Live Updates: Coronavirus Impact On Business Schools
What is the impact of coronavirus on business schools? We bring you the latest updates including campus closures, changes to MBA admission requirements, and more
- MBA application deadlines released amid COVID-19 disruption
A new Executive MBA, launched by the University of St Gallen and ETH Zurich, puts executives at the heart of business and technology and empowers them to lead in the name of social impact
Starting salaries for MBA consultants at McKinsey, Bain, and BCG frozen in 2021, while many other top consulting firms cut their pay packets
MBA Roundtable survey of business school deans reveals how COVID-19 is not only impacting MBA program delivery, but the MBA curriculum itself
COVID-19 continues to disrupt graduate management education in 2021 as business schools make clear their plans to sit out MBA rankings
EMBA X: The Executive MBA Combining Business & Technology
Strong leadership, technology, and social impact. A triumvirate that should sit at the heart of business in the 21st century. That’s what two of Switzerland’s top universities believe, as they launch a new Executive MBA that hopes to drive forward a mentality of social responsibility among executives.
EMBA X is the result of a collaboration between the University of St Gallen and ETH Zurich.
The two schools began developing the 18-month program in 2019 with the aim of tackling the future challenges facing global society. It was an opportunity to combine the leadership expertise of St Gallen with the technical prowess of ETH Zurich to provide executives with a business education fit for the future.
Why EMBA X?
Even before the COVID-19 pandemic, a shift was underway. Digital disruption posed a challenge to the way executives lead their companies.
There was also already growing pressure on companies to move away from a model of shareholder primacy and toward one of stakeholder value, considering employees, the environment, and wider society.
EMBA X aims to educate executives on how to lead their companies with this in mind.
Recognizing where technology can have a positive impact is something Karolin Frankenberger (pictured right), academic director of the EMBA programs at the University of St.Gallen and co-director of EMBA X, emphasizes was key to the design of the program.
“What’s important to me is executives need a willingness to make a significant impact on society,” she says, “the new EMBA will [push] this.”
Alongside leadership development and implementing technology for social good, the EMBA X program also focuses on personal development, with an integrated Personal Development Journey running throughout the course.
The aim is to send executives back into their companies with the ability to extend their own personal development and cutting-edge knowledge to their teams. There should be a trickle-down effect from the top that results in an overall positive impact for the organization.
EMBA X: Business + Technology
Combining the expertise of a business school with a science and technology-focused university gave the EMBA X team the advantage of designing a program that would sit at the cutting edge of industry.
But you can’t do that without first-hand industry insight. That’s where Claudio Feser came in. Claudio (pictured left) is a senior advisor at McKinsey & Company, and acted as industry expert and senior advisor on the creation of EMBA X.
As he made sure the program was relevant to the realities of the contemporary business world, he notes the challenges faced by the two universities when collaborating.
“There are very different cultures, perspectives, and priorities with the two,” he says, “but our mission of creating something to prepare the leaders of tomorrow was so compelling that it made it easier to bring the two institutions together.”
The program was created to enable leaders to learn skills that will become more prevalent in the upcoming years. As further technological advances and demands for more corporate responsibility blend together new roles will be created that executives on the EMBA X program will have to both fill and take on themselves.
“Many of the jobs that are going to exist by 2030 don’t yet exist,” Claudio emphasizes.
“Executives need to know about emerging technologies and the impact they have on business,” Karolin adds. That’s why the team chose to eschew a traditional EMBA structure in favor of a more integrated approach.
Teaching on each module will be done with academics from both institutions in the same class, rather than being split down the middle. Students will learn in a hybrid format that splits their time approximately 60% in person and 40% online.
They'll cover topics like business innovation, adaptive technology, and sustainable business, all encouraged by targeted skills building and personal development.
They’ll also be well prepared to lead in a post-COVID-19 economy. Though the program was in its early design stages pre-coronavirus, the EMBA X team were pushed to design most of the program remotely when the pandemic hit.
The impact of COVID-19
When the two schools got together to flesh out the program’s details, they were hit by the worst global health crisis for a century. But the pandemic accelerated trends that were already underway. Trends that the team had in mind when initially designing EMBA X, which starts in February 2022.
“The whole situation and complexity of response to COVID-19 not only medically but economically and socially gave us more confidence in the main principles we wanted to build into the program,” explains Stefano Brusoni, professor of technology and innovation management at ETH Zurich and co-director of EMBA X.
The overarching theme of the program is technology’s role in the future of leadership. The importance of sustainability, science and technology, and effective management have been underlined by the coronavirus crisis and have cemented the two universities faith in their new program.
It's one thing to adapt a program from in-person to online, as most schools did at the start of COVID-19 restrictions. To create a program remotely in a pandemic, Stefano says, is a different task entirely.
“Everything is integrated now. COVID-19 has taken away the boundaries,” he says.
The coronavirus pandemic has taken a decade of change, accelerated it, and condensed it into a few short months. The challenges the EMBA X program was initially designed to meet have already arrived.
If the EMBA X program stays true to its message, the businesses that will benefit will be ones led by strong, tech-savvy leaders with a social conscience.
McKinsey, Bain, BCG Salaries Frozen As MBA Consultants Impacted By COVID
MBA students are drawn to the consulting industry for its fast-paced work environment and generous salaries. Graduates will be dismayed, then, to find that COVID-19 has impacted MBA consulting salaries.
80% of consulting firms either cut or froze MBA consultant starting salaries for 2021, according to the ManagementConsulted 2021 Salary Report. McKinsey, Bain, and Boston Consulting Group (BCG)—also known as the ‘Big Three’—all froze their starting salaries.
This comes after Bain recorded its best ever quarter in Q3 2020 and after McKinsey told BusinessBecause that 2021 would be its record MBA hiring year.
McKinsey, Bain & BCG consultant salaries frozen
McKinsey, Bain, and BCG remain among the top employers of MBA students in 2021. Brian Rolfe, global talent acquisition lead for McKinsey, told BusinessBecause that 2021 would see “the largest incoming class in McKinsey’s history”.
MBA salaries at all three, however, have been frozen at the same level as in 2020, at a base salary of $165,000.
Salaries are still very high compared with other industries. The ManagementConsulted report estimates that total compensation for MBA hires at Bain and BCG (combining salary, performance bonuses, and signing bonus) can reach up to $236,000, while McKinsey MBA hires receive $230,000.
Total compensation includes base salary plus performance and signing bonuses
To break this down, base salaries for MBAs at the Big Three consulting firms all come in at $165k a year. Performance bonuses can add up to $41,500 (25%), while signing bonus comes in at around $30,000.
Top firms like the Big Three seem to have taken advantage of market disruption in 2020 when other top MBA recruiters, especially those who for some time had been poaching recruits from consulting firms, largely froze hiring.
Salaries cut at Deloitte, KPMG & boutique consulting firms
Other consulting firms witnessed a harsher impact of COVID-19 on their MBA hiring. Deloitte, PwC, and KPMG cut MBA consultant salaries.
New recruits at Deloitte Consulting can expect around $151,000 in total compensation, $22,000 less than new hires in 2020, back closer to the rate paid in 2018.
KPMG slashed salaries by $15,000, from $190,000 to $175,000. KPMG Strategy & Operations (S&O) recruits saw salaries cut from $230,000 to $215,000.
EY was the only firm to increase MBA starting salaries, albeit by just $5,000.
According to ManagementConsulted, some boutique consulting firms offer higher overall compensation than some of the Big Three. These firms offer higher pay-packets as a way of competing with better-known, global brands.
Total compensation at LEK Consulting can come in at up to $283,000. On top of the $165,000 annual salary, and up to $25,000 performance bonus and a $55,000 signing bonus, employees could earn a possible $38,000 through the company profit sharing scheme. This is an incentive offered by smaller firms as a way of differentiating themselves.
Close behind is PwC Strategy&, where total compensation can reach $253,400, followed by AlixPartners, where total compensation can tally up to $250,000.
Will consultant salaries recover?
Part of the reason for diminishing MBA salaries was the predicted impact of the COVID-19 pandemic on the consulting industry. Many firms anticipated the same widespread economic damage to their industry as with many other industries, and froze or cut salaries accordingly.
On the contrary, consulting saw a sharp increase in demand in 2020, as companies looked for consultant advice on navigating uncertainty or even restructuring their businesses.
MBA graduates can therefore expect starting salaries to grow again in the future, while MBA hiring looks set to skyrocket as consulting firms look to meet growing demand.
How Is COVID-19 Changing The MBA Curriculum?
When the COVID-19 pandemic hit, we responded by opening our laptops and turning on our webcams. Business schools around the world were forced to close their doors and move learning into a virtual or hybrid learning environment.
But it's not only how MBA programs are delivered that has changed. A new report from the MBA Roundtable, which surveyed 155 deans, directors, and faculty from 118 business schools around the world, reveals how COVID-19 is also impacting the MBA curriculum.
COVID-19 impact on the MBA curriculum
In nine out of 10 schools, learning objectives have remained exactly the same as pre-pandemic. Around half, however, reported some changes to the curriculum content.
COVID-19 as a topic unsurprisingly made its way into many programs. This most frequently came into courses on leadership, human resources, supply chain, and ethics. Rarer were courses dedicated entirely to COVID-19, appearing in just 17% of programs.
One respondent commented: 'Covid is a common concept given that we are all dealing with it. In a way, it has helped with integrating concepts across courses.'
Business schools have brought in other changes to accommodate some of the adverse aspects of studying during the pandemic. A majority of courses have modified assignments, have brought in more flexible deadlines, and have introduced pass or fail marking.
Assessments have changed too, with many schools adjusting time limits for exams and assessments. 40% of schools have modified these assessments, while 29% have actually reduced the overall number.
COVID-19 impact on MBA program delivery
Unsurprisingly, a shift in how business school programs were delivered was one of the most widespread changes that schools witnessed following the coronavirus outbreak.
In total, 88% of programs saw a change in the mode of delivery of their programs. For in-person programs, this rises to 98%. Hybrid delivery (balancing virtual and in-person) was the preferred form of delivery, chosen by 59% of programs, while the other 39% went entirely virtual.
The change in mode of delivery saw an influx of new teaching tools into the virtual or hybrid classroom. Breakout sessions were most popular, used significantly by 95% of programs, as were messaging and chat tools (93%). Lower down the list includes tools like gamification, Q&A functions, and in-class polls.
One of the more significant changes was a shift away from lectures. Use of lectures as a teaching method went down 38%. Instead, professors opted for ‘flipped classrooms’—where preparatory reading is done at home and class time is used for hands-on problem solving—which went up 72%.
IE professor Enrique Dans recognizes the challenge of engaging students in lectures. “If it's just you talking, and your teaching is one way only, you can try to replicate that in an online setting—but it's really boring, and students don't like it.”
Despite these changes, the majority of business schools remain confident about the quality and rigor of the MBA curricula.
Some aspects of delivery have been significantly more challenging, however: namely inclusivity and student engagement. 58% said that it was more difficult to deliver an inclusive learning experience, while 86% struggled with student engagement.
Outside of the classroom, schools met challenges in providing the other aspects which candidates come to business school for. Community building was found to be the greatest challenge business schools faced, with 88% finding it more difficult than pre-pandemic.
Zoom-based socials and online events have become ubiquitous, helping business schools attempt to recreate extracurriculars which forms a major appeal of in-person programs.
While business schools hope that, in time, students will begin to return to campuses, the majority remain aware that these changes may persist well into 2021. For now, laptop-based student life and a COVID-influenced MBA curriculum remains the norm.
The ‘Current And Future Impact Of COVID-19 On The Business School Curriculum’ report was conducted by the MBA Roundtable, a non-profit that facilitates the exchange of information and resources on curricular innovation. They reached out to over 1500 contacts from 379 schools around the world to see how the pandemic had impacted their curriculum.
Of the 155 participants, representing 118 schools, the majority (140) were based in the US, with a handful from Canada (6), Europe (5), and Asia-Pacific (3). All respondents are affiliated with MBA programs—65% for full-time MBAs and 71% for part-time MBAs—while some are attached to business master’s programs too.
In terms of roles, 19% are deans, 37% are academic directors, 28% are non-academic directors, and 31% are faculty.
Business Schools Snub 2021 MBA Rankings
To say COVID-19 has disrupted graduate management education is an understatement. Schools last year were forced to move most programs online; graduate career prospects were disrupted by a poor jobs market and reduced mobility; and students complained tuition no longer reflected value.
Now the pandemic has hit another aspect of business education: MBA rankings. A new survey by educational services company, Kaplan, has revealed fewer than a third (28%) of US business schools plan to participate in all MBA rankings in 2021.
Kaplan surveyed admissions officers from 90 full-time business schools across the US late last year. Among them were 14 of the top 50 programs in the US, as ranked by US News & World Report. Of the schools polled, 62% said they plan to participate in some MBA rankings in 2021; 10% said they don’t plan to participate in any.
Reluctance to participate in rankings this year is a stance shared by schools globally. 62 of the world’s best business schools were missing from the Economist MBA ranking released in January 2020. The schools missing were either ineligible or declined to participate, or they chose not to survey their alumni and students .
The absentees included Harvard Business School, Stanford, Wharton, London Business School, INSEAD, and both the UK’s Oxford Saïd Business School and Cambridge Judge Business School among others.
Schools missing from the Economist's MBA Ranking 2021
Why are business schools rejecting MBA rankings?
The majority of business schools have added a layer of flexibility to their admissions process to help deal with the fallout from the pandemic. This includes making the GMAT or GRE optional. A school’s incoming cohort’s average test score is a key data point in many MBA rankings, and so waiving test scores would likely alter a school’s position in the ranking.
As the economy has been hit hard too, it’s likely that many schools found it challenging to boast employment and job placement figures as impressive as previous years. Salary increase post-MBA is weighted heavily in some rankings—like the Financial Times—and so as companies feel the economic squeeze and either hire fewer graduates or hire them on lower salaries, schools may be reluctant to report the figures.
This may recover later in 2021 as the Graduate Management Admission Council’s (GMAC) Corporate Recruiters Survey showed MBA starting salaries are set to bounce back this year. That doesn’t mean rankings will return to normal though. Not every organization chose to publish rankings amid the pandemic. Bloomberg Businessweek cancelled their 2020 MBA ranking.
Long-term ranking fatigue will continue. Schools don't feel rankings represent what they truly offer. Schools also have enough to worry about during the pandemic—from student and staff safety to ensuring teaching quality is upheld online—and the administrative burden of the rankings likely looks uninviting.
The future of MBA rankings in 2021
An admissions officer at a school that still plans to participate in some of the rankings told Kaplan they still believe there’s value in the rankings and candidates can use them as a resource to compare schools.
There’s also value for schools who come out on top. IESE Business School topped the Economist’s ranking this year and took to social media to celebrate, with no mention of the many big-name schools who didn't participate.
For publications like the Economist, rankings generate an audience. Amid a pandemic that has also hit the media hard, it’s no surprise there’s still interest from publications in producing rankings.
However, optimism that the MBA rankings in 2021 still offer candidates value isn’t shared by everyone though.
“The challenges associated with test centers closing and admissions processes changing to accommodate this made for a less quantitative decision-making model,” says an admissions officer from a school not planning on participating in any rankings this year. “It does not easily translate to the criteria forced by the ranking methodology.”
Pascal Michels, IESE’s former director of MBA admissions and now a senior consultant and director at MBA admissions company, Menlo Coaching, said in a LinkedIn post that his satisfaction with IESE topping the list was overshadowed by the list of schools not there.
“With the entire US top brass and heavy hitters like London Business School and INSEAD declining to participate, it seems that the industry is sending a clear message about rankings fatigue. I personally struggle to see how this resource could in any way be meaningful to applicants,” he says.
Menlo Coaching also tap into one of the major problems with MBA rankings, which is that the end result is often skewed heavily by average GMAT score and salary data.
Are rankings still relevant?
An MBA ranking that’s missing 62 of the world’s best schools should be looked at cautiously. But then so too should an MBA ranking with those schools included.
Each individual ranking, whether it be from the Financial Times, The Economist, or US News, has a different methodology from which schools are ranked. Just because a school is top doesn’t mean it’s the best school for you.
MBA rankings should act as a guide; not as the be all and end all. You should focus too on whether you ‘fit’ with your target school. You should build a network of business school admissions staff and speak to MBA students past and present. You should approach the rankings as a resource that makes up a small part of your overall school selection process.
Check out our BusinessBecause MBA Application Guide 2020-21 to help you navigate your MBA application.