It is the number one worry on the list of business school deans from New York to Newcastle: how to recruit the best faculty when fewer PhD students, the bread and butter of academic employment, are graduating each year and a growing percentage of the academic elite is turning to better paid Wall Street or City jobs.
In the US, Richard Sorensen has been watching the changing scenario during his quarter century as dean of Pamplin College at Virginia Tech. He is champion of the doctoral faculty shortage initiative within the AACSB, the US business school accreditation body, charged with finding ways to recruit more faculty. Six years ago, he says, US business schools had 1,600 PhD students graduating; two years ago they had just 1,100.
Although that looks like a shortfall of 500 graduates a year the situation is even more serious. Of the 1,100 PhDs who graduated two years ago, 300 earned their degrees by mail and are not eligible for the tenure track advancement afforded to university-based colleagues.
The biggest faculty shortages are for those teaching finance - new finance PhD graduates are just as attractive to Wall Street and the City as they are to business schools. All of which means the cost of hiring finance faculty is rising rapidly. New PhDs who opt to teach finance at business school can earn salaries of $200,000 (£105,000) a year and more in the US. By comparison, the average salary for a new business PhD going into a US business school in 2005 (the last year for which data was available) was $93,780.
Marketing professors and those teaching accounting are also in short supply.
Prof Sorensen says the situation is not all doom and gloom, however, and that business schools in the US may be turning the corner. Initial soundings for PhD graduates for the 2005-06 academic year suggest that the numbers might be creeping slowly back - up to 1,200.
One idea being promoted by the AACSB to bring in more faculty is similar to that implemented by the Foundation for Management Education in the UK. That is, training those working in industry with appropriate qualifications to become clinical professors. Although a PhD is the preferred qualification, a masters degree or equivalent (an accountancy qualification, for example) with years of relevant commercial experience, would also count.
The FME gives two years' training and other support to managers making the transition if they hold a doctoral degree, and three years if they are educated to masters level. The AACSB plans to run five-day seminars starting next month to introduce would-be faculty to the ways of the academic.
The first schools taking part in the scheme are both in California, the Merage school at UC Irvine and the Marshall school at the University of Southern California, but executives from other regions and countries have applied for the programmes. Prof Sorensen believes there is a real possibility of ramping them up to develop more clinical faculty.
A second way for schools to attract top faculty, says Prof Sorensen, is to persuade those from other rigorous academic disciplines to switch to business disciplines. Many top US business schools recruit faculty this way.
The third solution for US schools, he says, is to recruit from overseas, although many are reluctant to do this. "Many of the US schools don't know the quality of the business schools in other countries," he says.
Such a move can also cause bad feeling. Many Canadian business schools say that once graduating PhD students get their certificates, they head straight for the higher salaries south of the border.
