Why Business Schools are looking for less experienced MBA candidates?

Recently, business schools such as Carnegie Mellon, Harvard and Stanford started to reduce their work experience admissions requirements. One of the most renowned examples of this trend is Harvard Business School’s 2+2 program for college juniors.

While it seems that the main reason for the change is increased competition for the students and business school’s desire to increase their application pools, HBS argues that the main goal is to attract applicants who would not enroll to the business school otherwise. According to an interview with Deirdre “Dee” Leopold, HBS Dean of Admissions, published on the Poets & Quant’s website, the program is meant to attract people to business school at a time when they are making other decisions — thinking about law, medicine or engineering, for example.

There are two main advantages of going to business school without significant working experience.

First, students enrolling to MBA programs shortly after college will have an opportunity to graduate younger and potentially improve their ROI.

Secondly, younger students with stronger stamina could be more attractive for specific categories of employment such as investment banking. Younger students could also be more attractive for the employers who are trying to attract MBA students with lower expectations for post MBA salaries.

While these considerations could be relevant in some situations, there are several significant advantages of having meaningful work experience prior to MBA.

Advantages for the applicants

1) Students with significant pre-MBA work experience have a better idea about what they want to do post MBA career-wise and have fewer chances for mistakes in their career choices.

2) They will be better positioned from a recruiting point of view, as the majority of employers still prefer to hire more experienced MBA students.

3) They will be able to apply to more business schools, as majority of MBA programs require several years of work experience as a mandatory condition.

4) They will benefit more from their classes and will be much more focused in what they want to get out of the MBA program.

5) They will find it easier to socialize with the majority of their older and more experienced classmates.

Advantages for the business schools

1) Students with more significant work experience will contribute to their classmates learning experience in more meaningful way.

2) Lower employability and lower post MBA salaries of students without work experience can reduce business school’s ranking.

3) According to GMAC research “Quantity or Quality? Work Experience as a Predictor of MBA Student Success” from 2009, the quality and quantity of previous work experience are significant factors for students’ success in MBA programs.

4) According to the research, the quality and quantity of individuals’ work experience were the only significant predictors of student performance in the summer internship. Total years of work experience had a significant, positive effect on how students’ internship supervisor viewed their performance, as did the quality of that career work experience.

The quality and quantity dimensions of work experience also had notable effects on students’ full-time starting salaries and interviewer perceptions of job readiness. Total years of work experience and the qualitative dimensions of that experience had a significant, positive effect on students’ starting full-time salary. In fact, those students who were one standard deviation above the mean in total years of work experience benefited from a 4 percent increase in starting salary. Likewise, individuals scoring one standard deviation above the mean on the quality of career work experience were rewarded with a 2 percent increase in starting salary.

For predicting whether students held a formal leadership position in the MBA program, the total number of years of career work experience was the only positive predictor as well. For every additional year of work experience prior to entering the MBA program, the likelihood that a student held a formal leadership position in the MBA program increased by 3 percent.

In terms of peer-rated leadership effectiveness, the quality of individuals’ career work experience was the only positive prediction. In other words, it is not how many years people have worked, but rather what types of assignments and experiences they encountered during this time that explains their leadership effectiveness. Interestingly, international status and the higher GMAT were both negatively related to peer-rated leadership effectiveness.

While some schools try to attract students without work experience, empirical evidence shows that the quantity and quality of work experience are important factors influencing success in an MBA program.  MBA applicants should take these finding into consideration in their decision making process.

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