An MBA degree and a juicy payment go hand in hand. Getting higher payment and higher standard of living are among the motives that many have when deciding to go for an MBA, along with their personal professional ambitions and career development plans. However, this cannot be achieved just anywhere. That’s why the “Where?” question reasonably comes after the degree is obtained.
The Where question
With an MBA in hand, many turn their eyes to global financial centres. A financial centre is defined as a global city that is home to a large number of internationally significant banks, large corporations, businesses and stock exchanges. There are three prime factors that make a certain city a financial hub – a pool of money to lend or invest, a decent legal framework and high-quality human resources. Following recent signs of economic recovery globally, businesses have started to regain their confidence. Hiring projections follow the same positive trend.
What are the hiring projections?
According to the latest GMAC Corporate Recruiters Survey Hiring Report that came out in 2013, in general, the hiring outlook for graduating business students in 2013 improved slightly compared with 2012. Overall, three quarters of the companies planned to hire MBAs in 2013, up from 71% in 2012. Employers in the Asia-Pacific region and the United States anticipated continued growth in hiring of all graduate management candidate types, whereas European firms projected no change in demand for recent MBA graduates and slightly lower hiring levels last year for all candidate types compared with 2012.
Overall, 2013 saw growth, albeit conservative, in the percentage of U.S. companies that hired MBA graduates. U.S. employers show the greatest demand for MBAs worldwide, as 85% of the firms hired an MBA in 2013, up from 82% in 2012.
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In the Asia-Pacific region, where companies are experiencing robust growth and have plans for market expansion in 2013, the demand for MBAs is on the rise. The survey showed an increased desire by Asia-Pacific companies to hire recent business graduates amid plans to focus on expanding their customer base while attempting to reduce costs. Sixty-one percent of Asia-Pacific companies planned to hire an MBA in 2013, up from 54% in 2012.
In Europe, hiring projections reflected employer sentiments about the region’s struggling economy and a focus on efficiency in organisational goals. The hiring outlook for MBAs remains stable as the number of companies that hired MBAs in 2013 was the same as in 2012 – 54%. Of the European employers who knew 2013 hiring plans, 24% were not planning to hire any type of business graduates in 2013, mostly due to a lack of available job openings.
Hiring trends show that the greatest growth in demand for MBAs in 2013 compared with last year is coming from the energy/utilities and health care/ pharmaceuticals sectors, industries that do not typically attract great numbers of MBA job seekers. Hiring projections for MBA talent in 2013 also increased in the consulting and finance/accounting sectors, and hold steady across other industries, except for manufacturing, where they have declined.
Statistics don’t lie
The salaries outlook follows global hiring business trends. According to the GMAC report, in the Asia-Pacific geographic region 37% of the companies plan to increase base salaries for MBA candidates above the rate of inflation this year, and 22% plan to increase salaries at the rate of inflation.
In Europe, nearly one-quarter or 24% of European companies hiring in 2013 planned to increase base salaries for MBAs above the rate of inflation and another 26% planned to increase salaries with inflation. At the same time, half of European companies that hired recent MBAs in 2013 maintained 2012 salary levels. In the U.S., 65% of companies kept base salaries for new MBA hires in 2013 the same as 2012 levels. A total of 23% of the employers offered salaries that kept pace with inflation and only 11% planned to raise base salaries above the rate of inflation. Starting MBA salaries in countries classified by the World Bank as high income were projected to average 94,500 USD in 2013 compared with median MBA starting salaries of 32,156 USD expected this year from employers located in middle income countries.
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The top places
Following new economic realities, the financial centres map has changed as investors turn their eyes eastwards in search of new business opportunities following the financial crisis that blasted in the U.S. in 2008 and its spread-out across Europe. A large number of com panies opened offices and relocated their headquarters and production units to the Asia Pacific region where economic growth continued its pace. Asiabased financial centres rank among the top financial leaders worldwide. According to the 2013 Xinhua-Dow Jones International Financial Centers Development Index, the top ten financial centres into the world are: New York City, London, Hong Kong, Tokyo, Singapore, Shanghai, Paris, Frankfurt, Chicago and Sydney. During much of the 20th century, New York and London were the leaders, but over the past few decades, with the rise of a multipolar world with new regional powers and global capitalism, numerous financial centres have challenged the predominance of these two financial hubs, particularly those in Asia – Hong Kong, Tokyo and Singapore.
Although New York and London still have strengths, many large businesses have turned their eyes eastwards. Hong Kong perfectly illustrates this trend. In 2010, the Hong Kong Stock Exchange raised nearly 53 billion USD for initial public offerings, compared with only 42 billion USD for the U.S. and 16 billion USD in London. Hong Kong was the site of the world’s largest initial public offering in 2006 of the 19.1 billion USD Industrial and Commercial Bank of China.