Why Not Go Directly to Business School After College?

Would you pay Farmer Ted $125,000 per year?
Bloomberg Businessweek recently highlighted some research that suggests that business schools are misguided in preferring (or even requiring) applicants with at least several years of work experience. This admissions preference, the researchers claim, actually does MBAs a disservice.

The argument goes something like this: Since business school significantly boosts most graduates’ pay (comparing their pre- and post-business school bae salaries), then delaying business school will only negatively impact one’s lifetime earnings. If business school helps someone earn more money, then young professionals should attend business school as early in their careers as possible. Several more years of MBA-grade pay will only help make someone better off in the long run.

On the surface, this certainly appears to be true. Heck, ask any five-year-old if they want a dollar now or next week, and they’ll show you that they understand the the time value of money. But one key assumption in all of this is that all MBA grads are the same coming out of top MBA programs, no matter what they did, or how long they did it, before entering business school. Anyone who has gone through job recruiting in business school can tell you that this is not the case. Even Harvard and Stanford grads can have a hard time landing jobs if they lack the polish that recruiters look for.

As the Bloomberg Businessweek article states, job recruiters want grads with a bit of experience (“and are willing to pay for it,” the article adds). The customer is always right, and for business schools, the customers are the companies that come and hire their graduates. The last thing a recruiter wants is an MBA grad who has barely done anything in his life but expects to be paid as much as his fellow grads who are a few years older and already have built impressive careers. The latter is a sure bet… Which one do you think recruiters are going to bet on?

This doesn’t seem to be a big problem yet, since some business schools are moving toward recruiting and accepting younger applicants, and (as far as we know) not many employers are squawking yet. But, we do think that producing more seasoned grads could become a competitive advantage for some top programs if others move toward making their classes younger. Think of the pitch: “Why hire a 24-year-old who’s done nothing for $125,000 a year, when you can hire a 28-year-old who’s already led teams and driven projects, for the same price?”

We also wonder if there are other, long-term effects of going to business school too early. The assumption embedded in the research is that a younger person will get the same salary as his more experienced peers when he earns his MBA, and that his earnings will grow at the same rate over the rest of his career. We don’t know that the latter assumption is wrong, but it’s not hard to imagine a scenario in which someone who’s not quite ready for business school ends up stunting his own career growth by going too soon. Could that “stunting effect” add up to a six-figure disadvantage over the next 40 year’s of someone’s career? It’s not hard to imagine such a scenario playing out.

We’re not dogmatic about applicants needing several years of full-time work experience before applying to business school. However, all things being equal, we still firmly believe that you will get more out of business school once you get at least a bit of a taste of how the real world works. You only get one chance to earn a top-tier MBA. You might be feeling impatient and you may want to get on with it, but do it right!

Do you plan on applying to business school this year? Call us at (800) 925-7737 and speak with an admissions expert. And, be sure to find us on Facebook and Google+, and follow us on Twitter!