The growing popularity of European business schools means that MBA and EMBA students have a real choice when going to school. Using data collated from its series of business schools’ surveys published in 2005, the Financial Times has been able to draw a picture of the global MBA and EMBA market.
This data provides a snapshot of business school trends in Europe and the US as well as highlighting the behaviour of MBA and EMBA alumni. Salaries pre and post-degree, employment sectors and company sponsorship – or lack of – are all revealed.
The Financial Times MBA 2005 ranking attracted more than 1,900 respondents from 40 European business schools and 4,600 respondents from 71 schools in the US. The recent EMBA 2005 survey, although smaller than its MBA counterpart, also provided a healthy sample to analyse, with responses from 900 alumni from 26 European business schools and more than 1,400 alumni from the 51 participating US schools.
In the MBA 2005 survey, 9 per cent of those alumni who graduated in 2002 from US schools were European. However, US alumni did not find European schools so enticing: only 5 per cent of alumni from European schools were of US nationality.
For those participants studying for an EMBA – an MBA for working managers – the important factor when selecting a business school is location – proximity to work. However, a closer look at the EMBA 2005 survey reveals that 10 per cent of respondents who studied in Europe had worked outside the region before their studies, while 15 per cent of graduates from US schools had previously worked outside the US.
A comparison of pre-MBA salaries of US and European business school alumni reveals comparable earnings of $51,000. However, three years after graduation, whilst MBA alumni from European schools enjoy on average a 100 per cent increase in their salaries, alumni from US schools have seen a rise of 126 per cent.
It appears that among respondents from US schools, there is a correlation between higher salaries earned three years after graduation and the higher proportion of alumni who work in finance or banking, generally the most lucrative sectors to work in.
Of respondents from US business schools, 31 per cent worked in finance or banking, therefore benefiting from the highest salaries – $140,000. The proportion of MBA 2005 alumni from European schools working in finance or banking was lower at 22 per cent with a lower average salary of $119,000.
The EMBA 2005 data reveals no such relationship. Three years after graduation most respondents from both US and European schools were working in the industrial sector. The highest salaries were earned by those alumni working in law, although the lowest proportion of EMBA 2005 respondents worked in this sector.
The pre-degree salaries of respondents in the MBA 2005 survey were lower than those of the EMBA 2005 respondents. One reason for this is that EMBA alumni are older than their MBA counterparts and commanding higher salaries because they are further advanced in their careers. Sixty eight per cent of respondents from European business schools and 85 per cent from US schools were 30 years old or under when beginning their MBA, whereas the vast majority of respondents from schools in both regions in the EMBA 2005 were over 30.
The disparity in salaries between alumni from European schools and those from US schools is more noticeable in the EMBA 2005 survey, than in the MBA 2005 ranking.
Three years after graduation, EMBA alumni from US schools were earning more than alumni from European schools. The EMBA alumni from US schools also earned higher salaries before embarking on their degrees – a salary that was on average 41 per cent higher than those of the alumni from European business schools.
However, when comparing salaries from before the EMBA to three years after graduation, alumni from European schools have enjoyed a higher percentage increase – 69 per cent than the alumni from US schools – 51 per cent.
All reported salaries were basic salaries excluding bonuses and were all standardised to US dollars by applying purchasing power parity rates obtained from the World Bank.
A significant factor in deciding whether to study for an MBA or an EMBA is the cost.
Whilst there is little regional variation in company sponsorship of an EMBA, as expected there is a vast differential between MBA and EMBA sponsorship. While 80 pre cent of respondents in the EMBA 2005 received financial assistance from their employers towards the cost of the programme, this figure plummets to 15 per cent for respondents of MBA 2005.