The workload is arduous, the costs daunting and the repercussions on home and social life considerable. Is it all really worth it? Many people seem to think so: every year 8,000 MBA students graduate in the UK from over 100 business schools and the number is growing.
According to a recent survey by the Association of MBAs, the average increase in salary experienced by its 6,000 members after graduation was 27 per cent, after adjusting for inflation. Those following full-time two-year courses did best, with salaries increasing by 73 per cent. But the main motivation in taking an MBA for most of the 1,500 respondents to AMBA’s survey was not pay but to improve their job opportunities.
For Philip Hatton a full-time MBA at Bradford certainly did that. He is now a senior consultant with call centre and customer management consultancy Merchants. “My MBA was an extremely positive career move from an engineering background: it pushed open a door into consultancy and really augmented my salary,” he says.
AMBA’s survey identifies a major shift post-MBA into management consultancy: only 3 per cent of respondents were working in the sector prior to their course but that figure rose to 15 per cent after qualification. Figures from the London Business School corroborate this; roughly 10 per cent of its 195 graduates last year had been working in the sector prior to the course, while the number going into it after graduation was 37 per cent.
For those consultants who have set their sights on a career with a leading strategy firm an MBA is essential – but it can’t just be any MBA. According to research by ADD Resources, a search and market intelligence services consultancy, strategy firms like McKinsey, Bain and Boston Consulting Group together take on around 900 MBAs a year but, says senior partner David Warren, they generally only target the top-notch schools like Harvard and Wharton in the US, INSEAD, IMD and LBS in Europe.
The cost of an MBA at the top schools is considerable – a full-time course at LBS will set you back #21,000 in fees with the salary loss on top.
An offer from a big strategy firm could reimburse your fees and give you a fat sign-on bonus but there are no guarantees. Ian Tomisson, a director at recruitment consultancy Douglas Llambias, says it can be a risky move. “I’ve known people graduate from INSEAD owing #30,000 and go back to almost the same job they left before the course,” he says.
“If all you want to do is broaden your understanding of the business process do it part-time or by distance learning.”
Says Chris Sale, director of recruitment consultancy Prism Executive Services: “For a minority the MBA can offer a step change in the level of role and responsibility. But for the vast majority an MBA should be viewed as a string to a bow – never a minus, usually a plus – which will help them in some way in their career.”
Tomisson agrees, adding: “Employers look beyond the piece of paper that says MBA to what the candidate has achieved up to date. It is not the MBA itself but experience that they can sell to clients that they want.”
He concludes: “An MBA should be seen as a cherry on top of the cake, not a replacement for the ingredients.”
A part-time MBA at Cranfield convinced Kate Hook, executive director of the Institute of Management Consultants, of the benefits of such a course. “It’s a good way of getting the big picture in a risk-free environment,” she says. She wouldn’t advise consultants to give up work to do one.
“There is much more value in doing a part-time or distance-learning course because you can take learning from work into the MBA environment and vice versa and put it into practice immediately to the benefit of your employer and your clients.”
However, she warns, a hard pressed consultant, who already works very anti-social hours, may find it hard to cope with the work involved. “I had to put in 20 hours’ work a week,” she says. “You’ll be taking time out of your fee-earning as well as your social life.”
An understanding employer, who sees the value of an MBA is vital, then.
Many of the big consultancies already sponsor employees to do such courses.
And, according to one Big Six recruitment director, such is the awareness of the qualification now that “a high proportion of our graduates coming on board are asking us for that MBA further down the road”. He thinks fostering the MBA is of value to the business in a number of areas. ” It enables us to have a larger network, a greater conceptual capability within the organisation,” he says. “MBAs show an ability to think outside the box-but it can make them arrogant.”
Ernst & Young’s director of recruitment Nicolas Mabin says: “We tend to encourage people to do an MBA by distance learning rather than taking a year out-like all growing consultancy firms we are resource-constrained.” And, he says wryly, an employee who takes a year out is more likely to succumb to other offers because they have the freedom and time to roam the marketplace. “Part-time courses are not offered because of client demands,” he adds. “They would not understand a part-time consultant.” And how do those clients view the MBA itself? “It has to be backed up by experience,” says Mabin. “They are less impressed by lots of theories.”
Generally, says Mabin, the motivation to do the course comes from the consultants themselves and this seems to be the case at most of the big consultancies. Says one MBA graduate: “As an IT consultant intending to move into strategy, I wanted to learn how to handle clients with more complex issues.” He found a partner who would act as sponsor and prepared a business case to persuade his firm to allow him to do an MBA. Although he gained a full-time place at LBS, he opted for a part-time course at Cranfield. His firm paid half the fees and all the ancillary expenses.
“I considered the full-time course but dismissed it on the grounds of cashflow,” he says. “I did a break-even forecast and reckoned on an eight to 10 year payback.”
He would advise anyone considering a full-time MBA to do the same. “The two important figures are how much you are earning while you are doing it and how much you’ll be earning at the end of it,” he says. “It’s a high risk strategy.”
He thinks the MBA was worthwhile although tying the work in with his fee-earning duties was, at times, a nightmare. “It has given me the wherewithal to get to the next plateau of my career – and an understanding of lots of areas.
But, he says, for those doing part-time courses there can be disappointment in store. “Employers don’t acknowledge your new skill base in terms of salary and use of those skills. To gain a step change in responsibilities and salary more often than not you would have to change firms.”
A predominant issue for consultancies who sponsor MBAs, then, is making sure that graduates stay with the firm after the course is finished.
Says one recruitment director: “You must have an infrastructure to support them: otherwise they will get frustrated because their new skills aren’t being used.”
Arthur Andersen is one firm which has taken these considerations to heart.
It recently set up an MBA initiative with Warwick and Manchester Business Schools, spreading the course over four years and adjusting the chargeable hour targets of those embarking on it. Says director of performance and learning Andrew Pawley: “You can only improve retention by utilising skills and offering good prospects.”
He says one of the main benefits of an MBA is the diversity of background and experience among students. “We want people with at least four years’ experience,” he adds, “candidates will only gain value if they bring value.”
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