Posted by: Louis Lavelle on August 20, 2009
By Anne VanderMey
Anyone who gets their MBA has a reasonably high expectation of coming out of the program with a higher salary than when they went in. That’s great in an upturn, when companies are happy to pay for the prestige and efficiency of top talent, but it might not be so great in a downturn, when the top priority is to slash payrolls. In the dark days of the recession, being able to negotiate a higher salary than your colleagues might not seem like an asset so much as a liability. MBAs have reason to fear that their degree won’t insulate them from the crisis, and that it could instead make them a target.
That’s just one of the reasons this recession looked like it might be a particularly bleak one for business school grads. The collapse of the MBA-heavy financial sector and the degree’s bad press were just icing on the cake.
However, a new report shows that those fears may have been unfounded. According to a recent Catalyst study , just 10% of MBAs lost their jobs during the downturn, and fully 34% of them received a promotion.
It’s hard to say exactly how this compares to rest of the population, says NYU professor David Backus, as fluctuations in the labor market make it tricky to track what percentage of overall workers were laid off. But it does look like MBAs were spared the bloodbath that might have been expected in the wake of the crisis. In fact, it looks like the MBA confers some job security after all.
The Catalyst study tracked 873 “high potential” employees, MBAs who graduated from one of 26 top programs between 1996 and 2007. About 94% of those employees worked the same number of hours or more during the recession, as they had before. It also found that women in executive positions were three times as likely to get fired and slightly less likely to be promoted than men.
Although the overall results will likely be comforting for MBAs, it should probably be noted that the study only paints a partial picture of the job market. One of the defining characteristics of this recession is not mass layoffs (though that’s happened too), but little or no hiring. It will be interesting to take a look at schools’ 2009 employment data when it’s released for a clearer picture of what the recession means for B-school grads.
In the meantime, let us know your thoughts. Did your MBA confer a degree of job security, or did it make you a cost-cutting target?