Whether or not to get an MBA during a recession is one that every prospective student should ask themselves. A recession is usually a short-term phenomenon. You should plan your career long-term when thinking of an MBA.
The economy has been in the doldrums for several years now, but this doesn’t mean that you shouldn’t go for an MBA. Rather than being afraid of getting into debt, consider it an investment in yourself and your future. If you’re going to be in debt anyway, you might as well invest in something that will pay off over time and give you more opportunities for jobs and career advancement.
The truth is that some industries (such as finance) will still be hiring despite the recession because they need capable people who can help them grow their business even when times are tough. Suppose you’re in a highly competitive industry like tech or advertising. In that case, there may not be many jobs available right now, but if you have an outstanding education, you will stand out from the crowd when things pick up again, and employers start hiring again.
In other words, if you’re thinking of getting an MBA when the economy is in recession, it’s a good idea to think long-term.
Recessions last about 18 months and then recover. You should plan your career long-term, even if the recession lasts for a few years. Even if you get into a business school and graduate during a recession, things will be better by the time you start looking for jobs. If you apply for an MBA, the economy will be back on track.
If you are thinking of getting an MBA, here are some factors to keep in mind:
- If you want to get an MBA without taking any loans, now is probably a good time to do so (unless you have enough savings). You will find many schools offering reduced tuition at this point due to the low enrollment rates they face during recessions.
- If you want to get an MBA with a high salary after graduation, then now is probably not a good time to do so — unless the school can guarantee you such a high salary (which is unlikely). However, if your goal is simply to get an MBA degree (and not necessarily a high-paying job), now might be just fine!
What personal factors should you think about before thinking of an MBA?
The best way to answer this question is to look at the current situation and decide based on your circumstances.
Several factors should be considered when making this decision:
Your current job. If you’re happy with your job, there’s no need for an MBA. However, if you aspire to a higher position or salary, an MBA may help you achieve your goals. You could also consider going back to school to transition from one career path to another — for example, changing from business development into finance or marketing.
Your financial situation. The cost of getting an MBA varies by program and school but will likely be in the range of $50,000 to $200,000 (USD). This doesn’t include living expenses while attending school or the opportunity cost of not working while in school and not earning a salary during those months (or years). If money is tight now or could be tight in the future, perhaps now isn’t the right time for an MBA.
The length of your work experience. If you’ve been out of school less than five years and have little work experience under your belt, an MBA might not be worth it because it will take longer before you see any real benefit.
Is it harder to get a top MBA admission during a recession?
The short answer is yes.
MBA admissions get more competitive during recessions for several reasons. First, there are fewer jobs available for MBA graduates. Second, the number of people who apply to business school increases during a recession because many believe that an MBA will help them secure employment faster.
Here are some examples of how an MBA would be more competitive during a recession:
The number of job opportunities for MBA graduates decreases due to fewer business opportunities and less money being invested in companies. This means that there are fewer positions available at companies and fewer jobs at smaller companies that often require MBAs but don’t have the budget to hire new employees or offer tuition reimbursement programs.
The number of applicants increases because people see an MBA as a way out of their current situation. In particular, they may believe that they have no other option than to go back to school to secure employment faster. Some people also attempt to use their current financial problems as an excuse for applying even though they do not want an MBA after all (but are just trying to find something else). This is sometimes called “self-selection” – when candidates select themselves out of the process by demonstrating that they do not belong at a particular school.
Is it harder to switch careers and industries through an MBA in a recession?
The answer is very obviously yes. The market is flooded with applicants, and there are fewer positions available. In addition, companies are more concerned about hiring someone who might leave them for another post in six months.
When more people are looking for jobs than there are jobs available, employers can be pickier about who they hire. This makes it harder for people to find work in their desired field and increases the likelihood that they will have to settle for less than ideal employment conditions. If you apply to an MBA program during a recession, you should probably try to build on your prior experience in the MBA program and then seek a change. The change will be more difficult at this time.
The current economic crisis has challenged businesses and industries, but some fields have been hit particularly hard. Many consulting firms have had difficulty retaining top talent due to the high salaries offered by private equity firms and hedge funds. There may be more opportunities in this field than a few years ago.
Final word – think career, not job.
The decision to get an MBA is a big one. If you’re considering getting one now, the question is whether it’s a good time to do so.
The answer depends on your situation, but here are some things to consider:
- Think career, not job. Economic cycles will come and go. You should keep investing in your career.
- Consider your occupation and industry first. The best schools for you may differ depending on what kind of work you do and which industries interest you most.
- Evaluate the school’s reputation and student outcomes first, then look at the location and cost secondarily (if at all). Schools with solid reputations tend to have better job placement rates and alumni networks — both of which matter more than anything else when it comes to finding a good job after graduation, regardless of the school’s economic climate or geographic location.