Why US MBA programs still dominate despite H1B?

It is that time of the year when click bait articles try to induce fear in the minds of MBA Applicants about the decline of MBA and the infeasibility of post-MBA jobs in the US due to visa rule changes and change in global demand. The fear mongering is furthest from the truth. In fact, the most consistent demand for our consulting and editing services has been for top MBA programs in the US (Harvard, Stanford, MIT, Wharton, Columbia, Kellogg, Booth and Stern).

Rarely does Canadian Schools – despite the supportive visa rules trump US schools when it comes to demand or interest. And for many valid reasons.

1) Distribution of Business Schools

If you choose the top 100 MBA programs in the world 55 to 70% of them are distributed in the US with a rising number of world-class schools emerging from China. The UK is the only other country that is considered the second option for most competent applicants. Naturally, International applicants have little choice but to target top MBA programs in the US.

Example: In FT Global MBA ranking (2018), 60 out of top 100 top MBA programs in the world are in the US. For The Economist (2017), the number is 52 out 100.

2) Curriculum

As someone who has written Comprehensive MBA Research Guide (Top MBA programs in the World) and Ultimate Guide (Top MBA in the US), I had to scavenge through the curriculum pages of 100s of MBA programs. The attitude towards curriculum updates has been consistent. US Schools customize their curriculum regularly to remain competitive while European schools stick to safe options. There are a select few top schools in Europe. Due to their monopolistic position, there are limited incentives to customize the curriculum and bring change that reflects the market demands. On the contrary, in the US, apart from Harvard and Stanford, most top MBA programs know that their position in the minds of applicants is not permanent. This interesting market dynamics puts candidates graduating from the US at a clear advantage over those graduating from Europe as the skill enhancement is at a different scale in the two regions.

3) 1-Year vs 2-Year

The low threshold for risk-taking cannot be blamed entirely on European school’s lack of imagination. They are restricted from the limited timeframe for their course. 1-year is rarely an opportunity for rapid skill upgrade for a career switcher. The only exception we have seen is at INSEAD where the emphasis is on learning on the ground. A closer look at the class profile of top European Schools including INSEAD indicates an affinity to accept experienced candidates (5-7 years). Since the biggest ranking factor is the increase in salary, European Schools cannot compete with the US without tweaking the experience part. Naturally, someone who has 5-7 years of experience would have 2-4 job experiences under their belt, giving them enough bargaining power for their post-MBA offers. But you have to understand that despite experienced candidates in their cohort, most top European schools cannot topple the less experienced classes of US MBA programs. There lies the contrast in quality of the class.

4) Economy

MBA programs are a pathway to $125,000+ base-salary jobs. The motivation could be masked with short-term and long-term goals, but those applying to top MBA programs in the US knows the numbers. They also know that the jump even adjusted for currency variation and Price Parity is 50% to 150% higher than what they were earning before. Unfortunately, Canada, Europe, UK, and Australia have fewer jobs with the same earning potential. With a rigid hierarchy and loyalty valued over talent, many of these MBA job markets prefer company insiders over freshly minted MBAs traversing the mid-level position.

MBA Job Market Growth and Size

Only China has something similar to offer to the US, but since Cantonese and Mandarin are must-have language skills in the mainland, United States holds a unique advantage in language and the diversity and size of their economy.

5) Master’s Preference

Although GMAC surveys are not the perfect representation of the hiring practices of Global Employers, they offer a bird’s eye view of how each region values a Master’s degree.

Master's Preference - US, Europe, Latin America and Asia

Asia and the US value MBA, and Master of Data analytics whereas Europe with the concentration of Global banks has a preference for Master of Finance and Master of Accounting. MBA is the least favorable degree in the region. This puts tremendous pressure on tier-2 MBA programs in the region. Only top brands (INSEAD, LBS, SDA Bocconi, IESE, IE, and HEC Paris) survive the perception war and lack of high paying post-MBA jobs in the region. Since the Global Economy is primarily driven by the US, China, India, Japan, and Germany with MBA job markets concentrated in the first three, the application preference has a high correlation with the state of the economy and the degree each region prefers.

6) H1B Visa and Asian Growth Story

The target of the Trump’s Buy American and Hire American Executive Order is against Indian IT professionals as 50.5% of the total H-1B visas has been granted to Indians from 2001 to 2015  - the largest share, much ahead of Chinese workers (9.7%). But since Technology has now become the second largest Employing sector in most top MBA programs, the worry that the policy would affect international MBA graduates is genuine. 

The proposal to increase the starting salary to $130,000 from $60,000 for H1B visa holders would discourage mediocre skilled Indian IT professionals from applying, giving the position to deserving MBA graduates. Another statistic that should encourage applicants is the % increase in seats in top MBA programs. Since the increase has been marginal over the past five years and the % of international students has decreased from 40% to 35%, the odds are not stacked against international applicants. Having said that, the idea to increase the H1B starting salary is still in the initial ideation phase. For the next 1-2 years, expect qualified international candidates (bottom 20 percentile), even from tier-1 program to return to their hometown. But even for these scenarios, the compensation in Asia is higher than the offers in North America for top MBA programs (adjusted for Purchasing Power). 

Top MBA Media Salary Asia US and International

Applicants from Europe, and Latin America should target local schools as the compensation at their respective regions were $30,000 to $40,000 behind the class median even for top MBA programs.

Tier-2 US Schools have lost their luster as they find it harder to find Employers who can Sponsor talented International candidates.

The competition is intense to get into top MBA programs in the US. But don’t worry. We have helped applicants get into Top 10 US Business Schools by meticulously planning their application from resume to essays to social media to communication strategy.

Start initial consulting here or your can subscribe to our Comprehensive Essay Review Services.


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GMAC Corporate Recruiter Survey 2018
MBA Research Guide (Top MBA Programs in the World)
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H1B Visa Trends (Pew Research)

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New Visa Rules: Post-Brexit

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