Officials at top business schools report that during this fall's recruiting season, salary offers and signing bonuses for M.B.A.s jumped significantly, especially for those seeking jobs as investment bankers and consultants.
And executives at major firms on Wall Street and elsewhere say they are hiring more people and returning to campuses this fall with more full-time offers to meet their growing business needs.
Average Rises Above $82,000
After remaining relatively stagnant since 2001, total compensation for M.B.A.s is matching the record levels of pay hit during the peak of the dot-com boom, according to the most recent survey by TopMBA.com, an online recruiting and education site. According to the survey, companies report that the average M.B.A. salary went above $82,000 in 2004, up more than 9% from 2003.
Among the M.B.A.s seeing the biggest increases: those with a focus on management consulting and finance. Average salaries in finance increased 21% to $98,477 in 2004 from $81,144 in 2003, while average salaries for management consultants jumped 16% to $86,233 during the same period, according to the survey.
The generous compensation packages come amid stronger economic signs. Banks and consulting firms - some of which had slashed their work force in recent years - are looking to boost their ranks. Goldman Sachs Group Inc., for example, said it plans to hire roughly 200 M.B.A.s from the class of 2005, a 30% increase from the year before. Bain & Co., a Boston consulting firm, is hiring a "record" level of M.B.A.s, says David Sanderson, head of global recruiting.
Head of the Class: Consultants
"The consulting firms have led the charge," with base salaries rising about 10%, says Al Cotrone, director of career development at the University of Michigan's Ross School of Business. General management firms have also raised average salaries, he says, to $90,000 and above, after holding steady at about $85,000.
At Dartmouth's Tuck School of Business, the average consulting salary for an M.B.A. graduate peaked at $110,000 in 2001, then fell to $100,000 in 2002, says Richard McNulty, director of the career-development office. Today, graduates are seeing consulting salaries up to $120,000, with sign-on bonuses ranging up to $30,000.
"The mood in my class is very optimistic," says Tracy Long, a second-year student at Stanford Graduate School of Business. "Most people have an offer" from the firms that employed them before they went back to school or as summer interns this year.
The increased competition has forced some firms back to campus to make more hiring offers or raise their bids. When Sean Huss, a second-year M.B.A. student at Michigan, started interviewing for investment banking jobs this fall, he heard that one bank was topping offers from all the others - but many of the banks soon followed suit. The firm that employed him as an intern last summer and then offered him a job has since revised its initial offer to match the going rate, he says.
Another good sign: Some banks are guaranteeing bonuses for a graduate's first year of employment, says Julie Morton, associate dean of M.B.A. career services at the University of Chicago Graduate School of Business. An M.B.A.'s first year of employment is typically a short one, since many start working in the middle of the calendar year. During the economic downturn, not many firms were willing to guarantee those hires a year-end bonus.
This year, the school's M.B.A.s have been seeing median base salaries in investment banking close to $95,000 this year, up from the average of about $85,000 for the past three years.
Meanwhile, sign-on bonuses are running closer to $25,000 to $30,000 for the current M.B.A. class, up from about $20,000 last year, she notes.
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