Are MBAs Essential in Consulting, Finance, and VC/PE?

Does an MBA Open Doors in High-Stakes Industries?

• How important and relevant is an MBA in industries where there are typically more employees holding it—consulting, finance, and VC/PE? This question appeared in one of our discussions among the Aura team, and we decided to give it a closer look.
  

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In this article, we examined employees who have an MBA in the above-mentioned industries and compared them to the job market overall and to each other.

Read along to find out how MBAs perform in these industries — their share in each sector, top MBA schools for employees, and how they are distributed in seniority.

The Master of Business Administration (MBA) has long been regarded as a gateway to career advancement and a catalyst for honing crucial business skills. It is typically associated with strategic thinking, analytical prowess, and leadership capabilities, which are sought after across various industries. In today's dynamic job market, pursuing an MBA presents an opportunity for professional growth and network expansion.

As of recent data available through Aura, the share of employees with MBAs in various sectors is around ~2%, showcasing their relevance and potential impact on career trajectories. However, the concentrations of MBA holders differ significantly among industries, revealing intriguing insights into sectors' unique demands and preferences. In this article, we will look at industries where the share of MBA holders is the highest – management consulting, banking and finance, and venture capital / private equity (VC/PE).

The observed percentages of employees holding MBAs in these industries are striking: 8.3% in management consulting, 7.3% in banking and finance, and notably higher at 13.7% in VC/PE. This variance suggests industry-specific demands for strategic agility and analytical adeptness, where varied percentages of MBA holders could be attributed to the need for particular skill sets and expertise specific to each sector.

Furthermore, the prominence of certain MBA schools in these industries might reflect historical hiring trends, specialized programs, or alumni networks aligning closely with industry demands. Delving deeper into the seniority distribution among MBA holders within these industries unveils intriguing trends and preferences in career trajectories.

Examining the top 10 MBA schools for each industry provides compelling insights:

• Management consulting:
  Notable mentions include FGV EAESP, INSEAD, and NWU Kellogg, indicating preferences shaped by historical hiring trends or program specialties tailored to consulting needs — it is worth noting that some entries in the list are not typically high-ranking (e.g., FGV EAESP).

• Banking and finance:
  ‍NYU Stern, University of Phoenix, and Harvard prominently feature, showcasing industry interest in diverse educational backgrounds and specialized skill sets.

• Venture Capital / Private Equity:
  Harvard, Wharton, and Stanford stand out, emphasizing established institutions with programs catering to the complexities of VC/PE endeavors.

Looking at the seniority distribution of MBAs across these industries yields some thought-provoking observations:

• Junior level:
  VC/PE has a lower MBA representation, at 23.7%, compared with banking and finance (40.0%) and management consulting (34.4%). This divergence could signal the sector's inclination towards practical experience or specialized knowledge at the junior level.

• Mid-Level Management:
  While Managers with an MBA surpass non-MBAs in banking and finance (25.7% vs. 21.9%), VC/PE experiences a substantial drop (6.1% MBAs vs. 11.4% non-MBAs). Similar to junior-level employees, this might reflect the industry's preference for hands-on experience over formal education at this career stage.

• Director / VP Positions:
  All three industries boast a higher MBA presence – management consulting at 17.8%, banking and finance at 22.9% and VC/PE at 4%, possibly indicating the value placed on advanced managerial skills imparted through MBA programs.

• C-Suite:
  While an MBA correlates with higher positions in VC/PE (striking 45.9%), the proportion in management consulting (20.3%) and banking and finance (16.9%) underscores the nature of ascending to executive roles, which often requires a blend of education, experience and leadership acumen.

• The observed correlation between holding an MBA and advancement to higher roles emphasizes the potential benefits of advanced education. However, it's crucial to note that various factors contribute to career progression, and an MBA is not the sole determinant of success.

• The diverse career paths observed, particularly in VC/PE, might result from industry-specific requirements, leadership styles, or an evolving emphasis on diverse skill sets at different career stages.

• The presence of graduates from diverse educational backgrounds in top MBA schools highlights these industries' propensity to embrace varied perspectives and skill sets, fostering environments conducive to innovation and adaptability.

To summarize, understanding the connection between qualifications gained from achieving an MBA and career trajectories within management consulting, banking and finance, and VC/PE provides food for thought for prospective MBA candidates.

While an MBA can provide valuable skills and networking, its impact on individual career paths within these sectors remains a complex interplay of education, hands-on experience, and industry demands. Aspiring MBA candidates can utilize these insights as a complementary guide, aligning them with their personal aspirations and career objectives.

Want to explore workforce insights that matter? Request a demo of Aura to uncover trends in education, seniority, and hiring practices tailored to your needs.

Abylay Jetmekov
‍Product Manager, Aura