Source: The Sunday Times
by Kiki Loizou
16 October 2011
Average earnings for last year’s MBA graduates was just under £60,000 (Paul Barton)
Though his eyes sting from tiredness, he makes a coffee and starts his other job — studying for a part-time executive MBA. His assignment will keep him up until 2am.
“I have three young daughters and this is an important time,” said Samuel, 40, of Kingston upon Thames, southwest London. “I’m missing a lot, but I’m doing this for my family.”
Samuel is not the only exhausted executive leading a double life for the dream of a brighter future. Britain’s universities enrolled 28,350 students on their MBA courses in 2009, according to the Higher Education Statistics Agency.
Almost 70% of those worked towards the degree while holding down a full-time job. Given that the top institutions expect students to put in 21 hours a week in classes and reading time, it’s a big commitment. And costly: Samuel is paying £42,000 out of his own pocket for his two-year course at Cass Business School in the City. Only 12% of students are funded by an employer.
As the country battles against the threat of a double-dip recession, an MBA offers hope of a career-defining pay rise, promotion or glamorous career switch. The latest intake are starting their courses now. Yet is the sacrifice involved worthwhile?
It seems that increasing numbers think so. “We have 37% more students on the part-time course this year than last,” said Professor Steve Thomas, executive MBA course director at Cass. “People are beginning to invest in their futures and their educations again.”
Globally, business schools are suffering mixed fortunes. More than two-thirds of the institutions offering traditional two-year full-time MBA programmes have seen a drop in overall admissions. There was a boom in applications after the financial crisis, as bankers used their redundancy cheques to go back to school. That demand has tailed off.
Applications for master’s in accounting or finance are up, however. In London’s top business schools, part-time MBAs are also enjoying a mini-boom.
The Cass course, ranked second in Britain, attracts students from Europe, America and the Middle East, who fly in for their weekend lessons.
“We don’t expect a full turnout every week,” said Thomas. “With executive MBAs you have to have a mature dialogue with your students.”
Not everyone plans thoroughly. Heather Thompson signed up almost on the spur of the moment. The 35-year-old was given the chance to take the course by her employer, the UK Border Agency. “I knew that once I had finished, I would be given opportunities to move up at the agency,” she said.
Before beginning the £39,500 course at Imperial College Business School, London, Thompson received a temporary promotion. On completing the course, entirely funded by her employer, her position as a senior executive officer became permanent. “I could have probably got the permanent job without the MBA but I think it made me more determined to do well,” said Thompson, of Crystal Palace, south London. A recent survey by the Graduate Management Admission Council (GMAC) claimed that a record 55% of part-time MBA students in Europe received job offers within a few months of finishing their courses. That was up from only 22% last year. Although the qualification is often thought of as the key to the executive floor, the salaries of MBA graduates are lower than many people think.
The average earned by last year’s graduates from British schools was a shade under £60,000, the Higher Education Statistics Agency said.
Jim Hey, 39, graduated from Warwick University with a distinction in January. The three-year, £25,000 course was paid for by his then employer, Ricardo, the engineering group. A positive appraisal prompted him to ask his boss for funding.
“There were things I felt I wasn’t being exposed to at work, things I needed to know that would make me think differently and enhance my skills,” he said.
Hey travelled to Warwick from his home near Oxford every two months to study for a week, leaving his wife and two children behind. “Over three years, that is quite a sacrifice,” he said.
Though Hey insists he did not plan to use the MBA for a career move, he is now in the fourth week of a new job with James Fisher, the marine engineering specialist. “You change shape when you go through the MBA process,” he said.
Hey believes the qualification helped to secure the job. “The knowledge I gained made me want new challenges,” he said. “I have more to offer.”
It is not, though, a guarantee of better things, according to James Callander, managing director of Freshminds Talent, an executive search firm. “There is an expectation in the market that MBAs get paid more and I think that is a 1980s perception,” he said. “On average, yes, they tend to get paid more than those with a similar skill level without an MBA, but you have to make sure it fits with your career plan.
“An MBA is not a licence to become a chief executive — business skills are honed over years of experience rather than a year or two of an MBA.”
Consulting Point, another recruiter, has 464 MBAs on its books. Neville James, the managing consultant, is all too familiar with questions about whether an MBA makes a difference. “The issue we have is that the students are told they are guaranteed a pay rise on completion. The fictitious number that they’re given is £20,000.”
Only 14% of the students who sign up for a part-time MBA do so with the intention of finding a new job, according to the GMAC survey. Longer-term career progression is often the aim.
Nicholas Graham, who recently began the Cass part-time MBA, said: “A lot of the students are just looking to escape their routine. They know the qualification will supply them with a platform to move forward within the company they already work for.”
Graham has just finished a master’s in digital brand advertising and has embarked on the MBA while preparing for a new job with Ebiquity, the data firm. At 34, he has a wife, a two-year-old son and a mortgage. “The average age of the part-time [students] is in the 30 to 35 bracket,” he said. “Most of them have families and houses to pay for. There is no way you can give up your job.”
Graham has been preparing for the financial strain since he decided to take an MBA eight years ago. “I’ve been saving for quite some time, but the gym membership still had to go and the redecorating is on hold.”
He is certain the sacrifices are worthwhile, saying: “I will learn things I can apply to any business model.” His classmates on MBA courses across the country will hope he’s right.
Pure grit got me through
Hilary Moore, 34, was five months pregnant when she started the part-time MBA at Cass in 2009, and there were times she feared she might not last the course.
“The only things that got me through were pure grit, endurance and blind stubbornness,” she said. “And exceptional time management skills.”
Moore admits her health suffered, mostly because she had to use her holiday allowance to complete course work. She began studying after joining Canning, a communication training consultancy in London.
Her thesis was handed in last month. She believes one benefit of the course was that she built a powerful network of business people who she never would have met otherwise.
