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Management

Survey finds MBA students increasingly picky

Thursday, 17 January 2008

A global study of MBA students at top European, US and Asian institutions shows that certain industries and locations are losing the reputational battle in the global war for talent.

Hill & Knowlton's eighth annual Corporate Reputation Watch study shows that the reputations of key emerging markets, such as Russia, Eastern Europe, Middle East and South Asia, discourage the best talent from working there.

The same applies for multi-billion dollar industries such as alcohol, chemicals and tobacco. The number of MBA students not interested in working in them is more than double that of who are: alcohol (51 percent versus 20 percent), chemicals (48 percent versus 19 percent) and tobacco (67 percent versus 13 percent).

Seeking to associate themselves with great reputations

Paul Taaffe, chairman and CEO at Hill & Knowlton, says that MBAs graduating in a post-Enron, post-WorldCom world have a strong preference for the companies with the best reputations.

He adds that it is clear that recruiters of top talent will need to offer more than just generous compensation and ample opportunity.

The survey found that the leaders of tomorrow were overwhelmingly seeking to associate themselves with industries, and specifically companies, with great reputations.

“Those with inferior reputations will find it very difficult to attract and retain the best and the brightest," Taaffe warns.

The study further reveals that in terms of company ownership, MBA students are dramatically swayed towards publicly listed companies or venture-funded institutions.

Companies know that in the war for talent, they must do all they can to win and their external perception is possibly the most vital weapon in their armoury.

International mobility

The study confirms the importance of reputation with almost three-quarters (73 percent) of MBA students stating that corporate reputation plays an extremely or very important role when considering where to work after completing their MBA, with only one-fifth (20 percent) saying it is fairly important. Only four percent said that reputation was not important.

The results also show significant international mobility among business' most sought-after talent with over three-quarters (76 percent) of those surveyed stating they are looking to change either industries or firms following graduation.

Only one-fifth (19 percent) said they are intending to return to the firm that they worked for prior to their MBA.

A fifth (20 percent) of students surveyed want to move to another country from that which they are studying, while one quarter (25 percent) are studying outside of their home country and plan on staying there.

The emerging markets of the world have got their economic pitch right, however, they are in many cases failing to communicate effectively with the very talent that can help those markets move to the next level.

Ownership type of company

The ownership type of company matters as well. By far the most attractive companies for MBA graduates are those which are publicly traded with almost two-thirds (61 percent) citing interest and only six percent saying they are not interested.

Companies that are owned by venture capital or private equity funds have just over half of MBA students (52 percent) expressing an interest in working for them, versus 12 percent with a lack of interest.

The situation for family-owned companies and government-owned companies - found more commonly in emerging markets - is less positive with both having more students not interested in joining them after graduating than those who are.

For family-owned companies, a quarter (24 percent) expressed interest in joining one, versus 32 percent with a lack of interest.

The survey painted a similar picture for government-owned companies with just under a quarter (23 percent) of students citing interest, versus 46 percent who are not interested.

So how can companies promote reputations that make them more attractive to MBA students? The key factors that drive reputation are perhaps unsurprising:

Factors that drive reputation	% that rate as extremely or very important
Quality of management	89
Quality of products and services	88
Employee talent	83
Financial performance and investment value	71
Innovation	68
Global reach	58
Social responsibility	58
Use of corporate assets	40

MBA students told a slightly different story, however, when asked what factors drive career choice.

The factors listed split broadly into three tiers. The top tier is all about people and the position: employment career opportunities, corporate culture, working environment, employee compensation, benefits package and employee satisfaction.

In the second tier are some of the basic issues about performance. The third tier covers the messages that the company communicates about its ethics and social and environmental responsibility, its broader brand and values agenda.

Important factors in choosing jobs	% that rate as extremely or very important
Career opportunities	95
Corporate culture and working environment	86
Compensation and benefits package	85
Employee satisfaction	84
Quality of products and services	75
Financial performance and growth potential	73
Corporate governance and ethics	58
Social responsibility and community involvement	49
Brand and marketing message	48
Environmental / green policy	34

Taaffe concluded, "The best talent, like the most attractive real estate, will always be in scarce supply. The future winners in the corporate world will be the ones who are the quickest to recognise this and take action to enhance and protect reputation. These top MBAs see career risk on reputationally challenged companies."

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