RALEIGH, N.C. — Three years of an economic recovery characterized by sluggish job growth is proving to be a significant deterrent for would-be Master of Business Administration 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.
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 the business school at Meredith College in Raleigh.
“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.”
Sherry Wallace, director of MBA admissions for the full-time program at the University of North Carolina-Chapel Hill, 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 you’re down three or four years,” Wallace said.
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 country’s economic woes have only made that decision tougher, particularly since many students take on considerable debt to finance their degree.
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 he’ll end up assuming about $50,000 in debt in the next two years to fund his ambition at UNC-Chapel hill, 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 economy’s woes.
“I didn’t 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 North Carolina State University.
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, Caterpillar’s building construction products division, which is based nearby in Cary, N.C. That was especially attractive to Westrich because, unlike most MBA students, he didn’t 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.
Sheryle Dirks, associate dean for career management at Duke University’s Fuqua School of Business, is upbeat about the current MBA job market. But she cautions that it’s 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 aren’t 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.