With the exception of the Great Depression, the Great Recession wrecked havoc on the world economy like no other economic downturn. No industry was immune from the devastation, including business schools which saw placement stats plummet along with starting salaries and bonuses.
Though the start of the Great Recession can be placed in 2008, the graduating class of MBAs that year went through relatively unscathed, in part because the worst of it occurred after they started their new jobs in August and September of that year.
Not so for the Class of 2009. Average starting salaries and bonuses fell dramatically at some of the best business schools. At the Wharton School, MBAs saw their starting pay and bonus fall 9.5% in 2009 to $123,741 from $136,676 in 2008. At Harvard Business School, the drop was 9.0%, to $131,219 from $144,261, and at Stanford Graduate School of Business it was 5.7%, to $132,769 from $140,771.
Which schools have completely recovered from the recession?
The more relevant question now is which schools have been able to recover those losses in pay and which have actually gained ground on their 2008 numbers. For this analysis, we’re examining data through 2011, even though most schools have reported their 2012 numbers which show continued improvement in the MBA job market.
The reason: the statistics come from the schools as reported to U.S. News & World Report for its annual ranking. U.S. News adjusts these numbers, accounting for graduates who do not receive starting bonuses so that they are true averages. The schools report average salary and average bonus numbers separately and fail to adjust the bonus averages for graduates who do not get a starting bonus. We’ll update the analysis once U.S. News publishes the 2012 numbers in April.
As of 2011, not all the top schools have completely bounced back. Some 12 out of the top 30 schools in U.S. News’ ranking reported lower average salary and bonus for its graduating MBAs than they did in 2008, including Harvard, Washington University’s Olin School and Cornell University’s Johnson School.
In 2011, for example, Harvard MBAs were making nearly 4% less than the Class of 2008 made at the starting gate. The school having the most difficult time recovering up until 2011? Georgia Tech. Its MBAs in 2011 were still down 7.5% on average starting salary and bonus from 2008.
Some 18 out of 30 top schools were fully recovered from the recession by 2011
The remaining 18 schools out of the top 30, on the other hand, have not only recovered the losses from the Great Recession; they have reported gains over that pre-recessionary year. Leading the pack is Emory University’s Goizueta Business School which had been in the midst of implementing a strategy that focused on student outcomes (see Emory’s Goizueta School: Anatomy of a Turnaround Few Knew Was Needed). Average salary and bonus at Goizueta not only recovered from the recession but were up 18.2% in 2011 from 2009. As noted earlier, further improvements occurred for the Class of 2012.