Trends in Business: MBA Programs Prepare Students for Leadership Roles in Technology

Technology is changing. And so are the demands of the leaders and professionals in the field. Recently, zdnet, a technology-focused news and research site, published an article describing the changing demands of leaders and employees in technology. No longer, the article states, is technical proficiency enough. Technology can no longer exist as a stand-alone function, but must be thoroughly integrated into the business. And tech practitioners must be able to take a broader perspective that includes a thorough understanding of other business functions and how technology fits in amongst them to drive the organization’s mission. “It's important to start to learn about finance, business processes, and other strategies that make up how your product or solution comes full-cycle for your organization," said Nag Vaidyanathan, Chief Technology Officer at Duck Creek Technologies. "How you collaborate with other functions is critical to the results you can achieve." 

Haluk Saker, a Senior Vice President at Booz Allen Hamilton, notes that the speed of technological change is such that professionals and managers need, "…problem-solving skills versus language-specific skills. IT professionals should focus on learning, disrupting the status quo, and continuing to gain skills across different domains that interest them. This type of professional, with an innate curiosity and an aptitude to grow as a leader and influencer, is the one that will be able to face tomorrow's toughest challenges head-on," he said.

MBA programs are at the forefront of understanding transformation in the technology industry and a number of leading schools (noted below) now offer shorter, and more focused Tech MBA programs. They include core requirements in technology, in addition to typical MBA requirements in general management and leadership. 

• Johnson Cornell Tech MBA: This is a one-year MBA conferred by the Johnson Graduate School of Management. Graduates will have a full understanding of the startup and tech ecosystems, and will be prepared to manage product teams, and lead tech companies.

• NYU Stern Andre Koo Tech MBA: This is a one-year STEM-designated MBA program conferred by NYU Stern. Graduates will be qualified to join startups and mature tech companies at the forefront of innovation and technology, and will be prepared to accelerate their careers in technology or start their own businesses. 

• Northwestern Kellogg MBAi: This is a joint degree between Kellogg and the McCormick School of Engineering. Graduates will be prepared for careers in tech operations, analytics, and innovation leadership. 

• Foster School of Business Technology Management MBA: This is an 18-month work-compatible MBA conferred by the Foster School of Business, and is designed to prepare graduates to accelerate or re-direct their careers, or to start their own businesses.

• IE Business School Tech MBA: This is a one-year MBA conferred by the IE Business School. It is designed for students who want to develop their career in the technology sector or in tech-centric job roles, and who seek to become fluent in the language of business and technology. 

In addition to the Tech MBA program options, many schools are integrating technology tracks into their full-time, two-year MBA programs. Fordham University’s Gabelli School of Business has created a secondary concentration in blockchain, and Georgetown’s McDonough School of Business now offers a handful of classes in fintech and crypto. And this trend is just getting started. Recently, several elite schools have announced incoming investments earmarked for building out technology initiatives. The USC Marshall School of Business received a $5 million gift to establish the Digital Assets Initiative, which will establish new curriculums and research opportunities in cryptocurrency, NFTs, and blockchain. Similarly, Harvard Business School is establishing the “D3” Institute to promote collaboration and research in digital and technology, data science, artificial intelligence and machine learning, and design thinking. And University of Pennsylvania’s Wharton School recently received an anonymous $5 million donation (in bitcoin) that will support the Stevens Center for Innovation in Finance, which focuses on fintech research and education.

University of Pennsylvania’s Wharton Named Top MBA by the Financial Times

The Financial Times just released its 2022 MBA rankings and University of Pennsylvania’s Wharton school is at the top. This marks the school’s eleventh return to the first rank, after last receiving the honor in 2011. Columbia placed second, which is its highest-ever showing in the Financial Times ranking. U.S.-based MBA programs had a strong showing overall, taking ten out of the top fifteen spots.

Harvard Business School Sets a New Agenda Focused on Positioning Business to Solve Society’s Biggest Challenges

Srikant Datar took over the leadership of Harvard Business School in January 2021, mid-way through the academic year, and in the midst of the covid pandemic. Rather than derailing his vision, the pandemic, with its emphasis on technology and hybrid learning formats, has actually expedited it. “COVID is the passage to the school’s future. Without any doubt, it has been an extremely exciting and rewarding year,” he said.  

Datar spent a considerable amount of time seeking input from the HBS community when building his agenda. He spoke with every faculty member and facilitated individual and small group meetings with alumni, students, staff, and others to understand their goals and perspectives. Datar then defined three “aspirations” for the school, “...stretching HBS and its learners beyond notions of merely personal success toward becoming, collectively and individually, driving forces in redefining the role of business in society around the world—addressing inequality, exclusion, climate change, and other intractable problems. Second, directing HBS’s research to action, ensuring that the leaders it trains or influences change practices and engage human differences to enhance the constructive role of capitalism. And, finally, the school must transform learning, extend its reach, and work with its students throughout their careers.”

Datar also named the “engines” that would make these aspirations possible: recruiting a diverse array of talent and enabling their success, undergoing a digital transformation for education delivery and the HBS “research infrastructure”, and “expanding and deepening ties” to the greater University, particularly into the humanities. 

To activate the aspirations, Datar announced that Harvard Business School will be creating two institutes, one focused on business and society, and the other on digital and technology. These institutes will provide a structure that facilitates faculty interactions, student engagement with research efforts and new technologies, and space for alumni and businesses to access, train and collaborate using the latest research.  

The Institute for the Study of Business in Global Society, which will be led by Debora L. Spar, will house the following activities:

• HBS’s academic partnership with OneTen, an organization dedicated to advocating for black individuals who do not have an undergraduate degree, but wish to use skills and knowledge to obtain “family-sustaining careers”

• Climate change research and the promotion of carbon neutral goals by considering alternative accounting metrics

• Economic development within mid-American cities harmed most by de-industrialization; researching promising engines to spur business and economic growth

• Social Enterprise research and the development of new models to enhance impact

The second institute, currently labeled “D3,” will be led by Karim R. Lakhani and focus on digital and technology, data science, artificial intelligence and machine learning, and design thinking. Clustering the topics together will optimize research efforts and maximize the impact for HBS and business overall. 

While the HBS priorities are centered on two key pillars, business and society, and data and technology, Datar says he considers these components two parts of a whole. “When I think about the challenges we’re talking about,” Datar said, alluding to both the school and society writ large, “every time we have talked about technology on one side of the coin, on the other side is humanities and people. Any time you let those two get out of synch, the opportunity for division arises, and with it, economic harm. Leadership at the core means always thinking about impact on people, and on what you are trying to achieve through an organization.” 

Read the full interview between Srikant Datar and the Harvard Magazine here.  

Biden Administration Remains Under Pressure to Move Forward with Student Debt Cancellation

On May 1, 2022, which is just three months away, federal student loan payments will resume. This comes after a two-year period during which borrowers could choose whether or not they would make payments. As the date nears, the Biden administration is under pressure to make good on campaign promises to reduce student debt for millions of Americans with federal loans. Last week, 85 Democratic members of Congress sent the President a letter urging him to, “...direct the Department of Education to publicly release the memo outlining your legal authority to broadly cancel federal student loan debt and immediately cancel up to $50,000 of student loan debt per borrower.”

But it is still unclear how President Biden will move forward. During his campaign, he promised to forgive up to $10,000 per student loan borrower, but he has since expressed hesitancy to extend loan forgiveness to those attending elite schools or who obtained professional graduate degrees, and have strong repayment prospects. In a press conference last month, President Biden declined to comment on a question about student loan forgiveness. 

An article in the Wall Street Journal speculates that the Biden Administration may opt to forego blanket debt forgiveness for an alternative path, “...by starting a regulatory process, complete with input from stakeholders, to set up a debt-forgiveness program that targets people most in need.” This path may allow the administration to avoid a potential Supreme Court battle that an Executive Action may spur.

In the meantime, the administration has moved forward with more targeted loan-relief initiatives, such as a revamp of the long-standing Public Service Loan Forgiveness (PSLF) program. This would allow those who have worked for a public or nonprofit organization, and also made monthly payments for a ten-year period (120 payments) to have their loans forgiven. A revamp is exciting for current business, medical, and law students who wish to go into public service, and necessary. The original program, which dates back to 2007, burdened participants with bureaucratic hurdles, and only provided benefits to a small percentage, about 16,000 out of 1.3 million. 

Harvard Round Two Action Expected Wednesday

Late last week, the HBS Director of Admissions announced that on Wednesday, February 2nd at 12:00pm EST, all Round Two applicants or those Round One applicants who received “Further Consideration” will receive an update via the Application Status page. At this time applicants will either receive an invitation to interview or will be released from the process.

Related blogs:

Top 10 Tips for the MBA Behavioral Interview 

MBA Interviews: When the Interview Requires More than an Interview

U.S. News’ Best Online MBA Ranking Released with Three-Way Tie for First

Yesterday, the U.S. News & World Report released its rankings for the best online MBA programs of 2022. In a three-way tie, Indiana University’s Kelley, University of North Carolina’s Kenan-Flagler, and University of Southern California’s Marshall all took the number one spot.  

UNC’s Kenan-Flagler received the top ranking for the second year in a row, sharing the 2021 accolade with Carnegie Mellon’s Tepper School of Business (ranked fourth in 2022), while Indiana increased two spots from last year and USC increased three spots. 

Indiana’s Kelley also ranked highest for Best Online Finance MBA and Best Online General Management MBA.  

U.S. News & World Report Top 10 Online MBA Programs 

MBA Curriculums Expand to Include Content in Environmental and Social Conscientiousness

Sustainability. Social enterprise. Impact investing. These words may have been in the course titles of fringe electives a decade ago, but today they are quickly becoming mainstream components of leading business school curriculums. This is well-evidenced by the Financial Times Responsible Business Education awards, which celebrate the best “examples of work by business schools seeking to focus on people and planet alongside profit” in three categories: academic research, teaching cases, and alumni change makers. There is an emerging trend for business schools to think and teach about outcomes and values beyond profit maximization. 

A recent New York Times article on Environmental, Social, and Governance’s (ESG) increasing role in business education and the workforce noted that the incorporation of ESG topics within the MBA is being driven by student and employer demand. At Yale’s School of Management, sustainability is integrated into required core courses such as microeconomics, accounting, and corporate finance, while Duke’s Fuqua School of Business has added a new core course titled Business and Common Purpose. At University of Pennsylvania’s Wharton, there are more than 50 undergraduate and graduate courses related to social impact, and at Harvard Business School, an elective course on social enterprise had 600 matriculants (a sizable increase from 251 in 2012). 

In the past, there was a sense that MBA students who wanted to go into ESG could not command the same salaries as those following more traditional—consulting or finance—career paths. A study, not yet published, by the Yale School of Management including more than 2,000 students across 29 business schools, found that over half (51 percent) of students would accept a lower salary to work for an environmentally responsible company, an uptick of seven percentage points from five years ago. Students’ preferences are obviously changing, and so is the market. 

According to McKinsey, global sustainable investment grew by about 68 percent between 2014 and 2019, reaching over $30 trillion. This has created a number of new job opportunities, and the demand in the market has put upward pressure on ESG-related salaries. Further, the relative “newness” of the field also creates an appealing opportunity in terms of career growth, with relatively few people standing in front with seniority. MBA graduates can advance quickly. Recruiters tell the New York Times that filling experienced-hire and senior roles in sustainability is challenging; this may also benefit MBA graduates by providing them with early access to more senior positions. 

There also appears to be a growing need for ESG skills across industries. “There’s this tension for any student who wants to pursue sustainability, which is, ‘I have massive debt, but I also want to do good,’” said Bethany Patten, the Senior Associate Director of the Sustainability Center at M.I.T.’s Sloan School of Management. However, she points out that jobs at banks and investment firms that require sustainability skill sets, as well as finance, are offering salaries that are generally on par with typical finance salaries. 

The opportunity for ESG roles in the marketplace is ripe, and many students are interested in pursuing them, but the number of graduates who take purely ESG roles directly out of an MBA program remains relatively low. At Wharton, just 1.8 percent of graduates went into social impact work. At Stanford, the proportion was higher at 19 percent. But Dr. Costis Maglaras, Dean of Columbia Business School thinks these numbers will continue to increase. “Over the last two decades if you ask yourself, ‘What is the thing that really transformed businesses?’ It’s been technology, data, analytics. If you were to ask what will transform businesses in the future, I believe it’s going to be climate change.”

Technology Growth Expected to Drive MBA Hiring

The 2022 hiring outlook for MBA graduates is strong. After the early stages of the pandemic caused demand to falter for 2020 graduates, both hiring and salaries have rebounded to pre-pandemic levels. The QS Global Employer Survey 2022, which included over 5,000 MBA employers from 40 countries, found that 70 percent of US employers expect to hire more graduates within their organization in the next year.

Technology firms, which have shown consistent growth throughout the pandemic, are expected to drive demand for MBA graduates. Technology recruiters' interest in hiring MBAs has grown over time according to the 2021 GMAC Corporate Recruiters Survey, with the number of technology recruiters planning to hire MBAs climbing from 80 percent in 2019 to 96 percent in 2021. Similarly, the QS Global Employer Survey found that just over 50 percent of US companies offered MBA graduates roles in IT and technology, in both 2020 and 2021, compared to 27 percent receiving those functional roles globally (2021). 

Amazon reported that in 2021 they increased MBA hires by 20 percent due to growth in demand for their products and services. Speaking to BusinessBecause, an Amazon spokesperson explained that the company hires were based on demand and that, “We work with business teams across Amazon to determine their need for student talent each hiring season.” The spokesperson also noted that they expect hiring to continue to increase in 2022. Other large employers of MBAs in technology include Google, Microsoft, and Apple. 

Consulting will also continue to play a large role in MBA hires. With the US management consulting market size projected to grow by 4.1 percent in 2022, demand for MBAs from consulting firms is expected to remain high. GMAC’s Corporate Recruiters Survey found that 95 percent of consulting recruiters plan to hire MBAs. And, In 2021, 46 percent of those recruiters said that they expected to increase their MBA hires, compared to just 21 percent in 2020. McKinsey, BCG, and Bain have historically employed the largest number of MBA graduates and will likely continue to do so. 

As companies throughout the US struggle with hiring and retaining the skilled workforce that they need, MBA graduates are well positioned to thrive. Economists are speculating that omicron could continue to impact the overall employment rate, pointing out that, across industries, quit rates have remained high, but hiring rates remain even higher. “Workers being able to quit their jobs to take better ones is a very good thing and signals an economy with healthy dynamism,” said Economic Policy Institute President, Heidi Shierholz. “A high quit rate combined with strong job growth is absolutely something to celebrate.”  

Related blogs:

Amazon to Include Larger Swath of Schools in MBA Recruiting Using Virtual Meetings

Our Ways of Working are Changing. How should MBAs Prepare?

Our Ways of Working are Changing. How should MBAs Prepare?

The “Great Resignation,” a high rate of employees leaving their jobs month-over-month, emerged as one of the key stories in 2021. Many initially hypothesized that the mass exodus was driven by empowered employees seeking greater mental well-being and flexibility. But the truth may be a bit more nuanced. Experts are now suggesting that many are leaving their employers out of necessity due to covid-related child-care woes and health concerns. Others are simply transitioning to new jobs with higher pay or flexibility. Either way, the trend shows that employee needs and priorities are changing and that the workplace must adapt. 

To help prospective and current MBA students better understand this new and dynamic environment, Carrington Crisp, an educational consultancy and research firm, partnered with the Executive MBA Council (EMBAC) and the Working Professional Task Force to research the changing nature of work and learning. After interviewing 100 employers across the globe, the consultancy found five trends. 

• Increasing demands for flexibility: Among employers, 44 percent agree that the flexible working options offered during the pandemic are here to stay.

• Commitment to lifelong learning: Most employers, 86 percent, agree that employees will need to take part in continuing education initiatives to maintain relevancy throughout their careers. 

• Digital transformation: Continuing education activities will transition online for many organizations as budgets remain stable or decrease. Approximately 80 percent of respondents also expect that management and executive development will include online learning elements. 

• A focus on skills (new and old): Most employers recognize that leadership and communication skills will only gain in importance as employees manage increasingly diverse groups across generations and geographies. But employers also named newer skills such as digital transformation, artificial intelligence, operational efficiency, data analytics, and data-based decision making as critical. 

• Fast application of learning: Employees will be expected to apply their new knowledge to their environment quickly. 

Business schools will need to evolve too. Below, representatives from MBA programs discuss content they believe will soon be an essential part of a general management education. 

• People Analytics and Human Resources: Susan Fournier, Dean of Boston University’s Questrom School of Business, noted that there may be a greater emphasis than ever before on the role of HR in defining the “social architecture” of a company, and facilitating flexibility and other strategies that promote employee retention. Similarly, Charlie Tharp, an HR Management professor at Questrom, points to the key role that people analytics will play for businesses in the future. The world, he noted, is shifting from defining value in terms of physical assets to human capital (skills and abilities). As such, the role of HR and people analytics capabilities will grow in strategic importance.

• “Out of the Box” Management: MIT’s Sloan School of Management is teaching students to meet the moment through a speaker series, which started in 2020; the 2021 theme is “Building a Better World of Work.” MIT Professor Erin Kelly describes this moment in history as bringing an opportunity to managers to think more meaningfully about supporting employees in individualized ways—extending efforts beyond generalized workplace wellness initiatives and managing employees in ways that promotes sustainability, as well as physical and mental wellbeing.

• Leadership in Uncertain Times: Professor of Management at Boston College, Jerry Kane, notes that disruptions are inevitable, even looking beyond the pandemic, and that business schools must train students to navigate and lead through ambiguity, making decisions and moving forward with intention despite uncertainty. For example, he points out that employees are valuing flexibility more than ever and companies that aren’t willing to reconsider the old ways of doing things and make changes will lose out in the battle for talent. 

MBA Programs Position Graduates Well to Repay Student Debt

A Wall Street Journal analysis of federal student loan showed that graduates of almost 98 percent of MBA programs in the US made more money in salary within two years than they had accrued in debt for their degree. At the most prestigious of programs, such as Harvard Business School and Stanford’s Graduate School of Business, over half of graduates were able to repay their federal loans within two years of graduation.

It is important to note that this analysis only includes the salary and student loan debt for students who took out federal student loans. Many students also take out private loans at lower interest rates. Harvard’s Managing Director of MBA Admissions, Chad Losee, confirmed that over half of Harvard’s 2020 graduates (56 percent) graduated with debt, and that the average was $79,000 in combined federal and private loans. 

The high rate of return on investment for MBA programs may be attributed to the fact that many MBA students come into the program with work experience, which drives up the starting salaries they are offered at graduation. Additionally, many who work in high-paying industries such as finance and consulting tend to gravitate towards the degree, and return to those or other high-paying industries. 

Tuition costs and potential debt load, as well as possible starting salaries and cost-of living post-degree may be easy to overlook at first, but they are important to consider during the school selection process. 

Related blogs: Student Loan Forgiveness Receives New Attention Under the Biden Administration

University of Michigan’s Ross School of Business Unveils Free, Pre-MBA Quantitative Readiness Course Online

Last month, the part-time MBA program at the University of Michigan’s Ross School of Business released a new “pathway to entry” for prospective students. Students may now opt to participate in a free, online pre-MBA Quantitative Readiness course and submit a final exam score of 80 percent or higher in lieu of GRE or GMAT scores. 

The Quantitative Readiness course is estimated to take between 20 and 30 hours to complete, and includes six self-paced modules covering various statistical techniques and applications. Each module includes practice questions and a quiz, followed by a three-hour final exam encompassing all modules. The course description states that the material is presented in such a way that students who spend the requisite time studying will be able to pass the course. 

In an interview with Poets & Quants, Patricia Russo, Managing Director of Part-Time MBA programs at Ross, said that the initial impetus behind the program was to drive applicant diversity by introducing a new mechanism to showcase readiness, one that may appeal to those with less traditional quantitative backgrounds. So far, with almost 200 enrollees in the first month, student feedback has shown that the program is meaningful. In addition to creating an alternative to standardized tests, it has provided students with the chance to refresh their quantitative skills and increase their confidence prior to entering an MBA program. It also gives them a chance to “test drive the rigor of an MBA”. Furthermore, as the program is an entryway to part-time programs where most students work in parallel, Russo notes that the act of taking the course provides prospective students visibility into the day-to-day work of juggling MBA coursework with their work and personal lives.

There is no current plan to extend the entryway to full-time applicants at Ross, but many part-time MBA program administrators from other universities have reached out with interest in the course. 

The University of California, Davis to Pilot Innovative Tuition Deferment Plan for Online MBA Students

Last month, the UC Davis Graduate School of Management announced that it will pilot an interest-free, deferred tuition plan available to all future online MBA program applicants. The school, which was the first within the University of California system to offer an online MBA program, will be the first MBA program ever to offer a deferred tuition payment option. 

Within the pilot, admitted online MBA students will pay the first half of their tuition fees (approximately $50,000 of the total $105,480) as per usual. However, after the first 36 hours of credits are accrued, all tuition payments will be deferred. The second half of the tuition is not due until students have graduated or withdrawn from the program, and have a job and income totaling at least $3,334 per month (approximately $40,000 annually). Students will then pay approximately 10 percent of their gross income monthly until the second tuition payment is completed. The school notes that the exact time for payment fulfillment will vary depending on the graduate’s salary. Generally, they expect students to take about five years to pay off the sum, but acknowledge that it will be longer for those who go into lower-salaried careers. In addition to the tuition deferment, the program is innovative in key ways: 1) the payments are interest-free, meaning that students will never pay more than the total tuition figure, and 2) if a student loses their job, or drops below $3,334 monthly, they are able to discontinue payments until they are again earning at that level. 

Hanumantha R. Unnava, Dean of the UC Davis Graduate School of Management, told Poets & Quants that he believes this tuition deferment plan will drive the pool of applicants upwards by a magnitude of 20 percent, as many prospective students are interested in obtaining an online MBA without going into significant and immediate debt. The program’s administrator EdAid, based in London, agrees, and also claims the program will improve completion rates, drive access and diversity, and increase the revenue from each entering cohort.

Debt among MBA graduates has been well documented. However, the high debt carried by graduates of online MBA programs is not as well publicized. A 2019 article in Poets & Quants noted that “the average debt burden for graduates of at least 16 online MBA programs, in fact, is $50,000 or more.” The same article also said that for many schools, the average debt is well over that $50,000. For Pepperdine’s online MBA, the average debt for students came out to just over $96,000—slightly more than the total cost of the program— with 81 percent of graduates carrying debt. Pepperdine responded by saying that in a 2016 survey, three-fourths of respondents said that their online MBA equated to a promotion or salary raise. At least seven online programs, in 2019, had an average student debt over $65,000. 

The innovative deferred tuition plan may create a new model for online MBA pricing, and perhaps a consideration for other schools looking to attenuate the rising costs of MBA tuition. “I think there is going to be a widespread adoption of this model in higher education, and we are so delighted that we are the first school to do it,” Dean Unnava said.

As MBA Programs Begin to Discontinue Hybrid Learning, Virtual Recruiting Expected to Continue

Last month the Wall Street Journal announced that a number of prominent MBA programs will not offer hybrid learning this fall; the programs, including Columbia University, Stanford University, New York University, University of California-Berkeley, and Boston University will instead bring students to campus for in-person learning full-time. 

The decision is a nod to the importance of relationship-building within MBA programs, as well as an acknowledgment that recreating enriching networking opportunities online is almost impossible. Just last week, Jay Bhatti, a VC firm co-founder and Wharton School guest speaker, told Business Insider that, in a rapidly changing world, “The real thing that the MBA schools come down to is, hey, can I give relationships that are meaningful and for a lifetime?” Noting that major companies are relaxing degree requirements and the internet is democratizing access to knowledge, the MBA’s value predominantly stems from the relationships and networks that are cemented within their programs. J.P. Eggers, Vice Dean of MBA and Graduate Programs at NYU’s Stern School of Business, summed it up succinctly in the Wall Street Journal when he said, “Building new relationships online is hard.” 

Within hybrid programs, which many speculated would “emerge as a viable alternative to traditional two-year programs,” administrators speaking with the Wall Street Journal acknowledged the struggle that professors faced trying to meaningfully engage both online and in-person audiences. In fact, Eggers called blended learning models the “worst of both worlds” saying that, “Any time a faculty member is trying to split their attention between one set of students in-person and one online, it gets hard.” However, some schools, including Harvard Business School, plan to continue to offer online options for students who need them, such as international students who are not able to obtain the necessary visas. And other schools believe the technology used to support hybrid learning models can still be integrated for the benefit of students, for example, as a way to bring in guest speakers. 

Despite commitments from many schools to bring back the full MBA experience, this year will still bring a dearth of virtual company recruiting events. As many companies continue to grapple with restricted travel and how and when to bring employees back to the office, the companies have forewarned MBA programs that they will not be sending teams to campus. This, according to some, has been positive. “It actually made recruiting more accessible,” said Kristen Fitzpatrick, Harvard Business School’s Managing Director of Alumni and MBA Career and Professional Development, to Fortune Education. “By eliminating the cost and time required to travel for recruiting, it was easier for our partners to access our students,” she said. The use of online meetings for recruiting allowed companies to meet with a greater number of business schools than before. For example, while University of Pennsylvania’s Wharton School usually hosts 140 companies on campus in the fall, 175 companies were able to host virtual events with students. 

While it is expected that some companies will continue to value the cost-savings and expanded reach of virtual events, Fitzpatrick did acknowledge the likelihood that some recruiters will eventually return to campus, “As the impact of the pandemic starts to lessen and we go back to some forms of travel, we do expect a few of our partners to return to campus when it is safe to do so.”

Wharton Announces First Full-Time MBA Class in which Women Comprise the Majority

The Wharton School has become the first of the “magnificent seven” (M7) to announce, within its newest full-time MBA class, that more women gained admission than men. Women make up 52 percent of Wharton’s incoming class, which is the largest proportion in the storied program’s 140-year history and a large uptick from 41 percent the previous year. The remaining M7 schools have yet to release data on their incoming classes, but last year, the highest percentages of women were found at Harvard Business School (44 percent) and Stanford’s Graduate School of Business (47 percent). 

While women now make up the majority in both law and medical schools, parity has been harder to achieve within MBA programs. However, according to the Forté Foundation, a non-profit that promotes gender parity in business, the number of women in business school has steadily increased over the last 15 years. Forté has tracked female enrollment in about 50 full-time domestic MBA programs, and notes that while women made up only 30 percent of the total in 2005, that number increased to 39 percent in 2020. Also in 2020, a record-high 22 MBA programs enrolled classes that were over 40 percent women.

Is this a trend or an anomaly due to the effects of the pandemic on women in the workforce? Business schools saw a large uptick in applications as a result of the pandemic. And while the number of applicants from both sexes increased, according to the Graduate Management Admissions Council (GMAC), full-time MBA programs reported a 62 percent increase in applications from female students in 2020 compared to a 42 percent increase in 2019. 

Women, historically, have been more interested in seeking their MBA through hybrid and flexible models and the 2021 GMAC Prospective Students Survey showed that women reported a greater openness towards the hybrid learning models necessitated by the pandemic. Women were more willing to complete their degree online; 60 percent of U.S.-based women said that they were willing to complete more than 30 percent of their MBA degree online compared to just 52 percent of men. Similarly, women were more likely to agree that “career opportunities gained through an on-campus graduate business degree are the same as gained through an online degree” whereas men were more likely to strongly disagree (24 percent). 

While more data will be necessary to determine if the uptick in women applicants and matriculants is more than a response to a moment in history, there is room for optimism about the changes underway. Elissa Sangster, Forté Foundation’s CEO, expressed her pleasure that the pandemic didn’t deter women from seeking an MBA. “So many of our schools are hitting that 40 percent mark and heading north of it,” she says. “That’s going to change the dynamic already in business school and change the access point for women.” 

Role of Standardized Test Scores in MBA Admissions Evolves

During the 2020-2021 admissions season, many MBA programs introduced flexibility into their admissions process by waiving the GMAT/GRE requirement. And just last month, UVA’s Darden announced that it would extend its test-optional policy into the upcoming admissions cycle. The school’s current policy allows for students to submit GMAT/GRE or alternative test scores (including the LSAT, MCAT, or Executive Assessment). But students also have the option to request a waiver based on a provided alternative indicator of academic, personal, or professional achievement, which could include previous ACT/SAT scores.

Last year, Darden received around 1,300 waiver requests and admitted approximately 13 percent of the incoming class via test waiver. School representatives believe that the policy created a more equitable standard for admission while also “attracting a more diverse group of candidates.” Darden’s head of admissions, Dawna Clarke, also noted that Darden is employing data analytics to better understand student success and inform future policy decisions. Describing early results from Darden’s internal analysis on factors that are predictive of success in the first-year MBA curriculum, Clarke said, “Surprisingly, we found the verbal GMAT correlated more than the quant GMAT. The GPA correlated more than the GMAT. We found a correlation between SAT and ACT scores. And we found a correlation even with the interview. The interview was predictive of academic success… We are currently doing analytics for the first-year class to see how those people who opted to submit an alternative test or none at all are doing and that will help drive our policies.”

While it remains to be seen how other schools will address the GMAT/GRE requirement, the Wall Street Journal recently published an article describing a parallel decline in the role of standardized test scores in post-MBA recruiting. Historically, top consulting firms, McKinsey, Boston Consulting Group, and Bain, as well as reputable investment banks were thought to rely on the test scores as a filter for job applicants. This is changing. “I don’t mind one bit that campuses are waiving the GMAT requirement,” says Keith Bevans, a partner who leads recruiting at Bain, “Business schools are admitting a much broader range of talent, and I expect to find strong candidates this fall in places I wouldn’t normally see them.” He notes that while Bain still collects standardized test scores, they are not held against prospective employees, but rather incorporated into an internal analysis, which has found that higher scores do not always equate to higher productivity at Bain. Similarly, Danielle Bozarth, the lead partner for North America recruiting at McKinsey, also points out that MBA programs’ deprioritizing of test scores, “is aligned with our recruiting approach that [tests] are one of many ways to help assess a person’s skills or knowledge. We look for people who are good problem-solvers,” of which, she points out, there are many indicators.

While the role of standardized test scores is changing, prospective and current MBA students should carefully consider the entirety of their resume before determining whether to submit, or omit standardized test scores. We recommend thinking through the following questions:

• Are you a particularly strong, or weak, standardized test taker? Providing MBA programs and future employers with high scores on the GRE/GMAT will be beneficial even if they are considered a small component of your larger story.

• Do you feel that your GPA and academic credentials adequately reflect your capabilities as a student? If you have a weak GPA or other “soft” academic credentials on your resume, you may want to bolster these scores by taking the GMAT or GRE. This will give you the opportunity to showcase your ability to compete in a rigorous analytical and quantitative environment, and also prove your verbal competence.

• Does your resume include experiences that directly speak to your ability to critically assess complex situations under pressure and problem-solve? This could include success in case competitions, a role on the debate team, awarded scholarships or fellowships, and professional certifications, etc.

• Do you have any exceptional experiences that set you apart from other applicants by demonstrating a high level of skill, determination, and/or a commitment to success? For example: a role on a highly competitive sports team, a successful entrepreneurial venture, and/or documented professional success at a highly regarded company.

Student Loan Forgiveness Receives New Attention Under the Biden Administration

Debt is top of mind for graduate students. A Bloomberg Businessweek survey found that among 2018 graduates of prestigious MBA programs, almost half had borrowed at least $100,000 to finance the degree. The American Medical Association has long advocated for legislative action intended to ease the burden of debt on medical providers, and the American Bar Association released a report in 2020 detailing the negative impact of student debt on young lawyers’ mental health and calling for greater legislative advocacy on students’ behalf.

Late last week, when President Biden signed into law a covid relief package, he also removed a critical impediment to enacting broad-based student debt forgiveness. The bill contains a provision that allows any loan cancellation acquired between December 31, 2020 and January 1, 2026 to be excluded from taxable income. Previously, debt forgiveness (including Public Service Loan Forgiveness) was treated as additional income and taxed as such, with few exceptions. This update ensures that recipients of student debt relief are not left with large tax liabilities and are also not thrust into new tax brackets, with associated implications, due to debt cancellation.  

The counting of debt forgiveness dollars towards taxable income was a primary obstacle to broad student loan forgiveness programs. With the update now signed into law, Congressional Democrats led by Elizabeth Warren and Chuck Schumer, as well as 17 state attorneys general and consumer rights advocates are calling on President Biden to take executive action to cancel $50,000 in federal student debt per borrower. Despite this pressure, the President does not support loan forgiveness at this amount for every borrower, which he directly expressed in a CNN Town Hall last month, as it would aid people who attended elite schools or obtained professional graduate degrees and have strong repayment prospects. The Biden Administration has noted that cancelling student loans above $10,000 should be dependent on the type of loan and current income of the recipient. The President does, however, support $10,000 in blanket, federal student loan forgiveness, and he has urged Congress to legislate this action. Legislative action, he argues, will make it harder to undo. Meanwhile, he has ordered a Department of Justice review to clarify if he has the authority to cancel student loan debt via executive action. This review will be done with the White House Domestic Policy Cancel, who will also consider the best way to target loan cancellation.

While the loan forgiveness policies under consideration would not directly benefit borrowers with private or commercially held student loans, those borrowers could still benefit from the tax relief provision included in the covid relief bill. Marketwatch notes that it may help borrowers benefit from current loan relief options provided by public or private lenders as a response to the pandemic.

In an interview on student debt with the AMA, Alex Macielak, who works in student-loan refinancing, urged students to pay attention to the political discourse, “There’s a new administration. Student-loan debt is a hot topic, ... There’s been talk about forgiving loans for some people. However, how much, who would be eligible, and other important details are still in doubt. So, monitor the legislation and debate, because student loans are consistently evolving.”

Prospective MBAs, Particularly Women, Show More Interest in Flexible and Online MBA Programs

After a period of stagnation, MBA applications are on the rise. Not only do MBA programs tend to be counter-cyclical to economic growth, but, as The Economist notes, pivots made by MBA programs amidst the global pandemic have boosted their relevance. In addition to increased flexibility in the admissions process, schools have improved their online and flexible MBA offerings. Vijay Govindarajan of Dartmouth College’s Tuck School of Business, is quoted in The Economist article, explaining that rather than being “giant killers,” digital technology has allowed prestigious schools to “ensure their gold-plated MBA programmes shine even brighter.”

The CarringtonCrisp Consultancy confirmed these trends, finding increased interest in online and flexible MBA programs among prospective MBA applicants in their annual survey results. The results showed that 70 percent of respondents are more likely to apply to an MBA program now than they were a year ago. And, 46 percent are now seeking a form of flexible study. Over three-quarters, 78 percent, agreed that they are more likely to consider a school with flexible study options in its MBA program. Another 70 percent said that they are more likely to consider studying for all or most of their MBA online. 

When the CarringtonCrisp survey asked directly about respondents’ preferred method of study, just 15.5 percent selected “online,” falling behind the traditional two-year (28 percent), one-year (23 percent), and part-time (22 percent) programs. However, online study saw a significant year-over-year increase of 4 percentage points, while other methods held relatively steady or dropped. Additionally, a break-down by gender showed that women’s interest in online learning outpaced men’s; 19 percent of women selected online learning as their preferred method compared to 13.2 percent of men. Similarly, while over one-third of men said that they preferred the traditional two-year MBA program (34.7 percent), fewer than a quarter of women (21.5 percent) did, a smaller percentage than those who prefer full-time one-year (24.0 percent) or part-time (23.0 percent) programs.

The 2020 GMAC Application Trends Survey showed similarly large gains for flexible and online MBA programs. Globally, the survey showed large year-over-year increases in applications for the part-time self-paced MBA (53.0 percent), flexible MBA (48.6 percent), and online MBA (43.5 percent). And in the U.S., while 72 percent of full-time two-year MBA programs reported an increase in applications, 86 percent of online MBA programs reported growth in applications (up from 50 percent of programs in 2019 and 36 percent in 2018). Once again, the growth was driven by female candidates with 85 percent of online programs reporting an increase in female applicants, compared to 74 percent reporting increases in male applicants.

Business Schools Opting Out of Rankings Due to Pandemic

The Economist just published its latest MBA ranking, which Poets & Quants deemed, “the strangest list of the best business schools ever to be published.” European business schools IESE and HEC topped this year’s list, jumping up from their 2019 ranks of 10 and 3 respectively; however, 15 of the previously top 25 ranked schools declined to participate in this year’s ranking. In total, 49 out of the 165 schools invited to submit data either declined or were deemed ineligible and another 13 opted not to send the associated survey to their students or alumni. Among the 62 were some of the world’s most prestigious programs including Harvard, Stanford, Wharton, INSEAD, London Business School, CEIBS, Cornell, Dartmouth, and Duke.

The Economist’s resulting top ten, comprised of five U.S. and five European programs, included both expected and unexpected schools. The U.S. schools named in the top ten were Michigan Ross ranked third (up six spots from 2019), NYU Stern ranked fourth (+13), Georgia Tech Scheller ranked fifth (+18), University of Washington Foster ranked eighth (+12), and Carnegie Mellon Tepper ranked tenth (+22).  Most of the returning schools that opted into this year’s ranking saw significant positive momentum: 85 percent of schools that participated in 2019 and 2021 saw double-digit improvements in their rankings. Additionally, 41 of the top 50 (excluding two first-time participants) saw their rank increase by at least ten spots, and 24 of those improved by 20 spots or more.

The ranking, which was published despite GMAC’s request to the media to take a hiatus during the pandemic, comes during a tumultuous time for business schools worldwide. The logistical and economic effects of COVID-19 have impacted data typically included in ranking algorithms. Correspondingly, only 28 percent of business schools plan to participate in all MBA rankings this year according to Kaplan survey results published last week. The Kaplan survey, taken in October, asked admissions officers from 90 U.S. business schools, including 14 of the top 50 programs (ranked by U.S. News & World Report), about their plans to participate in rankings this academic year. While just 10 percent responded that they did not plan to participate in any MBA rankings, almost two-thirds (62 percent) said that they only planned to participate in some rankings.

Brian Carlidge, Vice President of Admissions at Kaplan, interpreted the results, saying that, “The majority of business schools have made their admissions processes more flexible, including making the GMAT or GRE optional, so many schools are lacking in test score data this year. Another major data point that goes into the rankings is job placement rate, and with the economy struggling as it is, it’s likely that it wasn’t as easy for Class of 2020 graduates to find employment as it was for Class of 2019 graduates. While many business schools are still reporting this data point for transparency, it’s also likely that others are reluctant to publicize it… With so much tumult, it’s hard to get a clear picture of where each business school lands. With so many top MBA programs not participating this year, it may make the rankings released in 2021 feel much less potent and relevant for aspiring business school students than in years past.”

Global Pandemic Spurs Demand for Graduate Management Education Worldwide

The Graduate Management Admissions Council (GMAC) just released its 2020 application trends survey report, The Global Demand for Graduate Management Education. The survey data, which was collected over an extended period to include pandemic-related effects, shows that while demand for business education is up, matriculation is slightly down.

The findings reflected the unusual nature of the 2020 application season during which many business schools introduced greater flexibility—the extension of deadlines and liberal deferral policies—into the admissions process. As such, schools, both international and domestic, reported that the 2020 admissions cycle brought an increase in the number of applications received, as well as acceptance rates, but also a corresponding increase in deferral rates and a decrease in yield when compared to the 2019 cycle.

In the US, over two-thirds of MBA programs (70 percent) reported an increase in application volume for the 2020 application period compared to the prior year (only one-third of programs reported increases in 2019). But despite increased application volumes, the median acceptance rate in 2020 was slightly higher than in 2019 (76 percent and 74 percent, respectively). And the median deferral rate—the result of schools’ more lenient policies as applicants grappled with obtaining visas, online schooling, and travel amid COVID-19—doubled from three percent in 2019 to six percent in 2020. Both Canadian and European MBA programs reported even higher median deferral rates of 11 percent, likely due to their higher numbers of international applicants, who were three times more likely to defer than their domestic counterparts (15 percent and 5 percent, respectively). Median yield rates in the US decreased by two percentage points between 2019 and 2020 (68 percent and 66 percent, respectively).

It remains to be seen how program acceptance rates for the upcoming cycle will be impacted as students who chose to defer their start to next year begin enrolling. It is important to note, however, that Harvard Business School just announced plans to matriculate the largest MBA cohorts in its history over the next two years (approximately 1,000 students each year). In a blog post announcing the plan, Chad Losee, Managing Director of MBA Admissions and Financial Aid, wrote, “In April, when we announced our one-time deferral policy for those admitted to the Class of 2022, we were already thinking ahead to those of you applying in the next two years. We did not want you to be disadvantaged by spots already reserved for those who deferred from the Class of 2022.”

Though other elite programs have not yet made similar announcements, they may follow suit in welcoming larger classes in the near-term.

MBA Programs Seek to Increase Flexibility in Admissions Process

Earlier this month, Georgia Tech’s Scheller College of Business and the University of Maryland’s Smith School of Business announced that their full-time MBA programs would go test-optional for the 2020-2021 admission cycle. These two are the latest among a growing group of schools to waive standardized test requirements for eligible applicants. Like Northeastern University’s D’Amore-McKim School of Business, Georgia Tech’s Scheller plans to pilot the test-optional policy for all Fall 2021 applicants. The University of Maryland’s Smith School of Business is implementing a test waiver program where applicants who meet an existing set of criteria can opt out of providing standardized test scores. UVA Darden, University of Wisconsin-Madison’s School of Business, and Rutgers Business School have incorporated similar criteria-based waiver systems.

The schools point out that while they have used standardized test scores previously, to gauge an applicant’s ability to compete in the academic rigor of their program, they say their admissions teams remain confident in their holistic assessment of an applicant’s potential. UVA Darden is asking candidates who do not provide test scores to include alternative evidence that they will be able to succeed academically.

The schools hope that the policy will attract more applicants. After announcing its test-optional policy, UVA Darden reported receiving “an influx of qualified applicants who had been furloughed or laid off amid the pandemic.” Speaking to the Wall Street Journal, Blair Sanford, Assistant Dean for Full-Time MBA and Master’s Programs at Wisconsin-Madison said, “Some of the reasons why we decided to expand the policy in the first place still exist. The pandemic is still in place… In addition, it gives us a broader reach to attract qualified students in a difficult environment.”

The schools are also optimistic that the policy change will appeal to a more diverse swath of applicants, particularly those from a range of socioeconomic backgrounds. The costs of taking the standardized tests, including preparation, can be a barrier to otherwise well-qualified applicants. Maryam Alavi, Dean at Georgia Tech’s Scheller College of Business, in an interview with Poets & Quants said, “Beyond the complications COVID-19 has introduced in terms of access to exams, an overreliance on standardized test scores in MBA admissions decisions puts underrepresented minorities, individuals from lower socioeconomic backgrounds, and first-generation college graduates at a disadvantage. We move forward confident that the change in this year’s admission process will attract our most diverse, qualified, and successful MBA cohort yet.”

According to the Wall Street Journal, however, many of the elite schools remain hesitant to move completely away from standardized testing, though most have begun accepting the results from online GRE and GMAT testing. And a few top-tier schools including NYU’s Stern, Columbia University’s Business School, and most recently, Vanderbilt University’s Owen, have opted to accept the Executive Assessment (EA) test as an alternative to the GMAT/GRE for full-time MBA applicants. The EA, which is much shorter at 40 questions and 90 minutes compared to the four-hour GRE or GMAT, generally requires less intensive preparation than its longer counterparts.

It will be interesting to see how things evolve from here, even among elite schools. Michael Robinson, Associate Director of MBA Admissions at Columbia Business School, has expressed interest in following the methods and outcomes of elite undergraduate institutions that have gone test-optional. At an MBA roundtable over the summer, Robinson said, “So, for us in admissions, it’s not that we want to basically admit people with the highest test average. It’s more about whether this person can succeed academically in that class. There are ways to get the right answer to that question without a GRE or GMAT or executive assessment. So I’m really curious to see what’s happening there. We’ll see what that looks like.”