Demand for places at business school has rebounded, as prospective students flee a labour market battered by the coronavirus.
Data gathered by the Financial Times from 13 of the top 20 schools on its ranking list found that all had attracted more applications for the MBA classes starting later this year than for the same period in 2019.
The jump in MBA applications also ended four years of declining appetite among the top business schools that responded in the US, by far the largest MBA market.
Insead has had the biggest jump this year among the global top 10 on the FT rankings, with a 57 per cent rise in applications on 2019 levels for the coming academic year. Iese Business School reported a 12 per cent rise year on year and a record number of applications for the Barcelona-based institution.
Other schools at the top of the FT list have also recovered with double-digit percentage increases in application, helped by a jump since lockdowns were introduced in March. These include MIT Sloan School of Management, whose applications were up 12 per cent year-on-year.
The surge in applications coincided with the pandemic and the worsening economic news, according to Rod Garcia, assistant dean in MIT Sloan’s admissions office, adding that this is likely to continue as unemployment rises. “Although I can’t know for sure what will happen next year, I would expect the trend of increased applications to continue,” he said.
While the strong economy was a factor for declining applications in the US, schools have also complained that restrictions on student work visas have discouraged overseas applicants, which has dragged down overall demand.
However, there is concern that students who have been offered places will not turn up at the start of term when at least some classes are likely to be taught online because of coronavirus restrictions.
The worsening outlook for jobs is seen as a factor behind the renewed enthusiasm for the MBA, a management qualification tied to career advancement for senior executives.
Demand for MBA courses tends to be countercyclical because when the economy is strong the temptation for potential applicants is to seek promotion from their current roles.
When recession looms, as is now the case, the opportunity cost of taking a career break to update skills and build a professional network at business school reduces greatly. The jobless rate in the US stood at 13.3 per cent in May after employers cut 20.7m jobs during April and 1.4m in March.
“We had many years of uninterrupted growth but the economic summer is over and it’s time to go back to school,” said Lawrence Linker, chief executive of MBA Link, an admissions consultancy. “It’s an age-old pattern. People have always sought to educate themselves when faced with new challenges.”
Administrators and experts remain concerned that the anti-immigrant rhetoric from Donald Trump will hamper the recovery in the MBA market in the US.
A 29-year-old banker in Mongolia, who asked not to be named, said she plans to apply to London Business School as well as other institutions closer to home in the hope that she can accelerate her career.
“Last year, I was determined to apply for US programmes and US only. But given the current situation in US, the anti-Asian sentiment and the numbers of the cases, I’m no longer a big fan,” she said. “Instead, I’ve become more interested in MBAs in UK and Singapore.”
Declining demand in the US has convinced several US schools to pull out of the MBA market or drop their full-time courses in favour of more flexible online tuition, a growing sector.
Last week Purdue University in Indiana announced the closure of its residential two-year MBA to new applicants — although its online MBA will continue — after a 70 per cent drop in demand since 2009.
“We now spend considerably more to recruit a class than we generate in tuition revenue from that class,” David Hummels, dean of Purdue’s Krannert School of Management, wrote in a letter to students and alumni. “That is simply not sustainable, particularly in light of significant financial adjustments that are necessary in the wake of the Covid pandemic.”