Tara Case used her MBA to switch from the NHS to a 'considerably better' paid job in a not-for-profit start-up © Ian Forsyth/FT
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Tara Case has no doubt about the value of her MBA, both financially and in terms of building a second career.

The 46-year-old former occupational therapist used her degree from Durham University Business School to switch from clinical practice to a “considerably better” paid executive job. She is now chief executive of Ways to Wellness, a not-for-profit start-up providing care to 11,000 patients on behalf of the National Health Service.

“My title is CEO, but I am also chief operating officer and strategy head,” Ms Case says. “Without my MBA I wouldn’t have anywhere near the insight and confidence to deal with all these roles.”

For Chris Drinkwater, chairman of Ways to Wellness, who led the appointments committee that chose Ms Case, hiring an MBA meant paying a higher salary than a non-MBA would expect. But the pay was “a lot less” than the amount a CEO from the private sector would demand. It also helped the charity keep within its £250,000 per annum operating budget. Ms Case brought valuable experience as a former NHS employee.

“The fact that she had an MBA demonstrated that she was a self-starter, was motivated to develop her career and had the business skills,” Mr Drinkwater says. “We were also fortunate to find someone we could afford, given our funding.”

Business schools emphasise financial and professional rewards of an MBA to graduates. But the return on investment to employers is also a concern for those hiring MBA graduates, who must balance the cost of paying out higher salaries against the potential for greater value to the business.

Employer confidence is likely to lead to a slight increase in the number of jobs available this year. Of the companies surveyed by business school entrance exam administrator the Graduate Management Admission Council, 72 per cent plan to recruit MBA graduates this year, compared with 69 per cent last year.

MBA programmes will have to fight to fill those jobs with their graduates, as 40 per cent of employers surveyed said they expect to hire more people with specialist skills, such as those offered by master in management and master in finance degrees, compared with 28 per cent who said they would hire more for the generalist teaching of an MBA.

Business schools must do more to promote the return on investment of an MBA for companies, according to Scott DeRue, dean of Michigan’s Ross School of Business.

Mr DeRue claims that by his school’s rough calculations, the return on investment for a company from an MBA hire is typically negative until the third year of employment, which puts an onus on the school to explain the rewards of hiring their students. “We have to prove their value to recruiters,” he says.

Mr DeRue worries that big-tech employers will set up their own leadership training companies if business schools do not prove the worth of MBA graduates: “Amazon says, ‘If you can provide students with the right mix of business and data analytics skills, then we will have them’.

“If we do not do that, they will do what they have done to every other industry where they have seen an unmet need and become a competitor.”

The best proof of the return on investment for employers of hiring an MBA graduate is a willingness to return to campus to hire more, according to Andrea Masini, head of the MBA programme at HEC Paris. The number of valuable “block” hirers — defined by HEC as companies recruiting more than one MBA graduate from a class — has increased for the past four years and last year accounted for 44 per cent of all placements, up from 20 per cent in 2014, Mr Masini says.

About 80 per cent of HEC’s MBA graduates are hired by large companies, many of which are looking for people with entrepreneurial skills to work on innovative projects. The benefit of such hires cannot be measured in financial terms alone, Mr Masini says.

“These companies can get technical skills from younger students taking specialist masters degrees. But what they really need is leaders, which are only found on the MBA programme.”

Arjun Duggal believes his MBA has a financial value for his employer Anheuser-Busch InBev, the world’s largest brewer. The Indian-born graduate of Iese Business School joined the company on a 10-week internship last year, during which he created an online dashboard to help the procurement arm track purchases of coasters, beer glasses and other branded materials.

The dashboard helped that team shave 20 per cent off purchasing costs last year, according to Mr Duggal.

He thinks his training at Iese enables him to spot opportunities others would not — skills that are hard to measure. Since joining AB InBev full-time last June, Mr Duggal has found new ways to present data gathered by the European trade marketing team. “I add value by bringing a fresh pair of eyes to the situation,” he says.

Graduates from Iese’s MBA are a main source of hires for this team, according to its head Felipe Blasques.

“We value talent, people eager to grow and develop within the organisation and these MBA profiles have proved to be a good match,” he says.

What Amazon wants

Last year, Amazon hired more than 1,000 MBA graduates for roles across its business units, from product managers in its Amazon Web Services and Prime Air divisions to operations roles in its global network of fulfilment centres. Its first consideration is not the cost, but the value of skills to a particular business operation, according to Miriam Park, Amazon’s director of university programmes.

“We are an organisation that is hungry to build and create, and we find that MBA candidates bring a valuable combination of analytical thinking, business acumen and interest in doing big things,” she says.

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