For a very long time, investment banks and other financial institutions were the preferred destinations for business school graduates. Those companies offered the highest salaries, the greatest prestige, and the opportunity to live in the world’s most vibrant cities, particularly New York. Today, thanks to numerous factors, the tech industry is displacing finance as the preferred employer for newly-minted MBAs because it can offer similarly high salaries, better office conditions, and the flexibility to either live in a major city or work remotely from anywhere—a growing preference among workers of all types. Even though tech jobs can be demanding, that’s less of a concern for people who have experienced the long-hour, high-pressure work of finance or consulting.
In October of last year, the Wall Street Journal‘s Kelsey Gee reported that Amazon had become the top recruiter at Carnegie Mellon, Duke, and the University of California, Berkeley; and the most prevalent internship destination for students at Michigan, MIT, Dartmouth and Duke. All of those schools’ MBA programs are ranked in the top 20 in the country by US News & World Report, and some are in the top 10. The Seattle-based e-commerce giant has deliberately lured these graduates away from the big banks with an aggressive recruiting strategy, which involves hosting events before school even starts, sending armies of recruiters to campus, and sponsoring case competitions. Gee noted that while tech companies had previously been hesitant to hire business school grads, they are finding an improved culture fit. Given that Amazon and other tech companies need to scale their businesses rapidly, it makes sense to have more people around who know their way around a balance sheet.
This week at the Financial Times, Jonathan Moules spotted this same trend developing internationally as well, noting that banks in Europe are also feeling pressure to compete for MBA talent with Amazon, Google, and Microsoft. JPMorgan Chase ceased its on-campus recruiting program at European business schools entirely in 2013, as it was hiring too few graduates. The bank continues to recruit MBAs in the US but has changed its approach, putting greater emphasis on quality of life, stable holidays, and international rotation opportunities in a counteroffer to some of the tech sector’s main draws. It’s not just big tech companies that are luring these grads away, however: One European student told Moules that most of his classmates wanted to start their own businesses.
In general, the MBA is currently at a bit of a crossroads. Full-time enrollment and applications have gone down for three years in a row while companies are less likely to pay for their employees to complete them than they have been in the past. More specialized business programs have also cut into their prospect pool, with many opting for programs in analytics, operations, or finance to better fit their needs. There will always be a market for managerial talent, but now that the tech sector is becoming a leading buyer in that market, business schools themselves may need to change to cater to students whose career goals lie outside finance or management consulting.