Thursday, February 12, 1998
Graduating MBA students’ salaries reach all-time high
ANDERSON: Many decide to go to business school for more than the
money
By J. Sharon Yee
Daily Bruin Contributor
Graduates of the Anderson School of Management are earning more
money than ever, according to a recent report.
Students aren’t going to business school for the money,
though.
"My primary motivation for returning to school was (that) I felt
incomplete and didn’t really know where I wanted to end up," said
Jeffrey Ryskamp, a second-year Anderson student.
The Anderson School’s MBA Placement Report indicated that the
median annual salary for graduates with master’s of business
administration (MBA) degrees is $75,000, a 15 percent increase from
the previous year.
"Over the past five years, the demand and interest in MBAs at
Anderson and nationwide has increased, due in part to the recession
of the early 1990s," said Amy Yamashita, director of the Career
Management Center, which annually surveys graduating students about
their future plans.
Yamashita further explained that companies facing serious
downsizing problems during this time depended heavily on
consultants to help restructure their businesses. Many MBA students
go into consulting work.
Corporations, therefore, needed consultants to locate potential
growth areas, without having to spend unnecessary time training
people.
"One reason why companies are offering higher salaries is
because employers think that MBA holders do not need any training,"
said Akira Kikuchi, a first-year corporate-sponsored student.
"It is assumed they will become a profit center immediately
after they join the company," he added.
The report also indicated a median signing bonus of $20,000 for
non-manufacturing industries and $10,000 for manufacturing
industries.
Up until this year, students were not reporting signing bonuses
in great numbers.
"It wasn’t very common even three years ago, but it’s extremely
common now," said Yamashita. Companies moved to a signing bonus
structure when simply raising the entry-level salaries proved to be
too difficult.
The emergence of signing bonuses as one-time pay-outs, or
"forgivable loans," also led to either the creation of other
incentives (such as corporations agreeing to pay for moving costs)
or reimbursement of tuition fees.
"If they are offering high salaries, it can be explained
partially by economics," said Alvin Sargent, a first-year
entrepreneurship student. "Unemployment has been very low for a few
years, so naturally wages across many industries will rise."
Sometimes, students do not necessarily yearn for higher paying
salaries out of greed, but to pay off loans and support a decent
lifestyle.
"I’m always surprised that higher salaries are being offered.
Money is not always the major driving force behind students’
choices," Yamashita said. The primary reason why students come back
to business school is to choose a more challenging job, she
said.
"Companies are paying higher salaries because they have to,"
Ryskamp said.
"There are so many opportunities right now that students
literally have their pick of companies," he added, mentioning the
seven or eight offers he has already gotten.
"Other than paying rent and bills, I don’t care too much about
money," said Sargent. "I want to do what I love, and do it
well."
Data from the report has historically been used primarily by
companies interested in recruiting Anderson students, but has
recently attracted prospective students who are interested in
trends involving the increasing value of MBAs.
Ultimately, increased salaries are a result of increased
competition and opportunities among students.
Recruitment by consulting firms and other employers are heavily
dependent on a set of pre-admission variables, and previous work
experience is of utmost importance.
"Employers are less interested in hiring students that have no
work experience, and more interested in the quality of students’
work experiences," Yamashita said. On average, students work four
and a half years before entering business school.
Leadership positions and promotions are also factors that
employers look at when interviewing prospective candidates.
Started in the mid-’80s, the report asked graduates basic
information about their post-graduation jobs, like the name and
location of the company and their guaranteed annual salaries.
"If you don’t have an MBA, the opportunities for advancement are
not as prevalent," said James Pao, a second-year marketing and high
technology MBA student. "Often people who seek to earn a higher
salary seek to be in a position of power where they can be
influential at a greater level."
Pao hopes to attain a high-paying management position after
receiving his degree.
Yet others students may choose to walk away from huge salaries
and large starting bonuses to work for a small to mid-size company,
because they want to be a part of the growth stage of these
companies.
"Some students will go to the what they feel is the ‘right’
company, the ‘right’ opportunity, not for the money, but just for
the potential," Yamashita continued.