Demand for shorter MBAs has grown to improve return on investment
Since prospective students prefer fast-track courses that concentrate on career development and pay less for their degree, MBA courses are changing to meet varying demands.
The robust economy has strengthened the appeal of shorter MBA degrees, which provide a quick return on investment and allow students to make up for lost income. Fast-track programs are in great demand, according to the Graduate Management Admission Council, with 47% of prospective students enthusiastic about them, the strongest demand in a decade.
Associate dean Sara Moeller, Katz Graduate School of Business, finds that the popularity of one-year MBAs is students’ changing circumstances in which they want to upgrade their credentials in the short term. “Students who enroll in full-time programs take a break from professional positions, foregoing pay and benefits. They are driven to complete their graduate studies quickly in order to return to their successful careers.”
Since Katz began fast-track programs in 1963, the first school to offer a one-year option, it has run continuously. On the other hand, to meet students’ demand for more comprehensive learning and summer internship programs, last year, the Pittsburgh-based school launched an 18-month option.
Moeller says that the school now sees more demand for an 18-month program. For students who want to complete their degree in less than two years and prefer to have the summer internship experience, in fall 2021, Katz replaced the long-standing format of the two-year MBA with an 18-month Signature MBA.
Fast-track MBAs are evolving despite the limits
In the US, two-year courses are considered a better option to change careers since it includes the summer internship, which is the traditional way to experience a new profession and to land coveted roles in banking and consulting. In this circumstance, for career-changers, fast-track format options are limited.
However, in 1965, the one-year MBA program was launched at Kellogg School of Management in Illinois. In the belief that the MBA is not one-size-fits-all, it offers a shorter format that is designed to let students focus on their priorities, leveraging their prior academic knowledge and directly undertaking electives. For instance, students with undergraduate business degrees can move directly into their preferred electives rather than attending compulsory core courses.
“One-year MBA students typically have strong clarity in their career goals and are using the MBA for career enhancement and acceleration rather than for a major career shift,” says Steve Thompson, senior director of full-time admissions at Kellogg. Therefore, the courses are structured to recruit students who have a focused career goal.
“You have the intimacy associated with a small program but benefit from the network and resources of a larger one,” Thompson says. Students in Kellogg’s 12-month course can still build a social network with those who are attending the two-year program. For instance, Kellogg Worldwide Exploration Student Trips – overseas study trips were taken before the MBA officially began – allow them to interact with the two-year cohort.
Are fast-track courses a more economical choice?
“When the return on investment components are considered, along with the fact that one-year MBAs are recruited for the same jobs and salaries as two-year MBAs, the shorter program is a very attractive option for those with fitting backgrounds,” says Brian Mitchell, associate dean of full-time MBAs at Goizueta Business School in Atlanta, Georgia. With shorter MAB degrees, students can lower tuition costs.
“Understanding the fit is an important part of our evaluation process, and it should be an important part of the candidate’s approach as well,” says Mitchell. For example, the one-year course option would be a perfect fit for candidates who have previous work experience and thus see a summer internship experience as less important. Mitchell adds, “We look for students who are seeking to accelerate their trajectory in roles that leverage their previous experience in addition to what they learn throughout the MBA program.”
“The MBA degree in the US started in the two-year format, and the vast majority of business schools have remained with that model because of its history and success,” Mitchell points out the fact that in the US fast-track courses are still rare and that summer internships in a traditional two-year format yet have a high demand for career changers.
Mitchell also adds that one-year program options are not yet well known to prospective students. “Even when learning about such programs, some prospective students may believe incorrectly that one-year programs do not offer the full MBA experience. At Goizueta, we have worked hard to ensure that’s not the case.”
Whereas the industry experts have predicted that it will become more challenging for business schools to recruit applicants for a traditional format due to the competitive labor market, Mitchell remains positive about their two-year course, saying “high-quality MBA programs are going to remain attractive, regardless of the strength of the job market.
Mitchell points out that while application numbers fluctuate, the MBA degree’s overall appeal stays constant, as it is one of the most sought-after graduate degrees worldwide. He adds “We have seen this through a number of economic cycles, for as long as MBA programs have been around”.
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