business School. A significant highlight is INSEAD’s unprecedented placement of graduates into consulting roles, marking a potential record in MBA history. The hosts unpack the allure of consulting post-MBA, its benefits as a career foundation, and how it keeps options open for future shifts in career paths.

Discussion extends to how consulting firms value the one-year MBA program for its efficiency, particularly appealing to firms looking to sponsor employees. They also touch on the geographic mobility and cross-cultural skills of INSEAD graduates, making them attractive hires worldwide. Despite the impressive statistics, concerns about overrepresentation in consulting and its impact on school perception are also examined. 

The episode rounds off with insights into the strategic decisions MBA candidates can make based on hiring trends and school stereotypes, offering a comprehensive analysis of the MBA job market in Europe.

 

 

 

 

Episode Transcript

[00:00:08.570] – John

Well, hello everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast with my co hosts Caroline Diarte Edwards and Maria Wick-Vila. We’re going to talk about jobs, MBA jobs, and in particular MBA jobs in Europe primarily. Know whenever a business school comes out with an employment report, we are all over it, covering it from top to bottom and giving the analysis that you won’t find anywhere else, including how that report compares to others. Well, in the past week we have new reports from INSEAD and London Business School and the big news is that in the past year, INSEAD has probably placed more people in the consulting industry than any school in the history of the MBA. This is my conclusion. Based on the report, six out of ten graduates at INSEAD in the past year went into consulting. Now what do you make of that Caroline?

[00:01:11.270] – Caroline

It’s a very impressive number. Well, first of all, consulting is a great job post MBA because it’s a wonderful training ground. You get a lot of exposure to a broad range of industries. It’s a very intense work experience. So some people like to do it for a few years and then move into a different position and some people are looking at it as a long term career and aiming to become a partner in the firm. But it is an amazing training ground. So I think having an MBA plus consulting experience is an incredible foundation for a young person to have for their career and can lead to so many different opportunities in the future. Right? So it is a great way for keeping your options open as well. You can make a career change after working in consulting and a lot of people do that and go into a vast array of positions afterwards. I suspect that if the job markets in other sectors had been better, then we wouldn’t see such a large chunk of the class going into consulting. So I think that for some people this was probably their plan B rather than plan A.

[00:02:24.910] – Caroline

And the consulting firms have benefited from the fact that other firms have scaled back their hiring to mop up a lot of very talented INSEAD graduates. And then of know when the firms like McKinsey, Bain and BCG go to recruit at INSEAD, they’re not just recruiting for France or for Singapore or for London, they’re recruiting for offices all around the world. So they can recruit a huge number of graduates because they are big firms with offices spread in a global network and they appreciate the fact that INSEAD graduates have these cross cultural skills which is very much core to the learning experience at INSEAD. And so INSEAD graduates are known for being able to hit the ground running in a different market and work successfully across international borders. So firms like MBB love recruiting INSEAD graduates because they can plop them into an office anywhere in the world and they’re usually incredibly successful. So it looks like that is what has happened here.

[00:03:29.960] – John

And it’s incredible. When you look at the list of companies that are the top recruiters at INSEAD, nine out of the top ten are all consulting firms. Eleven out of the top 15. From the beginning, McKinsey, 167 hires out of INSEAD BCG, 108, Bain, 89 strategy n 38 at Carney, 32, Roland Berger, 19, Oliver Wyman, ten, Ernst and Young, ten. Accenture, nine. You finally get Samsung, Amazon and Eli Lilly before you get two other consulting firms in the restructuring business. Alex, partners in Alvarez and Marcel. And then you have Morgan Stanley. That is just extraordinary, the number of firms recruiting INSEAD MBAs. Now, the other important thing to point out, and Caroline, you know, this is true too, and has been true for many years, is that if you’re a consulting firm and you want your analyst to get an probably. And you want that analyst to return to you, you probably prefer a one year program and you’re willing to foot the bill for that and have someone come back than a two year program where you’re more likely to lose an employee that you really want to keep. And so I think that INSEAD, more than any other business school in the world, has a lot of so called sponsored students who come from the likes of MBB and these other consulting firms with the intention that they will return to their employer and their entire tuition will be subsidized completely by their employer.

[00:05:16.670] – John

Didn’t you find that to be the case when you’re at.

[00:05:19.830] – Caroline

Yes, absolutely. The consulting firms love INSEAD for precisely the reasons that you say that it’s very efficient for their staff to be able to get their MBA in one year rather than two. That focused experience means that they have less time for job searching and looking at other opportunities that they would have if they did a two year program. So I’m sure that they’ve seen over the years that the analysts who go for a one year program are more likely to return than analysts who go for a two year program. And I would sometimes have difficult discussions with those consulting firms, right. Because they want to get more and more of their staff into INSEAD. And you can’t fill the entire classroom with McKinsey, Bain and BCG because that wouldn’t even be good for the McKinsey, Bain and BCG guys, right? They don’t want to be surrounded by all of their peers. They’re coming to INSEAD for a diverse learning experience. But there’s sometimes some tension with the firms because they are looking to channel a lot of their analysts into the score.

[00:06:21.010] – John

What’s also interesting about these numbers is the increases in know. In the US in particular, we’ve seen a slowdown by consulting firms in hiring MBAs and a number of people who they have hired, they’ve delayed the start dates. But at INSEAD, McKinsey is up from 160 to 167. BCG is exactly the same in recruiting 108 the year previous to this one. You have strategy Ann going from 21 to 38 hires at Carney from 17 to 32, Roland Berger from eight to 19, Oliver Wyman from six to ten. So almost all of the consulting firms have actually increased the hiring instead of actually lowered it INSEAD, which is another big surprise.

[00:07:17.380] – Maria

One thing that I found interesting about the INSEAD report was that 61% got jobs in management consulting, but only 37% came from management consulting. So that would point to a net gain of over 200 students who are able to make the switch not from management consulting into management consulting, which I think is a real testament to the INSEAD career services office.

[00:07:38.450] – John

Yeah, that’s, that’s huge. That really is huge. And I’m glad you pointed that out. That’s a really smart piece of. Because as I pointed out, there are a number of cylinder firms who really love to sponsor people at INSEAD. The fact that people are able to do a career pivot at INSEAD and get into consulting, which as we all know, is highly selective, highly competitive, it is not the easiest industry to get a really good job at. That’s a real testament to the school. Overall, the numbers are really good. At London Business School, for example, 91% of the class of 2023 got job offers three months after graduation. That’s only down three points from 2022 and two points from the year before in 2021. So those are really good numbers. And I think they also, to put these into perspective, when you have a lot of international students and you have increasing numbers of students seeking one off job opportunities, they’re not going to get them on the traditional three month cycle where people come to campus, they hire boatloads of MBAs and they get them to start at the same time in late summer, early fall of the following year, if not immediately after graduation.

[00:09:03.160] – John

If you want a job in places like a hedge fund, a venture capital firm, a private equity company, or a nonprofit or government job, all of these jobs are one off job searches for MBAs and they take a little more time. So when we say that 91% of the class got a job offer within three months, we’re also not saying. But it needs to be made clear that many of these MBAs are working on these one off offers where they have to go and use networking techniques to get into jobs that are very hard to get at companies that don’t routinely recruit large numbers of MBAs. One other little interesting stat out of the LBS employment report is that the actual salaries declined in three key industries year over year, which also doesn’t really happen all that often. But that also can be the impact of geography or company choice. So there can be a lot of noise in this data. But essentially the MBAs at LBS who went as consulting, finance and tech all saw declines in their pay. In finance, the decline was more significant than any other, was 11% decline in average salary.

[00:10:32.650] – John

What do you think that is all about, Caroline?

[00:10:36.770] – Caroline

Yeah, well, I think that LBS is more dependent than INSEAD on the UK job market. So it says in your article that more than half the class stayed in the UK, so 55%. And that’s even a drop from in previous years when it was two thirds of the class staying in the UK. And the UK has not been doing tremendously well. Brexit, we shot ourselves in the foot there. So a lot of finance jobs have left the UK, right? Firms have relocated, have moved teams and so I think it is a more challenging job market. INSEAD has the benefit of having a more global portfolio of job opportunities. London business school does also feed graduates into a lot of markets all around the world. But INSEAD, given the size of the class and the presence with campuses both in Europe and Singapore, does have a more global portfolio of relationships with recruiters. And that is a benefit. I mean, I’ve seen that in the past when I was working at the school and we would go through cycles of ups and downs in the recruiting market. And the fact that you’re not so dependent on one single local market does give a buffer to the school.

[00:11:54.340] – Caroline

And it’s incredible that INSEAD 100 graduates from that class have actually gone to the Middle East. I mean, there’s been tremendous growth of opportunities in the Middle east over the past few years and that’s the biggest number of INSEAD graduates I think they’ve ever moved to that region. So there are definitely great job opportunities there, very attractive financial packages being offered to graduates moving to that region. And it may be that INSEAD because it’s a bigger school. It has more relationships internationally than London business school has. It’s been able to divert some of its graduates to different markets in a way that London business school hasn’t been able to do. And I know that it didn’t mean they’ve invested a huge amount in the careers team over the past few years. It’s a much, much bigger team than when I was working at the school. And so I see that paying off, right? That they have really great relationships that they’re very good at maintaining and so they’re able to weather the storms a little bit better perhaps than some other schools.

[00:13:02.660] – John

Yeah. The other thing worth noting is that the median salary at INSEAD is up. It’s at 119. This is in us dollars from 110 the year before, median signing bonus, 31 grand, up from 27 the year before. Maximum salary. I always love when a school reports the largest number that a student got, even though it’s totally an anomaly and it’s often dependent on previous work experience. I always find these numbers fascinating. And in INSEAD’s case, the big payday occurred to someone who went into the energy sector. $450,000 to start. Maria, that sounds pretty darn good, doesn’t it?

[00:13:56.110] – Maria

I mean, it doesn’t sound bad. I’m not opposed to it. I would take, you know, shockingly enough, so might know. I wonder if that person was going to the Middle east, perhaps, maybe they were a member of the Saudi royal family to begin with. Who knows? One can never, I mean, I guess oil and gas, maybe they need to attract people to come work for them. If there is so much interest in sustainability amongst MBA students right now, maybe the oil and gas companies are having trouble attracting talent and perhaps they’ve had to increase the compensation accordingly.

[00:14:36.780] – John

Yeah, and I’m betting this person has had a good amount of experience to draw upon and was a very valuable recruit for whatever company got that person. I’ll also note this, and I think this is important as the economy is so dynamic and it’s so different from one region of the world or country, even to another. When you look at these global reports, where schools are really placing people all over the world, unlike most, you know, opportunistic students have the opportunity to pick and choose. And the Middle east is a good example. As Caroline and Maria both pointed out, it’s dynamic, it’s growing, it’s fast paced. The number of people available with skills to help professionally manage operations in the Middle east is low, and that spells great opportunity for MBAs. And if you’re in a global program, like a London business school, like an INSEAD, you’re going to be more apt to take advantage of where the opportunities are in the best and fastest growing economies in the world. It’s just a simple fact, if that’s what you want to do. And clearly, I think in the INSEAD report, with over 100 of students going to the Middle east, which if it’s not a record, it’s a near record for INSEAD, is an indication of this and a real positive.

[00:16:04.970] – John

It’s also something to think about. If you’re considering an MBA and you’re considering your opportunities and you’re open to basically getting the job anywhere and you’re really interested more in growth and a dynamic economy, your options may really well open up in a big way when you go to a global MBA program. Any final thoughts on these? I think they’re both really good reports, Caroline.

[00:16:34.360] – Caroline

Yeah, so a couple of things. I think it’s also evidence that consulting firms always do well regardless of the economic cycle, right? Because if economies are booming, then they’re doing lots of wonderful, fascinating strategy projects and market entry projects. And then if the economy is in dire circumstances, then they’re doing lots of cost cutting projects and headcount reduction projects. So consulting firms always do well regardless of how other firms are doing. So I think that these statistics also reflect that. And then I would also say, even though these numbers are good for INSEAD, it’s a double edged sword, because they do not want to be known as the school to go to only if you want to do consulting. Right. And they do suffer a bit from that image that sometimes candidates are put off by those numbers because they think, well, INSEAD is a consulting school. And if I want to go into finance or I want to go into something else, then I should go elsewhere. And the school is very keen to dispel that myth because it does have great relationships with recruiters across industries. And sometimes the numbers can be a bit misleading because it’s such a large class.

[00:17:51.910] – Caroline

So you might still have in absolute numbers quite a lot of people going into finance or private equity or venture capital or starting their own companies or whatever it may be, it may not be a huge percentage of the class, right. So people can underestimate the other opportunities. And the school does suffer a bit from that concern, that image that sometimes candidates think that they should only go to INSEAD if they’re interested in consulting. So I would say that is not the case. And I know that the school will be looking at these numbers and they will be concerned about how that will look to prospective candidates. So just a final thought there.

[00:18:37.510] – John

No, that’s a really good point. And this is something that I’ll just say. Many schools still suffer these stereotypes. Like people say, oh, if you want to go into marketing, go to Kellogg. If you want to do finance, go to Wharton. If you want to do something like operations management or supply chain, go to Michigan State. Or if you want to go to consulting, INSEAD or finance, London business school as well. And these stereotypes don’t really do justice to the general management curriculum and all the great faculty in the various disciplines that make up business because all of these schools are really, at this level, great across the board. And in fact, you could basically, as an applicant, think about the alternative strategy, which is this. If you go to Kellogg, instead of going into marketing or consulting, you go into finance. Why? Because a few of your colleagues want to go into finance. And you may find more opportunities out of Kellogg and finance that you would in a place where so many people are gravitating to that same. You know, you can play this two different ways. Or at INSEAD, let’s take these numbers and say, okay, what the consulting firms have found is that the fishing is great at INSEAD because the pond contains so many fish who want to go into consulting.

[00:20:04.360] – John

Therefore, every consulting firm is going to go there with an army of recruiters and interview everybody under the sun because they’re expecting to come out with boats full of fish. It’s hard to really sit back and say, oh, which strategy should I employ? Should I go to the school if I want to be a consultant that’s placing so many people in consulting, or do I go to school? That’s placing few people and therefore I have fewer competitors in those interviews and maybe even a better chance of getting a job because the employers, too, want a diverse range of people from various schools. So it’s always a difficult play. Anyway, these are two good job in climate reports, interesting both in themselves. And you can read about my Poets and Quants. Meantime, hey, thanks for listening. This is John Byrne with Poets and Quants.

Business School News | General | P&Q Podcast "Business Casual"
The European Job Market For MBAs
Maria |
March 6, 2024

Video transcript, for you skimmers out there: 

I love the fact that they. Report on this metric, right? The salary percentage increase, I think is an incredibly valuable metric because there are so many business schools out there that are great for so many people. And at the end of the day, these programs are in fact able to do what a lot of business school applicants are hoping for.

They are in fact able to provide a real change in the trajectory of someone’s career. They are, in fact, able to help people leapfrog. Into a higher career stratum than they would’ve otherwise been able to be in. So from that perspective, I love the fact that the FT reports on the salary percentage increase.

So valuable. I think it helps, when sometimes I talk to people at the beginning of the business school journey, I will frequently hear something like, well, it’s M seven or bust, you know, it’s Harvard, Stanford, Wharton, or bust.

And I’m often like, look, slow your roll, man. There are so many programs out there that are going to get you. They might not be the first ones that you think [00:01:00] of, but wow, does that even matter? I mean, whew. Look at some of these numbers. $170,000. That is nothing to sneeze at, especially if it’s one and a half times more than what you were making before business school.

I mean, wow. , That is life changing. , And these schools can really change people’s lives. And I think it’s important to have this metric available because I think it helps open people’s eyes. To, To be a little bit more open-minded. , And I think that’s wonderful.

Where my little quibble is. Is that I believe this is an important metric to report upon. However, I do not believe that it is a metric that should have significant amount of weight in the rankings because if we think about what is the purpose of a ranking, it is meant to be some sort of a representation of relative quality.

Now rankings. The entire concept of them is flawed the entire, for me, the entire concept of an ordinal ranking is ridiculous. Like school versus two versus four, versus seven versus six . You know, like, there, there’s sort of [00:02:00] these tiny miniature marginal differences. I think that school rankings should instead be in buckets.

Like, here is the top bucket, and then here is the also very good, but just underneath the top bucket, the next bucket. Um, but no one, no one listens to me. Uh, but so anyway, to the extent that a ranking. Is intended to be some sort of a measure of a program’s quality. I don’t think that this metric is one that should be included in the weighting.

Look, again, . Life-changing levels of improvements in salary. But when I look at, okay, so these were the top five programs by the salary percentage increase, but now when I look at it by the weighted salary, right, the top five US programs, by weighted salary, it’s not entirely accurate to say that.

Well, these programs, you start with people who have lower incoming salaries and they end up in the same place as the other programs. The numbers do not [00:03:00] really, , the numbers would tell a slightly different story. So if you look at the weighted salary a few years out for the top five programs by salary,

we’re talking about a $70,000 a year difference, roughly 240 a year versus 170 a year. That’s about a 40% difference, which I don’t think is a small, you know, if we were talking 5%, even 10%, I’d be like, yeah, 10%, that’s nothing. It’s, you know, nothing but 40% I do think is a pretty, I think it’s a pretty significant difference, uh, that is worth noting.

And so. Your point about like, well, they were letting in the people who were already on a, you know, if you were making, let’s see if we can, if we figure out, okay, so if we take this, these numbers, then we can sort of back into what’s an implied pre MBA salary, you know, that would indicate maybe something in the mid sixties before MBA versus, you know, one 10 something, [00:04:00] 1, 1 10, 1 15, for these other programs.

I get your argument. Your argument is like, look, these people were already clearly high achievers prior to business school, and so, mm-hmm. Is it not true then that the business school, like they would’ve continued to be high achievers And in fact, this is true, some of the most successful, financially successful people I know skipped business school altogether and they didn’t need it.

, However, I think GMAC often does, polls or surveys of MBA graduates, and I think the vast majority of them, at a minimum say that they’re glad that they went to business school, that they do feel that it was worth, their time. So. How much of this is,, nature versus nurture.

We, we will never know. , But I would gently push back on the fact that I, because these numbers essentially to the extent that they’re lower than say these numbers, it effectively penalizes thes e schools in this ranking. And for that reason, I don’t think that it should be part of the ranking because you’re penalizing a school for letting in more successful people.

But there’s a benefit. [00:05:00] To attending. Like, first of all, if you are a more successful person, think of the opportunity cost that you’re giving up. So the fact that these schools are able to lure away people to give up two years of their salary, in order to go to business school in the first place, I think is a pretty good indicator of the desirability or the perceived desirability of those programs.

Also, I do think that there is merit to thinking about like, who are my peers going to be in a business school? and. If a school is attracting people who were more successful prior to business school, I actually think that that is an indicator of the quality of the school, not only because it shows the people that are willing to give up those two years of salary, but also think about who the peer group is once someone is in the school.

Right? That means that if you are attending one of these schools. This percentage isn’t as high, but you’re surrounded by people who, prior to business school, were already achieving on a different level. And also after they graduate, they continue to achieve on a different level. True. The slope is not as sharp.

Right. But the.

[00:06:00] Result is a larger number. So I think that this implies that perhaps at the school itself, you might be surrounded by people who are driven. some people might say more competitive, which might not be everyone’s cup of tea, but people who are more driven and also after they graduate, they continue to be driven.

And so I think that also implies something pretty powerful about the ultimate benefit of the network because business school isn’t just the two years you go there and it’s not just that first job you get out of school or that third job you have five years out of school.

it’s also who’s your network gonna be and, and who are you gonna call 10, 15, 20 years after graduation? To invest in your company or to partner with your company or to start a company with. so I do think that there is value to attending a school and to have your peers during school and after school be people who were, for lack of a better term, high performers.

[00:07:00] I don’t think that this should be punished because I do think that this does yield a better business school. Experience and a better result in the long term. And so my quibble, again, I love this metric. I think this is an amazing metric to provide, but my quibble is that this should not be given honestly, any weight at all, and certainly not the high level of weight that it’s given, because again, you’re punishing the schools that, you know, you’re basically indicating that I, what I would say is an indication of quality.

An indirect indication of quality, but an indication of quality all the same. You’re basically punishing the schools that have sort of higher quality, quote unquote, coming in. And, and that to me is. Counterintuitive and kind of wrong. And so that’s why I continue to think that this should not be, uh, reported upon.

Absolutely. Tell us. It’s important. I think it’s great to know. I love using this information, but I don’t think it should be used in terms of like, let’s figure out which programs are the , [00:08:00] quote unquote highest quality programs. But what do you think? What did I miss? let me know. Thanks.

Maria

New around here? I’m an HBS graduate and a proud member (and former Board Member) of AIGAC. I considered opening a high-end boutique admissions consulting firm, but I wanted to make high-quality admissions advice accessible to all, so I “scaled myself” by creating ApplicantLab. ApplicantLab provides the SAME advice as high-end consultants at a much more affordable price. Read our rave reviews on GMATClub, and check out our free trial (no credit card required) today!