By Peter Walker for CNN
Adjust font size:
(CNN) -- The market is booming for MBAs, according to a new survey -- so much so that the one factor that might rein in the market is employers' worries about arrogant would-be executives demanding sky-high starting salaries.
But overall, the numbers are very cheering for anyone leaving business school this year.
The TopMBA.com International MBA Recruitment and Salary Report 2006, which surveyed 445 companies in 33 different countries, says it gives the most global perspective on the MBA market.
Of the respondents, 28% were based in Europe, 38% in the North America, 13% in Latin America, 11% in the Asia Pacific, 6% in Eastern Europe and 4% in the Middle East and Africa.
According to the findings, the call for new MBAs among recruiters worldwide will set records in 2006, with an overall 24% increase in demand, rising to 38% in the consulting sector.
During this year, average MBA salaries have increased by 7.5%, according to the survey, 5% more than the average inflation rate in the main industrialized nations.
Salaries for new MBAs are also now above levels seen before the downturn in 2001, with those taking jobs in North America or Western Europe beginning with an average salary of $90,500.
"This increase reflects a high level of optimism amongst MBA recruiters and increased competition for the top talent." the report's authors, QS Research, said.
Risk of overheating?
Among the employers surveyed, 35% of employers expect to increase MBA hiring in the next 12 months against just 3% who anticipate a decrease.
However, the report warns that this might slow down during 2007 as the market overheats, with some respondents fearing "that the huge growth in demand over the last two years cannot be sustained, not least because the supply of MBAs is not growing as rapidly and companies may not be willing to push salaries much higher."
Also, the authors say, there is a fear of a return to "the bad old days," when new MBAs had a reputation for arrogance.
"MBAs coming out right now are beginning to have a sense of entitlement once again," Tiffany Wogelwede from appliance manufacturer Whirlpool told the report's authors.
"The ego is sometimes getting in the way of the hiring process."
But for now, it is a job-seekers' market, with business school career services "delightedly reporting their best year on record," according to the report.
"By April 2006, over 90% of our class had at least one full time offer. We expect all the class to have offers by graduation," Kim Keating of Tuck Business School in the United States told the authors.
Outside of the traditional MBA hotbeds of North America and Western Europe, MBA salaries are gradually catching up in developing markets -- while there is still a 30% salary gap between the highest and lowest paid regions, this gap is narrowing each year.
And although the United States long paid the highest salaries, this crown has now been taken by Western Europe, although this is partly due to the weak dollar increasing the value of European salaries when denominated in the US currency.
Other MBAs, meanwhile, are playing a longer game and turning their attentions to Asia.
"More and more MBAs are joining Chinese companies from international MBA programs and Asian MBA business schools," Michael Yang, general marketing manager of Motorola (China) told the authors.
"I think the attraction for these MBAs is not the starting salary, but the growing opportunity. For example, the average MBA salary growth rate is higher than 15% per year here in China."
In the money: new MBAs are enjoying high starting salaries.
FACT BOXFT's Executive MBA Rankings
1. Wharton, U.S.
2. Hong Kong UST, China
3. London Business School, UK
4. Instituto de Empresa, Spain
5. Fuqua, Duke, U.S.
6. Chicago GSB, U.S.
7. Columbia, U.S.
8. Kellogg, U.S.
9. Stern, NY, U.S.
10. Cass, City University, UK
Source: Financial Times 2006
FACT BOXEMBA SNAPSHOT
Executives taking the top EMBA courses in the U.S., Europe and Asia have average salaries of around $130,000 to $200,000.
A typical EMBA student is likely to be aged in the early 30s, with 6-10 years of working experience.
A top EMBA course can cost $100,000. Customized courses start at a few thousand dollars.