Global Study of Elite MBA Students Reveals Winners and Losers in the War For Top Talent
Jan 16, 2008
A global study of MBA students at top European, US and Asian schools1 today reveals the winners and losers in the global war for talent. Hill & Knowlton’s eighth annual Corporate Reputation Watch study shows that certain industries and locations are losing the reputational battle in the global war for talent.
In examining MBA students’ career aspirations, the study shows that the reputations of key emerging markets (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 with more than double the number of MBA students not interested in working in them than those who are: alcohol (51 per cent versus 20 per cent); chemicals (48 per cent versus 19 percent); and tobacco (67 per cent versus 13 per cent). Interestingly both the pharmaceutical industry and oil and gas industries also are in the situation where their reputations put off slightly more students than they attract.
The study further reveals that in terms of company ownership, MBA students are dramatically swayed towards listed companies or venture-funded institutions.
Andrew Laurence, Chairman and CEO, Hill & Knowlton EMEA said, “MBAs graduating in a post-Enron, post-Parmalat world have a strong preference for the companies with the best reputations. It is clear that recruiters of top talent will need to offer more than just generous compensation and ample opportunity. The leaders of tomorrow are overwhelmingly seeking to associate themselves with industries, and specifically companies, with great reputations. Those with inferior reputations will find it very difficult and expensive to attract and retain the best and the brightest.”
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. The study confirms the importance of reputation with almost three quarters (73 per cent) 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 per cent) saying it is fairly important. In fact, only four per cent said that reputation was not important.
The results also show significant international mobility among business’ most sought after talent with over three quarters (76 per cent) of those surveyed stating they are looking to change either industries or firms following graduation. Only one fifth (19 per cent) said they are intending to return to the firm that they worked for prior to their MBA. A fifth (20 per cent) of students surveyed want to move to another country from that in which they are studying, whilst one quarter (25 per cent) are studying outside of their home country and plan on staying there. The survey also reveals some interesting regional differences with students from Europe more likely to seek employment beyond their country of origin than in the survey overall (28 per cent versus 20 per cent).
Given this mobility, the study provides invaluable insight on the regions that are attracting talent. Whilst the emerging markets of the world have got their economic pitch right, they are in many cases failing to communicate effectively with the very talent that can help those markets move to the next level.
However, European students are relatively more interested in working in the Middle East (32 per cent versus 20 per cent) and Eastern Europe (27 per cent versus 18 per cent) than the overall sample. When considering some specific emerging markets we see that students at the European business schools see the UAE and Dubai as more attractive than their peers (40 per cent versus 30 per cent)
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 per cent) citing interest and only 6 per cent saying they are not interested. Companies which are owned by venture capital or private equity funds have just over half of MBA students (52 per cent) expressing an interest in working for them, versus 12 per cent 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 per cent) expressed interest in joining one, versus 32 per cent with a lack of interest. The survey painted a similar picture for government-owned companies with just under a quarter (23 per cent) of students citing interest, versus 46 per cent who are not interested.
Interestingly European students appear to place less importance on social responsibility when assessing a company’s reputation with 38 per cent versus citing it as extremely or very important compared to 49 per cent in the overall sample.
According to The Graduate Management Admission Council (GMAC)*, graduating MBAs and other graduate business students are the third major source of staffing for open positions amongst corporates. Furthermore, corporate recruiters planned to increase the numbers of graduate business student hires by 18 per cent in 2007, so it is clearly important that they are attracting the best from this pool of talent.
Andrew Laurence, Chairman and CEO, Hill & Knowlton EMEA, concluded, “Caring and generous companies are very attractive – MBA students want a well developed career path and a generous compensation package. But money isn’t the be all and end all. The best talent, like the most attractive property, 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.”