‘Great resignation’ adds to appeal of online MBAs
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For Amy Reeve, completing an online MBA was a transformative experience that resulted in a change of career and a 30 per cent uplift in salary.
She embarked on Warwick Business School’s Distance Learning MBA in 2018 while working in London as a business development manager for a US oil supermajor. But, a year after graduation, she switched employers and joined Flex, a Singaporean electronics manufacturer — staying in the same function and location but with greater responsibilities and higher pay.
“The MBA was one of the best things I’ve ever done, financially speaking,” says Reeve. “Meeting other participants who were pursuing a wide variety of careers opened my eyes to what else could be out there. The MBA gave me the confidence and knowledge to do something different.”
She is far from alone in that view. While Warwick’s degree is especially well regarded — it tops the FT’s latest ranking of online MBAs — alumni of other programmes report a similar broadening of their horizons, a benefit that may prove more valuable as the job market changes.
Traditionally, online MBA programmes have been pursued by people who want to accelerate a career in their current role or company, because they do not have to leave the workforce in order to study.
However, that is changing as more people make or consider a change as part of the “great resignation” — the wave of people quitting their jobs, creating a sharp increase in vacancies, amid the economic recovery from coronavirus disruption.
Career progress took a hit early on in the pandemic, as employers responded to the initial economic shock by cutting costs and suspending hiring and promotions. But opportunities are growing.
At Imperial College Business School, in London, 77 per cent of last year’s graduating class from the Global Online MBA changed their role and 47 per cent switched employers — up from 66 per cent and 35 per cent, respectively, in 2019.
Some participants are taking advantage of a tighter labour market to seek better jobs and higher pay, while others have been prompted by the pandemic to reassess their choice of career.
“Companies are back to pre-pandemic hiring levels,” says Lisa Umenyiora, executive director of careers and student life at Imperial. “Companies are aggressively trying to fill the gap in their leadership pipeline after people left their jobs in 2021.”
Schools say employers are increasingly willing to pay for staff to do an MBA, as a way to attract and retain their top talent, on condition that they stay with the organisation for a lock-up period, or reimburse the fees.
“There is the opportunity to use the hot job market to negotiate a better package, whether that’s hybrid working or further study,” says Courtney Wright, director, career accelerator and student engagement, at AGSM, the Australian Graduate School of Management in Sydney. “Organisations are more open to that.”
While full-time MBA fees are typically discounted through scholarships, a greater share of participants in online programmes receive funding from their employers because they can maintain or increase their output.
“Employers value the online MBA because employees continue their growth and trajectory in their company,” says Kelly Noble, senior associate director of career coaching at the University of North Carolina’s Kenan-Flagler Business School.
Online MBAs require a substantial investment of money and time, but many graduates report a strong return on their investment.
The average cost of online MBAs ranked by the Financial Times in 2022 is about $51,000 in tuition and fees, though without the opportunity cost of a full-time programme. Participants saw their salaries increase by 29 per cent on average in the three years after graduation, to $161,406.
Many institutions are also ramping up the support they give to remote students who are seeking to accelerate or change their careers.
Traditionally, online participants have had limited access to schools’ careers services, reflecting the fact that they are already employed. But Tommaso Agasisti, associate dean for internationalisation, quality and services at Italy’s Politecnico di Milano School of Management, says: “We are seeing a convergence between the opportunities available online and on-campus.”
While schools are now increasing the supply of online MBAs, sustaining demand for them will require greater acceptance by employers, according to the Graduate Management Admission Council.
Currently, only a third of companies say they value alumni of online and in-person programmes equally, according to GMAC’s 2021 Corporate Recruiters Survey. And two in three MBA candidates disagree that career opportunities gained through on-campus and virtual degrees are the same.
This may reflect an older stigma. For-profit colleges have traditionally dominated the online learning market, but poorer oversight and accountability often led to lower standards at these institutions, according to the Brookings Institution, a US research group.
Philip Griego, programme director of the online MBA at USC Marshall School of Business in Southern California, insists the distinction has been reduced in recent years, because more top schools have launched online MBAs, underscoring the importance of a strong brand in digital education.
“It’s not the mode of delivery that counts; it’s the curriculum and who is teaching it,” he says.
The pandemic may have changed attitudes towards the perceived value of online learning, too, according to FutureLearn, an online education provider. In a survey, it found three-quarters of recruiters were more likely to hire applicants with online education last year than they were before 2020.
For employers, the switch to remote or hybrid work has potentially strengthened the relevance of the online MBA qualification. “It gives you exposure to the tools and technology changing the way we work today,” says Keith Bevans, global head of consultant recruiting for Bain & Company, a consultancy.
He is indifferent towards the delivery format. “We don’t distinguish candidates based on the type of MBA programme they are in; we distinguish based on their academic experience.”