Global Demand for Graduate
Management Education: New GMAC Survey Research
Rahul CHOUDAHA, PhD
Applications
for graduate management education (GME) increased by 2.4 percent based on the
weighted absolute change analysis of 731 programs worldwide that responded to
the 2019 and 2020 Application Trends Survey. This is
a reversal from a decline of 3.1 percent in the applications last year.
This
reversal of trends is in line with a well-established dynamic in which the
demand for b-schools increases during economic downturns. The Guardian notes,
Demand for MBA courses tends to be countercyclical.When recession looms, as
is now the case, the opportunity cost of taking a career break to update skills
and build a professional network at business school reduces greatly.
However,
the 2020 application season was unlike any other, resulting in a
reconfiguration of the enrollment funnel. The pandemic-induced economic
downturn, coupled with the disruption of travel and on-campus classes,
necessitated that business schools and candidates make choices during times of
continuing uncertainty.
Many
b-schools responded to the uncertainty by adopting flexible admissions
approaches, including extended deadlines and deferral policies. As a result,
the number of applications increased. Schools also hedged enrollment risks by
increasing acceptance rates. However, translating the increase in applications
into actual enrollments was a challenge for many schools.
For
candidates, GME offers a pathway to emerge from the economic downturn with
better career prospects. While more candidates applied to b-schools; however,
deferral rates also went up due to concerns about online learning, travel, and
visas. For example, a previous GMAC poll of prospective students indicated that
international
candidates were more likely than domestic candidates to ask for deferrals rather
than start a program online.
Overall,
2 out of 3 (67%) programs reported an increase in 2020 applications compared to
2 out of 5 (41%) in 2019. Median acceptance rates were slightly higher (70%)
than 65% in 2019. Overall, median deferral rates increased from 2 percent to 6
percent in 2020. As a result, median yield rates for all programs reduced from
62 percent to 60 percent. In sum, the pandemic-induced uncertainty impacted the
decisions of b-schools and reconfigured the enrollment funnel.
Among
the programs that responded to the 2020 and 2019 surveys (Absolute year-on-year
change), the total number of applications shrunk for the Asia Pacific region
(-7.1%) as compared to an increase for Canada (13%), Europe (24%), and the US
(21%). Likewise, based on the responses of the programs participating in the
2020 survey (relative change analysis), a smaller proportion of programs in the
Asia Pacific (57%) reported growth in applications as compared to Canada (79%),
Europe (72%) and the US (67%). This somewhat divergent growth pattern of
graduate management programs in the Asia Pacific reflects the diversity and
scale of Asia Pacific. The variations in the timing of applications with the
pandemic along with the differences in candidate profiles (more domestic
candidates), could have also contributed to the divergent impact.
Some
of the strategies adopted by business schools in response to the pandemic may
also have influenced the enrollment outcomes. For example, respondents from
graduate management programs in the Asia Pacific (58%) were more likely to report
increased budgets for online initiatives than the US respondents (25%).
Likewise, programs in the Asia Pacific (39%) were also more likely to report
that they delayed the program start date as compared to Canada (18%) and the US
(6%).
In
sum, one of the defining characteristics of the 2020 application season is the
reconfiguration of the enrollment funnel as b-schools and candidates hedged
their risks and managed uncertainties. Looking ahead, the results of the US
presidential election would interact with the pandemic uncertainties to reshape global student mobility and reconfigure the
enrollment funnel. The data shared in the report illustrates how the global
landscape of graduate management education continues to evolve and confirms the
importance of continuous monitoring
and understanding of trends to shape enrollment strategies.
About the Survey
The 2020 Application
Trends Survey data was collected between July 30 and September 14,
2020, and garnered responses from 1,085 programs at 325 business schools
worldwide. The 2020 report, set in the context of COVID-19, benchmarks
application trends by regions and programs and offers insights into the global
demand for graduate management education. The annual survey of business school
admissions offices worldwide provides timely insights into understanding
candidate pipeline and behavior. This survey benefits admissions, recruitment,
and marketing professionals by informing their future strategies and practices.
It covers the following dimensions:
Dr. Rahul Choudaha is Director of Industry Insights & Research
Communications at GMAC in the
Washington DC area. He is an evangelist and analyst of graduate management
education, focusing on mobility trends, student choices, and enrolment
strategies. Choudaha has presented more than 150 sessions at professional
conferences and has been quoted over 300 times in global
publications. Follow him on LinkedIn and Twitter.
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