How relevant is an MBA in the Australian job market?

In speaking to recruiters, employers and students, one thing is clear - the MBA market in Australia is different to its counterparts in other countries.

What's the difference?

The job market and recruiters in Australia give preference to work experience in a specific sector or industry. If you are a procurement analyst in the education sector, chances are that you will remain in procurement within the education sector for a long time. The reason is that it's very difficult to shift sectors in Australia once you develop experience in a particular sector.

During periods of uncertain financial times such as now, this is even more the case. Recruiters and employers are choosy in their selection process. Direct industry experience is a minimum requirement. You may be the best procurement analyst, but they wouldn't touch your CV because you came from a different sector. This is the reality now in the Australian job market.

In Australia, there is also a great focus on specialisation. If you are a procurement analyst, then you are 'expected' to specialise in the field of procurement. This may mean getting certifications or doing additional study which is relevant to your specialist area. Doing an MBA may be a 'good to have' on your CV, but would not add any extra points to your CV unless you did subjects relevant to your area of specialisation (for example contract management or supply chain management).

Another difference between Australia and other countries is that in Australia, people do an MBA after having several years of work experience. Many of them are sponsored by work so that they can come back and take up a more senior role within their department. Some of them do an MBA to get into a senior manager level within their industry. Few of them do an MBA to change their career (for example get into consulting or start a new business).

However this is not the case for international students. Most international students come to Australia to do an MBA after two years in the workforce. Why two years - because this is the minimum entry requirement set by business schools in Australia. We will find very few Australians who do an MBA after two years in the work force. This in itself creates a difference. Many international students struggle to get a managerial role after their MBA. Most end up getting jobs in a field where they had previous experience (for example software programming) or end up doing junior analyst roles which do not require an MBA in the first place. Many end up going back to their countries.

In the US or India, for example, it is normal for MBA candidates from top business schools to end up with 2-3 job offers at the senior management level. However this is not the case in Australia. Campus placements are rare in Australian B-schools and only the top schools such as Melbourne Business School or AGSM have campus placements. And even there many candidates do not end up with any job offers on campus simply because there are not enough employers recruiting on campus. One reason for this could be the size of the Australian job market compared to the number of MBAs who are graduating each year.

Why is there a difference?

Here are some factors that need to be considered:

1. Quality of MBA programs in Australia compared to those in the US or the UK?
2. Relevance of MBA programs to the requirements of the Australian employer / workplace?
3. Entry requirements of MBA programs in Australia and its relevance to the Australian job market?
4. The number of MBA programs in Australia and the number of MBA candidates graduating each year?
5. Attitude towards MBA programs by employers and recruitment agents?
6. Enlightening employers and recruitment agents about the skills an MBA can bring to the work force?

What can we do about this?

Well in simple terms, nothing much! But for a start, raising awareness through such blogs, forums and social media may go a long way in improving the relevance of the MBA degree to the Australian work place.

Specialist managers will always be that - specialists. They will be good at their area of expertise but for managing and leading, we need people who are beyond specialists. We need managers and leaders who can think outside the square and bring different perspectives to a particular problem. An MBA changes the way specialists think - it brings fresh perspective and different lines of thought.

I strongly recommend that an independent review be conducted on the MBA degree in Australia. People are paying close to AUD 70K to do an MBA in Australia. But if they do not have career prospects after shelling out this much money, I think this is a waste of hard earned money. At the end of the day an MBA should not just be a stamp on your CV, it should be a passport to higher future earnings and a successful career. But the reality for Australian MBAs is anything but that.

Who could do this review - an Australian MBA, definitely, who has a good understanding of the Australian job market and the university sector.