According to research from the Graduate Management Admission Council, the number of GMAT test scores sent to schools for two-year full-time MBAs has been on a steady decline. Even top-tier programs like Harvard Business School have seen a reduction in applications.
The trend has pushed many institutions to rethink their offerings. For example, "Tippie College of Business joins a growing list of others shutting down flagship MBA programs in favor of shorter, specialized masters and online degrees," the Journal reported.
One of the reasons attached to the decline in MBA popularity was the high amount of debt carried by most Millennials, and now Gen Z, upon graduation forcing them straight into the workforce. Although I agree that student and credit card debt has gotten out of control, I personally think there are a few other reasons behind why millennials and younger generations are opting to forgo traditional MBA programs.
The job market.
The US unemployment rate is the lowest its been in recent history. In the past, to ensure you had a job upon graduation (in a desirable field), many opted to stay in school and earn their MBAs to be more competitive once they entered the workforce.
With most companies struggling to find talent, new grads are a great source of high-potential talent that can be developed and molded to fit roles across organizations. They learn fast, and they work hard.
Personally, I had no idea what I wanted to do after undergrad. Lucky, I found a sales job that offered the perspective and real-world experience I needed to make decisions about what I liked and didn't like. If I had gone straight to graduate school without practical experience, I would have likely picked a field prematurely. With the current job market, Millennials and Gen Z don't have to roll the dice.
Speed and flexibility.
I'll admit it, Millennials and Gen Z are impatient. The need for instant gratification doesn't mean we're spoiled or privileged, but its a byproduct of growing up in the tech evolution. We can access information anytime and anywhere through the internet, buy something and have it the next day, and immediately connect with friends and brands around the world through social media.
We value speed because with speed comes flexibility. That's my guess as to why short online, part-time, and specialized MBA programs are growing in popularity. And, let's be honest, not having to make a fulltime two-year commitment is nice.
The new form of influence.
In the past, you needed the experience, title, and education if you wanted to sit in a position of power. Not anymore. The millennial generation was the first to grow up with YouTube sensations, blogs, teenage multi-million dollar app developers, and social media influencers.
Now, it doesn't take the same amount of time to gain influence and grow your personal brand. Instead of authority, millennials value authenticity. Instead of clout, they value courage and transparency.
The decline in traditional MBA applications is a sign that things need to change. If they want to keep up with the times, institutions and universities need to understand who their target audience is, and what they value.