Source: The Australian
AUSTRALIAN companies are knocking down the doors of leading business schools to secure the best master of business administration graduates.
They're also reinvesting in training, and in turn increasing demand for part-time MBA programs, which are typically well patronised by students sponsored by their employers.
"In Australia, I don't think the MBA has been as strong as in the US or even Europe and Asia," director of global development at Melbourne Business School Anna Parkin says.
"I think (that's because of) a lack of understanding of what an MBA graduate can bring to an organisation. But what we are seeing is a huge growth (in demand for MBAs) in Australia.
"The recruiters were a bit hesitant last year. Although the Australian economy was quite strong, they really didn't know what was coming. They are knocking down our door this year.
"They're saying, 'We want to come on campus, we want to build our profile, we want to get in early and see your best students'. We have had all the major consulting companies on campus in the past few weeks, doing cocktail parties, doing competitions to see what talent we have."
The experience at Melbourne Business School and others including Sydney's Macquarie Graduate School of Management, the Australian School of Business at the University of NSW, and the School of Business at the University of Technology, Sydney, reflects a global surge in employer demand, particularly in the finance sector, for MBAs.
Research conducted by QS TopMBA.com shows a 22 per cent increase in demand for MBAs in the financial services sector this year compared with last year, based on the 2010 QS Top MBA survey of 2145 employers worldwide, which was published last month.
The survey also shows a surge in demand for MBA graduates from schools in the Asia-Pacific region.
In Australia, part-time and executive MBA programs are typically the domain of local students who are in their early-mid 30s, in full-time employment and have management experience. Full-time MBA programs, on the other hand, are more often patronised by foreign students who eventually return to work in their home countries.
The exception to this is during an economic downturn, when local students who have been retrenched or are unemployed, for instance, are more likely to enrol in full-time programs.
Many MBA programs reported substantial increases in domestic applicants during the global financial crisis, but a decrease in international demand at some schools, including Melbourne Business School and the University of Technology, which both have large international student bodies.
This fall in demand has been attributed to the rise of the Australian dollar, better educational opportunities in Asia, and publicity surrounding apparently race-related crimes against Indian students in Melbourne.
"We've experienced a fall in our international applications for next year, but there's a small increase in the number of domestic student (applications)," director of the executive MBA program at UTS Ben Hunt says.
"We noticed that during the financial crisis a year or so ago, a number of our local students were unemployed. We are now seeing them increasingly getting work."
Most MBA students are motivated by career ambition and money. They want highly paid jobs and promotions, and/or to change roles, and some want to know how to set up and run their own businesses.
Research shows that students increase their salaries substantially on completion of an MBA, which can cost up to $84,000.
For instance, the increase in the average alumni salary of graduates of AGSM, the Australian School of Business, which ranked 36th in the London Financial Times 2010 global MBA rankings, is 87 per cent.
Melbourne Business School MBA graduates experience a 73 per cent increase in salary; and Macquarie Graduate School of Management graduates gain 58 per cent.
"Students want high salaries," Macquarie Graduate School of Management deputy dean and director of the MBA program Guy Ford says.
"They are generally in their early to mid-30s, they have topped up their education and they are looking for plum jobs."
About 80 per cent of MGSM's students are enrolled in the part-time program, and around 50 per cent of those students have their fees subsidised by employers.
"Companies recognise that they need to retain talent," Associate Professor Ford says.
"(Financial services) companies need employees who understand the numbers. They want people to be able to think ahead and interpret the signs.
"Many students say that finance is the area they've been working in. They don't want to be the chief financial officer, but they want to be able to engage with it and understand it."
Jobs in finance, particularly in investment banking, have traditionally been the most popular career track for MBA graduates. However, demand for good MBAs is increasing outside the finance sector.
MBA students have a range of professional backgrounds, including finance and banking, information technology, marketing, insurance, engineering, construction, pharmaceuticals, healthcare and retail.
Increasingly, traditional MBA recruiters such as banks, financial services companies and consultancies including Ernst & Young and Boston Consulting, are being joined by less traditional ones, such as Telstra, NSW Water and not-for-profit businesses.
"There's been a rise in the not-for-profit sector, which in Australia is very big," associate dean, postgraduate programs and director of AGSM in the Australian School of Business at the University of NSW, Chris Adam says. "The big players like Red Cross and Mission Australia are looking for management skills so there's been a little bit of a lift in that area."
UTS' Associate Professor Hunt believes Australian businesses recognise the value of an MBA more than ever before.
"The MBA, particularly in America -- the home of the MBA -- was designed to get your start in industry," he says. "Here in Australia it's played a different role. It's typically been a second degree for people who are employed. But I think employers are looking for MBAs more and more, and it's creating demand from students who feel they need that qualification from about age 30 or so."
To find out how Australian business schools fared in the FT's 2010 Global MBA rankings, go to http://rankings.ft.com/businessschoolrankings/global-mba-rankings.
Australian MBA programs are also ranked in the Global 200 Top Business Schools on QS TopMBA.com
