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By Harshita Mehrotra

Why Do Recruiters Hire MBA Graduates? & What Do They Want From The MBA Degree?

8th December, 2020

‘Why do recruiters hire MBA Graduates’ a very prominent question in the mind of graduates and aspirants, can be answered by looking into what and how B schools are teaching students the right skills and business acumen. The MBA degree originated after the rising demand for scientific management by the industries after the rapid industrialization in the late 20th century.

A few schools in collaboration with industries took up the task of designing a curriculum in order to provide the companies with individuals proficient in scientific management. So read on to know why do recruiters hire MBA graduates and what you need to know to ace an MBA campus placement interview.

The MBA Degree & Its Importance

An MBA not only equips students with managerial skills but also provides students with other necessary skills needed in the company. Thus, MBA functions as a professional degree, preparing students for advanced careers in virtually every field. The MBA also serves as a terminal degree where it is the highest academic qualification one can have in business are just a few of the Benefits of the MBA degree.

A survey in 2014 by the graduate management admission council (GMAC) shows how recruiters are increasingly preferring MBA graduates to hire; on the other hand, it shows the percentage of bachelor’s getting engaged by these companies on a slow decline. Lack of essential employability skills in the bachelor’s degree holders is the primary reason why do recruiters hire MBA graduates.

Source

An MBA program typically lasts for about two years (approximately 18 months of term time). There might be some variations depending upon the mode the applicant chooses. Different business schools offer different variations such as full-time MBA, part-time MBA( which can last about three years or more), or executive program (where applicants can pursue the MBA while doing their regular jobs). Other variations, such as a distance learning program and a mini-MBA program, are a small training regiment used by some companies for its employees.

Value of An MBA

In this section, an overview will be presented, which will help answer questions such as why MBA, why do recruiters hire MBA graduates, benefits of MBA, the scope of MBA, the importance of MBA, and careers after MBA.

MBA Curriculum

The program’s curriculum is structured just like any other academic program; it involves core courses, required business courses, and electives, which count towards the specialization the students seek from the MBA. 

During the first year of the program, students are familiarized with the basic concepts of business. These core courses include concepts of management marketing, strategy, and finance. Applicants are expected to have basic knowledge of statistics and accounting.

The first two terms also focus on teaching analytical skills for which an MBA graduate is valued for topics on business ethics are also generally covered during the first year of the program.

The accounting course(s) might treat finance and management accounting as several courses or one hybrid course. Financial accounting bestows mainly in preparing monetary statements, whereas management accounting deals primarily in analyzing a company’s finance and accounts.

The economic science course covers social control economics, a technical approach that focuses on product rating influenced by political-economic theory. Research and statistics area units are typically combined as “Managerial Decision-Making” or “Quantitative Decision-Making”; organizational behaviour and human resource management may similarly be combined.

In several programs, candidates with the applicable background are also exempt from varied analytical courses.


The second-year (third and fourth term) focuses on elective courses that the students opt for based on the specialization they seek. These specializations include (but are not limited to) entrepreneurship, international business, finance, operations, IT industry, marketing, and fast-moving consumer goods (FMCG).

Professional Training

Simply put, professional training teaches skills required in a particular profession or industry. Being a professional course, MBA bestows the full set of professional skills necessary for the students to succeed in business. The number one skill that an MBA teaches you is leadership.

Leadership is not just one skill but a set of skills or qualities an individual needs to be a leader. These include confidence, self-discipline, time management, and other soft skills, which would be discussed later in the article. Other professional skills developed in the MBA are risk management, ethical decision-making, strategic analysis, and research.

Case Study Approach

The MBA coursework focuses on theory and practice alike. What is taught by professors in class is taught again through case studies. Case studies are an in-depth analysis of a particular person, community, group, or event intended to relate theoretical concepts to real-world problems. Case studies are also designed to invoke different quantitative and qualitative skills needed for an MBA graduate. One of the significant benefits is that case studies allow MBA graduates to look at problems differently from average non-business graduates.

One of the interesting case studies that help us understand the buyers’ side reasoning in India’s rural market is chick shampoo from Cavinkare. There are several decisions that the company made that made it the largest player in the shampoo market. Most of the Indian population resides in rural areas and live below the poverty line.

The company launched its product in affordable packing suitable for the rural buyers who don’t spend INR 20-40 (around 1990) in one go. Besides, they launched a scheme that enabled the buyers to return four used shampoo sachets for a new one. They quickly became the largest shampoo company in the south Indian market and destroyed the competition.

At that time, companies used to promote the product by labelling it as ‘elite,’ however, Cavinkare took the opposite approach and understood the customer base, which paved the path towards their success. This is just a gist of this particular case study, hopefully making the reader understand how case studies work.

Studying different case studies enables MBA graduates to look beyond the norms that exist in the current ecosystem.

In-depth Knowledge

Although the MBA is mostly known as a professional degree, it also serves as a terminal degree where courses are designed to give students in-depth knowledge of the subjects. Most of the core courses are divided into two parts, where the first part provides an introduction to the topic and the second part deals with an in-depth analysis of the subject. This gives students enough time and room to grasp the concepts. Also, these learnings are reinforced by several group projects the student has to take up.

Broad Education

MBA provides a considerable variety of specializations considering the diversity of students opting for the MBA. This makes the students graduating from MBA proficient in a broad spectrum of fields. These fields include general management, operations management, international business, strategic management, finance, consulting, marketing, entrepreneurship, IT management, and human resources. The student can choose one or more of these specializations based on their skills, field of work, and future goals. Students can even be allowed to skip some electives given their history with the specific domain, making the degree more efficient.

Career Acceleration or Switching Careers

Companies greatly value the MBA as a degree. And the reason is pretty apparent. MBA graduates have the technical skills required for business management. They have the analytical skills needed for the business’s growth and have strong leadership and soft skills necessary to strengthen the organization from within and maintain the change. Scope of MBA extends beyond the field of the graduate. According to a survey done by the Graduate Management Admissions Council (GMAC), 64% of graduates in 2012 used the degree to change their careers.

The starting packages of MBA graduates is higher in companies as compared to graduates of other degrees. This also indicates why individuals emphasize the MBA for career growth. Thus, an MBA allows graduates to move to higher positions in their field or change their work field as they see fit. Your career after MBA will receive a huge boost in job security and the number of packages. 

The Average Salaries of an MBA Graduate in Various Roles

Career options

Career after MBA becomes uncomplicated. As discussed above, companies value the skills of MBA grads and are willing to take up individuals at higher posts. Individuals can pursue higher up positions in the field they are currently in, i.e., they can move up to their managerial or leadership levels. There are plenty of examples where MBA graduates from humble backgrounds become CEOs in giant global corporations or companies. MBA can also help people change the field they are currently in. This can be due to a variety of reasons, such as lack of interest or slow growth. 

An MBA can also help individuals start their venture equipped with the necessary skills to establish a business. Many individuals opt for start-ups as venture capitalists, and angel investors tend to give funding to individuals with prior experience in the field of business.

Why Do Recruiters Hire MBA Graduates?

One of the logical questions to ask is why MBA graduate hiring percentages are so high. To answer this question, we will have to understand what the recruiters seek in the applicants, why other graduates fail to meet the criteria, and how do MBA graduates fulfil those criteria.

In an interview, recruiters look for employability skills or soft skills of the applicant. They look at the reliability of the potential recruit through their previous academic performance and workplace experience.

Most of the graduate degrees fail in both aspects. An average non-business graduate doesn’t possess the necessary employability skills. This happens due to a lack of focus on personal development in basic degrees. Most of the emphasis in a bachelors’ degree is on imparting theoretical knowledge to the students with virtually no stress on the practical aspects.

The design of the course is also heavily solitary requiring close to none interaction with peers. We will talk about the second aspect when discussing the benefits of an MBA to an employer.

The reason that companies hire MBA graduates and the benefits of an MBA to an employer is that they fulfil the criteria recruiters are looking for in many ways.

Let us first discuss the academic performance and workplace/professional experience. An MBA program is rigorous. Only people with mental fortitude, discipline, and commitment can complete an MBA degree. Compared to an MBA, most of the bachelor’s degrees are a walk in a park.

Secondly, besides the year-end internships that MBA students opt for, practical learning or field immersion involves students working on management consultancy projects in teams (or in MBA terminology ‘syndicates’) for real clients. We can see the value of MBA for employer compared to other bachelor degrees.

Thirdly, different strategies used by teachers such as case studies, individual or group projects, field immersion inculcate essential employability or soft skills in the students, which are most often than not absent in average non-business graduates. Thus, we can see the benefits of an MBA to an employer and the importance of getting hired.

Value Additionals of An MBA Degree To An Employer

There are other benefits of an MBA for which the companies value it. These points also help us answer the question of why MBA?

Inculcation of Critical Thinking

An MBA, through its course structure, naturally teaches critical thinking in the students. The emphasis on practical knowledge forces students to use their creative part of the mind to find the solutions to the problems. Case studies, which are an integral part of every MBA program, also help develop critical skills in the students by compelling them to look at issues from different viewpoints in order to come up with the solutions. The rigorous course content also impels them to develop creative solutions to complete or excel in academics.

Increases Business Leadership

Students’ leadership skills during the MBA program by working in syndicates and by workplace experience are of great value. Companies hire MBA graduates as they can use their leadership skills in different aspects. These aspects include (but are not limited to) 

  1. Good leadership directly leads to project growth: Good decision making, crisis management, increased cooperation, and motivation among the workforce are some factors that directly aid the project.
  2. High work quality: A good leader inspires individuals to work better, increases their team spirit, maintains a good relationship with their employees, and is empathetic towards their needs; all these directly lead to the rise in work quality.
  3. The company’s increased reputation: A good leader maintains good relationships within the organization and outside. Ethical decision-making and corporate social responsibility directly impact the companies reputation in the global market, media, and social circles. They can also maintain excellent relationships with other businesses and service providers of value to the company, thus directly increasing the profits.
  4. New ideas: A hidden advantage of skills that make a leader is that it allows individuals to have a unique perspective. This directly translates into the creation of new ideas for new ventures or projects. Thereby further increasing companies reach and profits.

Enhances Technical & Qualitative Skills

 

The importance of MBA doesn’t lie in soft skills such as leadership; they are also known for their impeccable technical and qualitative skills. The rigorous academic regime they go through equips the MBA graduate with adequate technical and qualitative skills. These technical skills include understanding the business, strategic decision making, proficient understanding of finance and accounting, technical writing, in-depth knowledge of the global market, and variations. All these skills help the company to gain profits in different ventures and projects organically.

Technical skills are necessary for companies’ growth and smooth internal workflow, effective communication between departments or with different business partners, and trouble-free interaction with laws and governance. All of this is due to a great understanding of the market, economics, financial statements, companies’ organizational structure, and excellent technical document drafting.

Managerial skills & Analytical skill

Managerial skills are second nature to MBA graduates. Organizational skills are incomprehensible without analytical skills. A good manager has to have good analytical skills, but good analytical skills might not mean good managerial skills. This follows from the fact that analytical skills are essential to managing people or resources; without the ability to draw conclusions based on the information given (which is usually incomplete in this field), a person cannot manage even his own time and resources. These skills also help in understanding the importance of an organization-wide approach to a particular project or venture.

Understanding The Business Environment

After going through professional training and working in syndicates for real clients, an MBA graduate develops a deep understanding of the business ecosystem. These skills build strategic thinking in the individual and lead to a broader mindset. This directly helps them choose the right projects and ventures as due to their expansive vision, they are able to see things that people usually would not see. They can also manoeuvre projects in the right direction due to this, gaining profits in otherwise losing projects.

Better Communication, Interpersonal Skills & Networking

We have already discussed soft skills under the benefits of an MBA. An MBA graduate has a good network also. Continuous interaction with college peers, faculty, workplace peers and real-world clients helps create a colossal networking grid. This is one of the importance of an MBA as this highly skilled networking grid helps build the business organically. And this continuous interaction with like-minded individuals allows MBA graduates to create influential and persuasion skills.

Grasp On Team Working

Working in teams is not an easy task for anyone; there are differences in opinions, work style, commitment, and even ethics. But the experience of working in a team helps MBA graduates to understand the team dynamics. Thus MBA graduates can work in teams seamlessly, effortlessly managing differences in opinions and workstyle. In turn, this helps in optimal time management, which is a necessary asset in businesses.

Conclusion

After reading this article, the reader can answer some frequently asked questions about MBA such as: Why MBA, benefits of MBA, the value of MBA, the importance of MBA, the scope of MBA, career after MBA, and many more questions one can have about this degree.

Let us summarize the contents of the article in a compact way. MBA is a professional and a terminal degree that focuses on theoretical and practical concepts alike. Case studies, individual/group projects, and real clients are business schools’ tools to teach technical and soft skills.

These managerial skills, interpersonal skills, analytical skills, and technical skills are greatly valued by the companies, which is apparent in the percentage and starting packages of placements.

The rigorous academics and working in syndicates helps students learn how to deal with pressure and manage time efficiently. All these tools also change the perception of MBA grads, making them see things that an average person can’t.

This creative perception allows graduates to find innovative solutions to the problems and come up with new ideas about marketing and strategy, another benefit of an MBA degree. Career after MBA becomes trouble-free as the scope of MBA extends far more than any other professional degree. A survey done by GMAC in 2017 shows that about 9 in 10 companies hire MBA graduates. We can see that the value of MBA for employers is high even in economic and political uncertainty.

Lastly, the MBA was designed with the help of industries to provide competent individuals to companies or the business world, and it has been successful in doing the same. It allows individuals to move up to their company’s managerial positions and leadership positions, which is impossible for an average graduate degree holder. Climbing the ladder to success starts at the time a student chooses to do the MBA. 

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By Harshita Mehrotra

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