Hiring predictions from MBA recruiters suggest that MBA demand worldwide will set a new record in 2007. As world growth continues, demand for MBAs is spiralling, particularly in the service sectors of consulting and banking. General industry and technology also reported double figure growth in demand.

The QS International Recruitment Survey and Salary Report 2007 shows for the second year in succession an overall 24% (24% in 2006) increase in demand for MBAs in 2007, with the technology sector reporting a massive 29% (20%) increase, financial services 23% (24%), general industry 24% (18%), and consulting 22% (39%).

Chart: % Change in MBA opportunities by industry sector


Source: QS International Recruitment Survey and Salary Report 2007

Looking ahead, it seems that most recruiters remain confident that demand will continue to grow in 2008. Although recruitment agencies remain bullish, only a 6% increase in demand is anticipated in the technology sector, only 7% in financial services, but a robust 26% in consulting and 11% in industry.

What do the business schools think?
Chris Higgins of the Career Service at Wharton reports 779 companies on-campus to recruit Wharton MBAs in 2007, a 9% increase on 2006. “I started working at Wharton in April 2001, just in time to experience the dot.com and consulting crash. Demand for MBAs is cyclical and you never know what is around the corner, but the current market is great and the outlook is pretty good.”

Kim Keating of Tuck Business School, US, agrees that the MBA job market is heating up to levels not seen before. "We expect all the class to have offers by graduation." At London Business School, Graham Hastie, reports that 99% of the class of 2007 had paid summer internships – a record for the school. Lindsey McQuade, Careers Director at Cass Business School, reports a 100% increase in on-campus recruiting since 2005, with continued growth this year, "benefiting from the booming job market in consulting and the City."

QS Global-Workplace (http://www.global-workplace.com/), a jobs site operated by QS on behalf of many of the world's top business schools saw over 10,000 new MBA jobs added to the site during 2006. Mike Holmes of Global-Workplace says, "...the big demand for MBAs last year came from the service sector – banks and consultancies – not just the big name firms, but also many smaller organizations. In 2007, we are seeing more technology companies competing to hire the best MBAs. An ongoing trend in recent years is for MBA alumni, who are now in a position of hiring responsibility, to return to their school to pick up new talent."

What does the MBA mean to recruiters?
The MBA (Master of Business Administration) is a graduate management degree, which prepares professionals for management responsibility. It is one of the best-known degrees in the world, and more people take it than any other postgraduate course. Deciding to take an MBA is a crucial step in an individual's career.

A growing number of companies all over the world now see a top MBA as an essential management entry-level qualification. Without an MBA, it is almost impossible to become an analyst at a leading investment bank, or a senior consultant at a top consulting firm. In recent years, it has become more common for business development managers and technology managers also to take an MBA to help them make the next step in their career.

An MBA qualification is a pre-requisite to joining many banks around the world, at the level of Associate. Dee Clark, MBA Recruitment Manager at Goldman Sachs in London says, "We recruit MBAs to develop future leaders and Directors, add value and strategic thinking, diversity, international experience and networks." Jacinta Low of OCBC Bank, Singapore says “We view MBAs as our pipeline of future leaders. As MBA graduates, they are expected to accelerate in their learning and contribute to the organisation quickly. Their work experience also makes them a more stable and mature workforce, compared with fresh undergraduates.”

For the consulting sector, MBAs are a source of “smart people who can think strategically and in a structured manner” according to Mithran Doraisamy, Ernst & Young. John Fraser, Principal at Fraser Dawson Management Consultancy adds "A good MBA will enhance the student's business awareness (particularly of areas in which they don't have direct experience) and, thus, should improve their contribution to a subsequent employer."

But it is not just the service sector where demand for MBAs is booming. Since the turn of the millennium, more and more industrial companies have commenced recruiting MBAs, targeting a broader number of business schools than ever before. Some are looking for a skills match - Daniela Grienwald of Hilti Corporation, an industrial holding group in Europe says "The combination of a technical study background, relevant work experience and an MBA makes a good fit for companies like Hilti." Others, like William Grant Johnston at GE, are looking for raw talent – “Experience and educational pedigree, backed up with exposure to a wide variety of life and business experiences.”

Chart: Long-term index of MBA recruitment 1090-2007

Source: QS TopMBA.com International Recruitment Survey and Salary Report 2007

The chart above shows the long-term trend in MBA hiring worldwide, by sector – this unique perspective is available only through QS Research – the only organisation which ahs been tracking MBA demand around the world since 1990. Consulting and financial services, especially investment banking have rebounded particularly sharply. These two sectors will account for 50% of MBA hires at many schools. Additionally, the absolute number of MBAs hired into the consulting sector has more than doubled since 2003 and will have trebled if 2008 forecasts are achieved.

Beware of the past
At the same time, it is always worth expressing words of caution. A recession as seen between 2001 and 2004 is not on the cards, but with falling house prices, a growing deficit in the USA, and rising interest rates, a fall in MBA demand in some regions in 2008 is possible. Chris Higgins at Wharton cautions “MBA candidates need to remain flexible about their career aspirations.”

The good news for business schools is that MBA applications are again on the rise and competition for places is intensifying once again. Rose Martinelli, Associate Dean of Admissions at Chicago Graduate School of Business reports that domestic US applications have increased by 100% in two years, whilst international applications have increased by over 30%.

In most countries around the world, we see a rise in demand for MBA places amongst people who seek a career change or who wish to start their own business. These young professionals are trying to time their MBA so that they graduate into a "hot" job market, making 2008 start dates look very attractive, but with entry into top business schools increasingly competitive.

Written by: Nunzio Quacquarelli, QS Top MBA Career Guide