Mba Salary and Recruitment Trends 2005

TopMBA.
com International MBA

Recruitment and Salary Report
QS Research 1990 - 2005
Nunzio Quacquarelli MA Cambridge, MBA Wharton

Monisha Saldanha MBA Harvard
Copyright © QS Research 2005 The world’s leading network for top careers and education
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Any excerpts must be sourced: QS TopMBA.com International Recruiter Survey 2005.

All charts must be sourced: QS TopMBA.com International Recruiter Survey 2005.
The world’s leading network for top careers and education Copyright © QS Research 2005
Contents
1. Introduction 2
2. Summary of Findings 3
3. Methodology and Credentials 3
4. Companies Surveyed 4
5. Background to Trends - the upswing gathers pace 6
6. MBA Recruitment Trends 2005 7

6.1 Demand for MBAs 7
6.2 Demand for MBAs by Region 8
6.3 Demand for MBAs by Sector 10
6.3.1 Consulting 10
6.3.2 Banking and Financial Services 10
6.3.3 Technology 11
6.3.4 General Industry 11
6.3.5 Pharmaceuticals and Healthcare 12
6.3.6 Small Enterprises Entrepreneurship 12
6.4 Functional Roles 12
6.5 Experience Levels 13
6.6 Skills 14
7. MBA Salaries and Compensation 15

7.1 Global Trends 15
7.2 Salary and Bonus Combined 16
7.3 Bonuses 17
7.4 Trends by Region 17
7.5 Strategies for MBA Salary Analysis 19
7.6 Regional 20
7.6.1 United States and Europe 20
7.6.2 Asia 21
7.6.3 Latin America 22
8. Appendix 24
Copyright © QS Research 2005 The world’s leading network for top careers and education
1. Introduction
Since 1990, QS Research, in collaboration with TopMBA.com, has conducted an annual

survey of MBA employers worldwide to determine trends in international salaries and
recruitment. The TopMBA.com International Recruiter Survey 2005 is the most extensive ever
and presents an unrivalled overview of the world MBA recruitment market. Complete
responses were received from 505 companies (301) (comparative figures for 2004 are shown
in brackets throughout the report) in 30 (20) different countries, a 68% increase in
responses. This represents approximately twice the response level of the Business Week
Employer MBA survey and includes five times the number of non-US respondents in any
other MBA recruitment survey.
Who will be interested in the survey?
This research will be of interest to all who follow the international MBA and recruitment
market. It will help three groups in particular make informed strategic decisions:
1. Companies that recruit MBAs and recruitment consultants
National and international recruiters will find the survey useful in managing human
resource policies, such as whether to determine salaries globally or locally, and to
benchmark their salaries against peer institutions.
2. Business school administrators and career services worldwide
MBA programme administrators and career services will find the survey invaluable for
providing guidance to students and managing the relationships with recruiters.
3. Current and future MBA graduates
MBAs can use the research to determine which industries and geographies to pursue in their
job search, and to help negotiate an optimum compensation package.
2 The world’s leading network for top careers and education Copyright © QS Research 2005
2. Summary of Findings
For the past two years, recruiters have foreseen a rebound in the demand for MBA
graduates and salary levels. The TopMBA.com International Recruiter Survey 2005 confirms
this trend. Recruiters are now predicting that MBA demand will return to pre-recession
levels by next year, and will carry on growing thereafter.
The number of recruiters taking part in the survey has risen to 505 (301), reflecting an
expansion in interest and demand for MBAs. There is also a growth in the numbers of
vacancies per employer.
The TopMBA.com Index of MBA Recruiting shows an overall 20% (15%) increase in demand
for MBAs in 2005, with the consulting sector reporting a massive 35% (15%) increase,
financial services 20% (10%), general industry 17% (12%), and technology 18% (5%).
In the previous eight years, average salaries for graduating MBAs increased by 27%, but
they have increased by 12% in the last two years alone. This matches the pre-downturn
levels of 2001 with a US-European average of US$84,500 (US$82,000). This increase reflects a
high level of optimism amongst MBA recruiters and increased competition for the top
talent.
Bonuses for 2005 have increased substantially. The average reported bonus is a sizeable
US$27,000 (US$19,000). Financial services firms are reporting a massive average bonus of
US$40,500 with investment banks, in particular, reporting bonuses of up to US$100,000 for
first year MBAs. While other sectors will find it hard to compete with these figures, banking
bonuses do tend to be much more volatile than those in other sectors.
3. Methodology and Credentials
The TopMBA.com International MBA Recruitment and Salary Survey collects primary data on
the state of the recruitment market and predictions of future trends from recruiters in
industry, consulting, financial services, and technology. The data includes specific analyses by
sector, geography, and year. Time trend analysis and sector/regional variations have been
incorporated into this final report. Unlike many surveys, QS does not rely on MBA graduates
to report their earnings, but obtains the information from the employers who pay them.
QS further differentiates its research by the objectivity of its position as a third party
operating between recruiters and business schools, by virtue of the long established contacts
with recruiters who are willing to share information with QS, and by the bank of data on
MBA recruitment and remuneration built up over the past 15 years, which allows
meaningful trends to be identified over time.
Copyright © QS Research 2005 The world’s leading network for top careers and education 3
4. Companies Surveyed
Responses were received from across the globe. 43% of respondents were based in Europe
(51%), 41% in the USA (31%), 4% in Latin America (8%) and 10% in Asia Pacific (10%).
Regional Distribution of Responding Recruiters 2005
43% Western Europe

41%
Latin America
Eastern Europe
US & Canada
Asia Pacific
4%
2% 10%
Chart 1 Source: QS TopMBA.com International Recruiter Survey 2005
The spread of recruiters spans a wide spectrum of industries, reflecting the global range of
companies that hire MBAs. Financial services and consulting make up the largest source of
respondents, followed by healthcare, technology and consumer goods. Respondents from
the recruitment consulting industry are kept separate – although they have a bias towards
financial services and consulting recruitment.
Recruiter Response by Industry 2005

80
70
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The 505 national and international companies that responded to the survey are guaranteed
complete confidentiality for their individual responses. Chart 3 gives a snapshot of some of
the organisations that took part in the survey across the world. A fuller list can be found in
the Appendix at the end of the report.
Consulting Financial Services Industry Technology
Asia McKinsey Citibank Toshiba Cisco

Copernicus (Jap) Oppenheimer Johnson & Johnson Motorola
PA Consulting HSBC CLP Singtel
Europe AT Kearney Barclays Capital Whirlpool Vodaphone

Accenture Lehman Ford Motor Co. Philips
BCG JP Morgan Bosch BT
Latin America Bain & Co. BankBostonChile Mattel Ingenium

Roland Berger Merrill Lynch Cemex Pfizer
AMBC BBVA Sabritas Procura Digital
USA IBM Consulting Morgan Stanley Sony Microsoft

Mercer Fidelity American Airlines Dell
Bain Goldman Sachs Corning Hewlett-Packard
5. Background to Trends - the upswing gathers pace
A growing number of companies all over the world now see a top MBA as an essential
management entry-level qualification. Without an MBA, it is almost impossible to become
an analyst at a leading investment bank, or a senior consultant at a top consulting firm. In
recent years, it has become more common for business development managers and
technology managers also to study for an MBA, to help them take the next step in their
career.
From 1994-2001, worldwide demand for MBAs grew at an average of 15% CAGR. This
growth was spread across all the major continents and benefited graduates from all of the
world’s top 100 business schools. Recession in the USA, however, and slow growth in major
economies as far apart as Germany and Japan, took their toll from 2002-2004 and demand
for MBAs fell by around 20% from 2000-2003. In this period, on-campus company visits fell
significantly and many MBA students had to resort to off-campus job searches and
networking amongst alumni.
However, www.global-workplace.com, a jobs site which is operated by QS on behalf of many

of the world’s top business schools, saw over 14,000 (7,800) new MBA jobs added to the site
during 2004. According to Adrian Barrett of Global-Workplace, “...the big demand for MBAs
is again coming from the service sector – banks and consultancies – including many smaller
organisations. MBA alumni, who are now in a position of hiring responsibility, tend to
return to their school to pick up new talent.” The growing MBA alumni pool is increasingly
being activated by career services to create jobs in all sectors.
Anecdotal evidence of the upswing is found everywhere. Kim Keating of Tuck Business
School, USA, sees the MBA job market heating up to levels not seen since 2001. “By April
2005, 80% of our class had at least one full time offer. We expect all the class to have offers
by graduation.”
Graham Hastie of London Business School concurs: “The MBA job market has transformed
over the last two years. In April 2003 only 30% of our students had a full-time job offer. By
April 2004, over 50% had offers. This year 70% - 80% have offers. We expect most students
to have offers at graduation. The prospects are outstanding next year’s class.” The survey
results confirm all these observations.
6. MBA Recruitment Trends 2005
6.1 Demand for MBAs
In 2005, 50% (62%) of employers expect to increase MBA hiring in the next twelve months,
43% (28%) expect MBA hiring to be at the same level as in 2004, and a mere 7% (10%)
expect a decrease in MBA hiring in 2005.
Chart 4 shows the trend in MBA hiring worldwide, by sector. Consulting and financial
services, especially investment banking, have rebounded particularly sharply. These two
sectors will account for 50% of MBA hires at most business schools and the rate of growth
in demand has doubled since 2004.
The growth in demand in consulting has particularly surged in 2005, with a reported 35%
(15%) increase in demand. Financial services have taken slightly longer to recover from the
millennium recession but have still increased demand in 2005 by 20% (10%).
The technology sector was worst hit during the recession and only in 2005 is it finally
showing signs of recovery with an 18% (5%) increase in demand.
For the purpose of simplification, this survey groups together as ‘general industry’
manufacturing, logistics, chemicals, automotive, FMCG etc. This sector saw the lowest drop
in demand for MBAs during the recession, with many companies using the downturn in the
service sector to pick up talent. During the upturn it is continuing to show a steady increase
in demand of 14% (12%).
Index of MBA Recruitment 1990-2007

5
4
Consulting
Index 1990=1
Finance
3
Industry
Technology
2
0
90
91
92
93
19 4
95
96
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9
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20
20
20
Recruiters are currently optimistic that this cyclical upswing will be sustained in the medium
term. All sectors are predicting a continued growth in demand for MBAs. The financial
services sector is particularly optimistic, predicting the first rise in demand above the levels
of 2000. The consulting sector remains the most aggressive, predicting continued growth in
excess of 15% per annum in 2006 and 2007.
The renewed demand by employers is not yet being reflected in applications to do an MBA.
Since 2003 there has been a 20% decline in applications. It appears that many young
professionals, seeking career progression within their function or industry, are reluctant to
take a risk and leave to take an MBA, in case they miss out during their time away. This
trend has been particularly evident in the US, and in China, where MBA applications have
fallen by 50% during a period of economic boom. These individuals seem to be waiting a
few more years than average and are fuelling the demand for the more expensive Executive
MBAs, which allow them to carry on working during their studies. The result is less
competition to gain entry to the best schools than three years ago, in spite of a much more
attractive job market.
However, in most countries around the world, we see a rise in demand for MBA places
among people who seek a career change or who wish to start their own business. These
young professionals are trying to time their MBA so that they graduate into a ‘hot’ job
market, making 2006 start dates look very attractive.
6.2 Demand for MBAs by Region
As Western economies recover, Europe and the US are set to yield the greatest increase in
MBA opportunities. Chart 5 shows the growth in number of jobs according to the location
of the headquarters of the responding employer. Traditional MBA employers in the US and
Europe are fuelling the growth in demand. Local companies in Asia and Latin America still
account for relatively few MBA opportunities and recruiters in such organisations have no
immediate plans for a sharp increase in MBA hiring.
Trend in Employment Opportunities by Region 2004 - 2006

2000
2004
2005
1500
MBA Demand
2006
1000
500
0
Asia Western Eastern North Latin
Pacific Europe Europe America America
However, this data potentially underestimates the actual number of opportunities in certain
regions. For example, many MBAs in Asia, Latin America and Eastern Europe are hired
through head offices in the US or Western Europe. Chart 6 reveals that 49% of recruiters in
North America have some responsibility for recruiting in Europe, Asia or Latin America.
North American Recruiter Responsibilty by Region in 2005
17%
16% Europe
Latin America
51%
Asia Pacific
US & Canada
16%
Similarly, as shown in Chart 7, 61% of MBA recruiters in Europe have responsibility for hiring
outside their home country, with 13% having responsibility for hiring into North America,
and 11% Asia and 11% Latin America.
European Recruiter Responsibility by Region in 2005
13% Asia Pacific/ROW

11%
US & Canada
Latin America
39% 11%
Europe
National
26%
The predominance of MBA recruiter headquarters in the US and Western Europe sheds light
on the continued popularity of US and European business schools. International MBAs at
these schools benefit from proximity to these headquarters and being able to meet such
recruiters on campus before graduation.
6.3 Demand for MBAs by Sector
6.3.1 Consulting
Top 10 Consulting recruiters of MBAs in 2005:

Accenture, AT Kearney, Bain & Co, Boston Consulting Group, Booz Allen Hamilton,
Diamond Cluster, IBM Consulting, McKinsey & Co, Mercer Management Consulting,
Roland Berger & Partners.
(Diamond Cluster is new in 2005, replacing Siemens Management Consulting, which leaves the top
10.)
The consulting market is re-entering a boom phase. Overcapacity in 2001 saw MBA hiring
cut back. A 35% (15%) increase in demand for MBAs in 2005 places demand back to 2001
levels and, based on current forecasts, demand will continue to grow. Strategy consulting
firms are strongly back in the market for the 2005 MBA class. All the leading firms have
returned to aggressive MBA hiring.
There are also a growing number of small specialist consultancies looking to hire MBAs.
Many such firms are using search agencies, or web services such as
www.global-workplace.com, rather than visiting schools. There is also a growth in specialist
consultancies, for example ZS Associates, with a focus on sales and marketing.
The growing number of corporate consultancies are experiencing strong growth in MBA
hiring. For example, Siemens Management Consulting specialises in technology and business
outsourcing. Dell has recently changed its name from Dell Computers, reflecting the
intention to build up its business consulting division helping Dell hardware customers to
plan their IT requirements. Such strategies follow in the footsteps of IBM, which is, today,
the world’s largest provider of consultancy services, by revenue and employment numbers.
The big professional services firms have yet to resume major MBA hiring, but may still create
a further stimulus in demand by 2006. Those that have been absorbed into other
enterprises, such as Atos Consulting (acquired by KPMG Consulting), PwC Consulting (now
part of IBM), Cap Gemini Ernst & Young, still feel the rationalisation implicit in such big
integration exercises.
6.3.2 Banking and Financial Services
Top 10 Financial Services recruiters of MBAs in 2005

American Express, Citibank, Deutsche Bank, Fidelity International, GE Commercial Finance &
GE Capital, Goldman Sachs, JP Morgan, Lehman Brothers, Merrill Lynch, Morgan Stanley.
(Unchanged from 2004, but all have significantly increased hiring numbers.)
Almost all investment banks actively recruit MBAs. This demand collapsed during 2001-2003.
Goldman Sachs, Morgan Stanley and others cut MBA hiring by up to 80% in some offices.
2005 shows a completely different environment with demand increasing by 20% (10%). All
the big investment banks are back on campus competing for talent, evidence of which can
be found in this survey in the section relating to salaries. Mergers and Acquisitions
departments are returning to strength and hiring is becoming a priority.
Many divisions are prospering, such as derivatives, prime brokerage, sales and trading of
debt and equities, structured finance, public sector and private sector corporate finance,
property, private equity and wealth management. Financial services’ MBA hiring is no longer
restricted to banks. GE Capital is now one of the biggest recruiters of MBAs worldwide.
American Express is also emerging as a major player.
Insurance hires MBAs steadily at a modest level and has picked up noticeably in 2005. In the
US there are a number of insurance companies that recruit 10 or more MBAs each year such
as AIG, Travellers (part of Citigroup), CIGNA, and Liberty Mutual.
6.3.3 Technology
Top 10 Technology MBA recruiters in 2005

Avaya Communications*, British Telecom, Dell, Hewlett-Packard, IBM, Intel, Microsoft,
Philips, Samsung*, Vodafone.
* = new in 2005. (Cisco, Sprint, included in 2004.)
Recruitment of MBAs into technology companies has finally bounced back, reporting an
increase of 18% (5%). Dell has reported the largest increase in MBA hiring of any company.
Telecommunications companies such as British Telecom and Vodafone are very active. Some
software companies, like Microsoft for example, have increased their intake. Hardware
companies such as Hewlett-Packard and Dell are amongst the most active recruiters at
present, but we expect some Chinese companies to appear strongly in the research in the
future. We were unable to obtain significant data from Asian technology recruiters in 2005,
but reports suggest that hiring in China, Taiwan and Korea is extremely active. Only
Samsung has confirmed hiring numbers, which exceed over 100 people. Recruiters are
predicting several years of strong growth in demand.
6.3.4 General Industry
Top 10 Industrial MBA Recruiters in 2005

Coca-Cola*, Diageo*, Ford, General Electric, General Motors, Johnson & Johnson Medical
Equipment, Philip Morris*, Procter & Gamble, Siemens, Unilever (including Lever Bros USA).
* = new in 2005. (Eli Lilly, GlaxoSmithKline, Pfizer, included in 2004 – pharmaceuticals
surveyed separately in 2005.)
This broad grouping of industries covers, aerospace, automotives, chemicals, logistics,

manufacturing, steel and, for the purpose of this report, consumer goods and retail. Each
industry reveals individual trends, but a common theme has been a steady increase in MBA
hiring for the last three years with the 2005 survey reporting an increase in hiring of 17%
(12%). The increasing globalisation of international trade, growing inter-dependence of
common markets and increased international competition has fuelled the interest in MBAs
across the sector.
In particular, those organisations that have fully embraced globalisation understand that
MBAs represent an essential pool of international managers who are capable of working in
diverse cultures and business situations. A sizeable number of MBAs who do find roles in the
industrial sector will do so with companies such as General Electric, Ford and General Motors
where specific MBA induction programmes have been the norm for more than twenty years.
Internationally minded European companies like Siemens and DaimlerChrysler have
established MBA entry programmes.
Consumer goods companies have been committed to MBA hiring in the US for many years.
Lever Brothers traditionally hire 50+ MBAs in the US and many fewer in Europe. This
situation is changing. As more and more people graduate with MBAs, they are penetrating
consumer goods companies around the world in ever increasing numbers. It is now common
for local operations of such companies as Diageo, Procter & Gamble, BAT and Coca-Cola to
hire MBAs, in addition to the head offices of those companies.
For local industrial companies, the high level of multinational salaries remains a barrier and
can discourage MBAs from pursuing local opportunities that may bring them rewards in the
longer term. Manel Gasca of Rittal Disprel, a consumer products/retail company based in
Spain, has the following advice for MBAs: “Too much relevance is placed on salary straight
after an MBA. Since the year I graduated I had to learn that the true value of my MBA was
the knowledge I acquired and not the job I got straight after graduation. MBA recruitment
is very sensitive to economic conditions and we should not value studying an MBA by the
salary we obtain after graduation.”
6.3.5 Pharmaceuticals and Healthcare
Top 10 Healthcare MBA Recruiters in 2005

AstraZeneca, Eli Lilly, GlaxoSmithKline, Guidant, Johnson & Johnson, Medtronic, Merck,
Novartis, Pfizer, Schering-Plough.
Pharmaceutical companies have always been very active MBA recruiters and pay the best
salaries after consulting and investment banking. They also offer attractive benefits and
international mobility. They have remained committed to MBAs throughout the last decade
and growth in recruitment numbers is steady rather than spectacular.
6.3.6 Small Enterprises and Entrepreneurship
The Internet revolution has given many MBAs the confidence to start their own business on
graduation. For the first time ever, some schools are reporting that 10% or more have
chosen to do so. Technology has reduced the cost of starting a business, even for risk-averse
MBAs. At US schools, the percentage of class starting their own business is consistently less
than 5%, whereas many European schools regularly exceed this level. Schools reporting
particularly high levels of students starting their own businesses include: The Judge Institute,
University of Cambridge; EM Lyon; IE Instituto de Empresa; Manchester Business School;
Tanaka Business School, Imperial College London.
A growing number of MBAs are interested in working for Small Multinational Enterprises,
start-ups or boutique consultancies. Many such firms are owned or managed by MBAs who
want to hire dynamic business developers, marketing specialists, salesmen, financial ‘wizards’
and analysts: all classic MBA roles.
6.4 Functional Roles
Chart 8 reveals that marketing 19% (15%) is still ahead of finance 17% (12%) as the role
most frequently offered to MBAs across our sample of 505 MBA recruiters. Consulting
accounts for 17% (10%) of all opportunities. The e-commerce function, a relatively new role,
has fallen dramatically in popularity since 2001 when it represented more than 10% of MBA
roles. Today it accounts for less than 3%. Roles offered reflect a return to the basics of
management – away from e-commerce and towards marketing, strategic planning, sales,
and finance.
Functional Roles Offered to MBAs in 2005
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6.5 Experience Levels

MBA recruiters consistently show a strong bias towards candidates in the ranges of 1 - 4 and
4 - 8 years experience but there is a trend toward recruiting younger people. Fresh
graduates taking an MBA are targeted by an increased 8% (4%), reflecting perhaps a
growing scarcity of quality MBAs with sufficient experience, while MBAs with over 8 years
experience are now sought by only 2% (5%) of respondents (Chart 9). This does not imply
that either group is not in demand, but that they fall outside the needs of mainstream
international MBA recruiters. Inexperienced candidates typically accept lower paid graduate
level positions and experienced professionals are more likely to use a search company to
identify suitable opportunities.
Preferred Levels of Experience for MBAs

60 2005
50 2004
40
% 30
20
10
0
<1 Year 1-4 Years 4-8 Years >8 Years
6.6 Skills
Wise MBAs will seek opportunities to develop skills that are important to recruiters.
Chart 10 demonstrates how “soft skills” such as interpersonal, strategic thinking, and
leadership are more important than finance abilities, academic success, and knowledge of IT.
Choosing opportunities to demonstrate mastery of these skills – perhaps through club or
project leadership, for example, – will help MBAs to differentiate themselves in the
recruitment process.
Key MBA Skills: Importance versus Satisfaction (as ranked by recruiters)
3.0 Satisfaction Importance
2.5
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1.5
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7. MBA Salaries and Compensation
7.1 Global Trends in 2005

MBA salaries are on the increase in almost every country in the world. As demand for MBAs
surges in consulting and financial services, recruiters must compete on salary to secure their
preferred candidates. In the last two years companies have reported a 12% (9%) increase in
average MBA salaries - matching the levels of 2001(Chart 11). This increase reflects a high
level of optimism and increased competition for top talent.
The levels of MBA salaries tend to be cyclical and reflect global economic trends. The 1990s
was a decade of uninterrupted economic growth resulting in ever-increasing salary and
bonus packages. A growing pool of MBA graduates was eagerly recruited by businesses
worldwide. Despite the dot.com disruptions in the US market in 2000, the momentum
behind this trend fuelled increasing salaries until 2001. This trend reversed in 2002, however,
and salaries fell almost to the 1998 pre-dot.com boom level.
Average Salaries in US & Europe 1996 - 2005 (US$)
100000
80000
US$ 60000
40000
20000
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Last year, Mike Holmes of www.global-workplace.com predicted that 2004 would be the
starting point of another upswing in the MBA hiring cycle. “In 2005, we find that demand in
the non-service sector has remained robust throughout the last five years. With so many
service companies re-entering the market and hiring more aggressively, there will continue
to be some upward pressure on salaries.”
In 2005, average consulting base salaries in the US and Europe at US$94,000 have, once
again, overtaken those in financial services at US$87,000. After many years of the base
salaries in consulting surpassing those in financial services, financial services had edged
ahead in 2003 and again in 2004. One US consulting firm has reported a record average
salary offer of US$117,500 for fresh MBA hires. These salaries look unlikely to slacken off,
given the forecast increases in demand for MBAs by consultants over the next few years.
Chart 12 tracks MBA salaries in the US and Europe from 1999 to 2005 by key MBA recruiting
sectors. Global trends also show a steady increase in salaries in consulting, finance,
technology and general industry, since 1993.
MBA Salaries in US & Europe By Industry 1996 - 2005 (US$)
100000
Consulting
Finance
Industry
80000 Technology
US$
60000
40000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
7.2 Salary and Bonus Combined

When comparing compensation levels, it is important to consider not just the base salary,
but also the likely total earned in one year, including bonuses. Although, as in the 1990s,
financial services salaries are typically behind those in consulting, the larger bonuses
payable, by investment banks in particular, ensure that they offer the greatest overall
compensation for the first year out of business school. There is significant salary variation
across sectors. For example, consumer products and retail jobs pay almost US$30,000 less
than financial services. Chart 13 presents average salaries and bonuses reported by
employers, with each industry sector disaggregated to provide greater insight. Different
industries have their own methods of providing compensation. Some industries offer a
higher base salary, while others offer a high year-end bonus. When deciding between jobs,
candidates are recommended to assess their own risk profile and level of financial flexibility.
Average MBA Earnings by Sector 2005 - Salaries & Bonuses in

W. Europe & US (US$)
150000 Bonuses Salaries
120000
90000
US$
60000
30000
0
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7.3 Bonuses
Bonuses for 2005 have increased substantially. The average reported bonus is a sizeable
US$26,949 (US$19,183). Financial services firms are reporting a massive average bonus of
US$40,500 with investment banks, in particular, reporting bonuses of up to US$100,000 for
first year MBAs. While other sectors will find it hard to compete with these figures, banking
bonuses do tend to be much more volatile than those in other sectors.
It is important for candidates to understand the fiscal status of their bonus. Maximizing
after-tax bonus value should be prioritised: in some US States, they are taxed at nearly 50%.
In the UK, relocation expenses and tuition reimbursements can be claimed tax-free. In such
cases the cost is the same for the recruiter, but the benefit far greater for the candidate.
Furthermore, an up-front start bonus carries greater value than a year-end or performance
bonus. Candidates can compare their offers with their peers to ensure they are getting a
competitive offer and communicate this benchmarking to the recruiter. In at least one case,
a top-tier consulting firm has increased its offer for the entire entering MBA class in order to
match competitors. No MBA graduate can count on the promise of a performance bonus,
making financial planning, including meeting minimum loan repayments, more difficult.
Performance bonuses, whether tied to individual, team or company performance, are a
means for an employer to introduce variable compensation and to ensure they do not make
financial promises they may not be able to keep.
7.4 Trends by Region

North America and Western Europe have very similar average MBA salary levels. They are
lower in Latin America, Asia and Eastern Europe, reflecting weak exchange rates and the
lower status of those regions for business development.
MBA Salaries By Region 2005 (US$)

100000
85056 84525
75250
80000
US$ 60000 53125

45962
39375
40000
20000
0 W.Europe E.Europe Asia Pacific Latin America Canada United States
Nevertheless, average salaries have risen across the board, globally, and some level of
convergence is apparent. Multinational companies co-ordinate recruitment on a global level,
and do not want to drive top candidates away from key geographies because of a salary
differential. As international companies set up operations in emerging markets, they are
increasingly willing to pay more for MBAs, who they see as critical for building a foothold in
each region. Over time, it is likely that differentials with local companies will disappear as
they respond by trying to attract talent for equivalent positions with more competitive
salaries. At present, as shown in Chart 15, the differential between local and international
salaries is greatest in Eastern Europe and Asia.
MBA Salaries by Region Comparing Local & International Employers (US$)
International Employers
Local Employers
100000
80000
US$
60000
40000
20000
0
W.Europe E.Europe Asia Pacific Latin America Canada United States
There is a significant differential in salaries across regions. Asian salaries are 14% (8.7%)
lower than those in the US, while Latin America typically offers salaries an unchanged 34%
(34%) lower than the US. The time trend information in Chart 16 demonstrates that there is
an overall trend towards convergence in salaries.
MBA Salaries Across Regions 1996 - 2005 (US$)
100000
80000
US$
60000
40000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
USA 64349 65878 68109 75231 81125 84321 71512 76953 85348 85933
Europe 65862 67477 69109 72384 75231 80177 76324 75366 81214 84000
Asia 50618 52875 57300 61500 65500 68500 67500 70182 71732 73100
LatinAm 49375 51250 55250 59290 50625 52538 59750 41271 48070 57067

Note: Asian salaries exclude China, India and Thailand companies that offer much lower MBA salaries when converted to US dollars.
7.5 Strategies for MBA Salary Analysis

MBA graduates are known for their analytical ability. In negotiating salary offers or deciding
on target geographies for a job search, it is important to take a step back from the numbers
and think of the bigger picture. Job applicants should consider the cost of living when
comparing salary packages across regions – the real, versus the nominal wage a company
and country offers.
The OECD publishes annual research comparing purchasing power between countries
(a good proxy for the cost of living). According to the OECD, the purchasing power in
Mexico is 24% more than in the US. So, even though the survey reveals that MBA graduates
are paid 34% less in Latin America than in the US, graduates working in Mexico will enjoy a
standard of living comparable with that of their US counterparts. By contrast, purchasing
power in Japan is 36% lower than in the US, so the higher cost of living will result in a
lower standard of living if the same salary is paid as elsewhere. Lastly, Hungary’s purchasing
power is 55% higher than that of the US, which means that an MBA earning 44% less in
Hungary will still enjoy a higher standard of living than a US graduate.
7.6 Regional Focus
7.6.1 United States and Europe
Within regions, there are substantial differences in salaries offered across industries.
Chart 17 shows the salaries offered in different industries within the US and Europe.
The close correlation between US and European salaries reflects the close association of the
two economies and the integration of corporate operations: an MBA graduate will face
similar prospects on either side of the Atlantic. Salary levels in financial services and
consulting, in particular, are very similar in both regions. Technology salaries and those in
general industry are also very similar.
Comparison of US & W.Europe By Sector 2005 (US$)
W. Europe US
100000
80000
US$ 60000
40000
20000
0 Ag o
Se gy
ns s
g
Ba g
s
cy
re
Lo g
In cs
al y
ac il
l S nt
Co ice
t
CG vice
in
tin
uf ta
He ustr
rin
Au
G o thca
en
sti
lo
nk
an Re
v
an rnm
ul
no
tu
gi
er
r
d
M &
ch
Fin ve
cia
Te
FM
Within geographic areas, there are major variations. For instance, Eastern European
recruiters reported an average salary of just over US$50,000, while Western European
recruiters reported salaries over US$80,000. Within countries, MBAs in major cities can
expect salaries 20% higher than in smaller ones.
Chart 18 compares MBA salaries in companies recruiting in Western Europe and Central,
Eastern and Southern Europe, segmented by the location of the recruiter’s headquarters.
There is great variation in salaries. French, Swiss and UK recruiters paid more than their US
counterparts surveyed. (The French data may contain a bias due to a high proportion of
local consulting firms in the sample).
Western Europe
Regional Headquarters of Recruiter Average Salary 2005 (US$)
France 89,063
Germany 79,688
Italy 62,500
Netherlands 70,281
Spain 71,595
Switzerland 96,872
United Kingdom 95,872
United States 86,839
Central, Eastern and Southern Europe

Greece 25,000
Hungary 27,500
Poland 65,120
Chart 18 Source: QS TopMBA.com International Recryiter Survey 2005
7.6.2 Asia
Through all the challenges that Asia has faced in recent years, (1997 Asian financial crisis,
Iraq war and SARS etc), MBA salaries have continued to rise in the region as a whole. From
1996 to 2005, average salaries for MBA graduates have risen an impressive 44% in dollar
terms. This contrasts with Latin America, where a series of currency devaluations has
negatively impacted on the reporting in US dollars.
MBA Salaries Asia: Excluding India & China (US$)
80000 73100
70000
60000
50168
US$ 50000
40000
30000
20000
10000
0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Chart 19 Source: QS TopMBA.com International Recryiter Survey 2005
Chart 20 shows average salaries reported by companies based in each country, providing a
direct comparison of average MBA salaries in the lower cost countries of China, India and
Thailand with those in the higher cost regions of Singapore, Japan, Korea and Australia.
Asia Pacific

China 25,000
Hong Kong 50,833
India 22,500
Japan 87,500
singapore 59,167
Comparing Average Salaries in Asia (US$)
80000
70000
60000
US$ 50000
40000
30000
20000
10000
0
China, India, Thailand Japan, Korea, Singapore, Australia
7.6.3 Latin America
Average Latin American MBA graduate salaries have increased by almost 20%, the largest
percentage increase of any region in the world in 2005, to US$57,000 (US$48,000).
Chart 22 shows how salary levels in Latin America have risen and fallen regularly since 1996,
but, based on the trend of the last three years, average MBA salaries should exceed
US$60,000 for the first time by next year. Volatility is, however, a feature of the region. A
little over a decade ago, it seemed that Latin America had escaped the trap of poverty.
Foreign direct investment and trade surpluses buoyed the major nations of the region and
prospects for the future looked bright. Latin America did not follow the dot.com boom of
the rest of the world. Instead, a series of economic shocks and destabilisations haunted
major Latin American nations through the turn of the century. Latin America returned in
2002 to the salary offers of 1999 only to fall again in 2003.
Since then, however, the trend is upward again and, with many business schools in the
region and a growing population, Latin America looks to be set for greater salary gains in
the future. The 2003 Argentine devaluation, against a backdrop of recession and
hyperinflation, may have been a temporary setback, but a much-needed correction. The
settling of the strikes in Venezuela and the success of the war on drugs in Columbia, were
positive outcomes in 2004. So, too, were the rise of President Lula da Silva in Brazil and
President Nestor Kirchner in Argentina, with their emphasis on building the long-term
stability of their nations. 2005 shows further encouraging signs for the region, with
employment rising in Brazil and GDP per capita rising across the region. A weaker US dollar
has helped lift exports and reduce debt burdens, encouraging more inward investment.
MBA salary gains have reflected these improved conditions.
Average MBA Salaries Latin America (US$)
60000
50000
40000
US$
30000
20000
10000
0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Chart 22 Source: QS TopMBA.com Recruiter Survey 2005
Chart 23 shows variations in MBA salaries in Latin America according to the location of the
headquarters of the recruiter. There is less variation than in Asia and the increase in
numbers of US and European companies recruiting MBAs in the region has also had a
positive impact.
Latin America

Chile 57,500
Costa Rica 42,500
Mexico 54,230
Spain 62,500
8. Appendix - Some participating companies (total respondents 505 in 2005)
Australia Intergraph Russell Reynolds

AT Kearney Johnson & Johnson Medical SUN PLANET
Chandler Macleod Shilputsi Consultants Toldos Conil
Deloitte Touche Tohmatsu Italy Switzerland
HigherEd Appointments Antal International Ltd BBVA Suiza SA
Belgium AT Kearney Medtronic Europe
CSC Computer Sciences Eli Lilly Italia Microsoft
Procter & Gamble Kraft Foods Philip Morris International
Bulgaria Roland Berger Strategy Consultants Tessaro & Associates AG
Bulbank Japan Taiwan
Canada Nikko Citigroup Citicorp Capital Asia (Taiwan) Ltd
3M Canada Inc PRTM Thailand
Aliant Liechtenstein Bo Le Associates (Thailand) Ltd
Bell Canada HILTI AG Thai Laemchabang Terminal Co, Ltd
Bombardier Inc Luxembourg Toshiba-Carrier
Capgemini Dexia BIL Total Access Communications PLC
Carpedia International Ltd Rowlands International Ukraine
CIBC Malaysia Ward Howell International-Ukraine
Colgate Palmolive PA United Kingdom
Community Experience Initiative Mexico AT Kearney
Dell Canada Inc Amex Mexico ABN AMRO
FedEx Express Canada CEMEX Adventis
Infinium Capital Corp Eli Lilly de México SA de CV Antal International
Johnson & Johnson Medical Products Endeavor Mexico Arcadia Group Limited
KidsFutures General Motors AstraZeneca
Kraft Canada Ingenium Axon
Manulife Mattel Barclays Bank
MDS Inc Pfizer Barclays Capital
Mezzanine Business Consulting Sabritas Beament Leslie Thomas
National Bank Financial Netherlands Bear Stearns
Pfizer Consumer Healthcare AEGON BOC
RBC Capital Markets CeBeOn-Europe BV Bridgewell Group Limited
TELUS Mobility Nigeria British Army
UBS West Africa Popular Foods Nigeria Ltd, Unilever Nigeria Plc BT Retail plc
Chile Norway Capgemini
Lan Amrop International CB&I John Brown Ltd
L'Oréal Peru CentrePeople Appointments Ltd
Merrill Lynch AMBC Consultoria Empresarial SAC Citigroup
Procura Digital Poland Credo
China AIMS Polska DISCO INTERNATIONAL LTD
Bo Le Associates Portugal easyJet
BOLE AT Kearney Portugal Edengene Ltd
Dell Capgemini Fidelity Investments
Education and Training Centre for Officials and McKinsey & Co FKI plc
Entrepreneurs, State-owned Assets Supervision Microsoft FMC
L'Oréal China Nestlé Portugal Hedra Plc
Motorola Portugal Telecom Informatiq Consultng Ltd
POD Management Consultants Russia JPMorgan
Costa Rica Citibank JPW Associates
Coca-Cola Company WHI Launch
Denmark Singapore LEA Consultants
Novo Nordisk AT Kearney Lehman Brothers
France Allianz Dresdner Asset Management Singapore Limited LogicaCMG
Booz Allen Hamilton Barclays Capital London Development Agency
L'Oréal Cisco Systems Macquarie Bank
Monitor Group Citibank Singapore Ltd McGregor Boyall Associates
PSD Group SA Dell Global BV, (Singapore Branch) McKinsey & Co
Terra Connecta DHL Express (S) Pte Ltd Merrow Language Recruitment
Germany HSBC Modem Media
Alphabet / BMW Johnson & Johnson Oxfam
BMW Group McKinsey & Company PA Consulting
Continental AG Octtane Pte Ltd Pertemps Recruitment Partnership
DaimlerChrysler AG PSB Corporation PrimeParnership
Deutsche Post World Net Raffles Medical Group Ltd PRTM
Deutsche Telekom Singapore Tourism Board Prudential
DPWN Singtel Richmond & Co
Hewlett Packard ST Aerospace Ltd Rolls-Royce plc
Morgan Stanley Texas Instruments Singapore SABMiller Plc
Valley Forge TIS GmbH South Korea Teach First
Volkswagen AG NG Life Tesco
Greece Spain The Parthenon Group
BSH ABE Ikiakes Syskeves Banco Zaragozano Thomson Legal & Regulatory
Citibank Plc Bodegas Melgosa Unilever
Coca-Cola Company Bosch UPS
Colgate Palmolive Hellas Cableeuropa United States
DHL International (Hellas) SA Circulo de Progreso Acorn Technology Corporation
Hellenic Post Deloitte Consulting AEGON Group
Nestle Hellas DuPont IBERICA, SL AIG American General
NOVABANK EL CORTIJO.SA American Airlines
Sfakianakis SA Endesa ATCi
Vodafone Ergodecor Avaya Communications
Hong Kong GRUPO BBVA Avaya Inc
Citibank (Hong Kong) Limited ICEX Bain & Company
Hsin Chong Construction Group IOR CONSULTING SA BASF Corp
Noble Group Ltd Management-Rating Boston Scientific Corporation
OppenheimerFunds (Asia) Ltd MG Wealth Brooks Automation
Hungary Monitor Group Cardinal Solutions
GE Hungary Rt MORENA FILMS Chanin Capital Partners
IBM Multicanal Chiquita
India Mundo Edificio CIGNA
Amrop International Pvt Ltd Nestlé PetCare España CIGNA Corporation
Infowavz International Occidental Hotels & Resorts Cincinnati Children's Hospital
Oticon Espana Cisco Systems
Appendix - continued
CIGNA Corporation Hewlett Packard Pfizer Inc

Cincinnati Children's Hospital Hilti Inc PPG Industries Inc
Cisco Systems Honeywell Procter & Gamble
Citigroup HRI Properties RecruitMilitary
Citigroup Private Bank IBM Russell Investment Group
Coca-Cola Company IDEXX Laboratories Inc Sara Lee Foods
Corning Intel Schering-Plough
Corporate Executive Board Inter-American Development Bank SG Cowen
Cummins Inc International Profit Associates Siemens Management Consulting
D&B - Dun & Bradstreet John Deere Sony Corporation of America
DaimlerChrysler Services Johnson & Johnson Sprague Energy Corporation
Degussa Corporation JP Morgan Sprint
Dell Inc Katzenbach Partners LLC Staples
Deloitte & Touche KBACE Technologies State Farm Insurance
Deloitte Consulting KPMG SWISSJUST CORP
Delta Air Lines LEK Consulting Tenet Healthcare
DiamondCluster International Lehman Brothers The Boston Consulting Group
Discover Financial Services Liberty Mutual Group The Cambridge Group
Eastern Mountain Sports Lufthansa The Gallup Organization
EBSCO Publishing M&T Bank Corporation The Goodyear Tire & Rubber Company
EchoStar Communications Manpower The Midland Company
EMC McGraw-Hill Companies travelocity
Ernst & Young LLP Mercer Management Consulting Tyco Engineered Products and Services
Ethicon Endo-Surgery, Johnson & Johnson Merck & Co UBS
Federated Dept Stores Inc Merrill Lynch Unilever
FedEx Services Michelin North America United Way of Greater Cincinnati
Fidelity Microsoft Valassis
FMC Technologies Inc Morgan Samuels Company Wayne Water Systems
Ford Motor Morgan Stanley Whirlpool Corporation
Ford Motor Company Northrop Grumman
General Motors Oreck Corporation
Georgia-Pacific Corporation Oversease Private Investment Corporation
Goldman Sachs Parkway Properties
Greenwich Associates PC Connection Inc

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TopMBA.

com International MBA

Nunzio Quacquarelli MA Cambridge, MBA Wharton

Any excerpts must be sourced: QS TopMBA.com International Recruiter Survey 2005.

3. Methodology and Credentials 3

5. Background to Trends - the upswing gathers pace 6

6. MBA Recruitment Trends 2005 7

7. MBA Salaries and Compensation 15

Since 1990, QS Research, in collaboration with TopMBA.com, has conducted an annual

Who will be interested in the survey?

1. Companies that recruit MBAs and recruitment consultants

2. Business school administrators and career services worldwide

3. Current and future MBA graduates

3. Methodology and Credentials

Regional Distribution of Responding Recruiters 2005

43% Western Europe

Recruiter Response by Industry 2005

Chart 2 Source: QS TopMBA.com International Recruiter Survey 2005

Consulting Financial Services Industry Technology

Asia McKinsey Citibank Toshiba Cisco

Europe AT Kearney Barclays Capital Whirlpool Vodaphone

Latin America Bain & Co. BankBostonChile Mattel Ingenium

USA IBM Consulting Morgan Stanley Sony Microsoft

Chart 3 Source: QS TopMBA.com International Recruiter Survey 2005

However, www.global-workplace.com, a jobs site which is operated by QS on behalf of many

6.1 Demand for MBAs

Index of MBA Recruitment 1990-2007

Chart 4 Source: QS TopMBA.com International Recruiter Survey 2005

6.2 Demand for MBAs by Region

Trend in Employment Opportunities by Region 2004 - 2006

Chart 5 Source: QS TopMBA.com International Recruiter Survey 2005

North American Recruiter Responsibilty by Region in 2005

Chart 6 Source: QS TopMBA.com International Recruiter Survey 2005

European Recruiter Responsibility by Region in 2005

13% Asia Pacific/ROW

Top 10 Consulting recruiters of MBAs in 2005:

6.3.2 Banking and Financial Services

Top 10 Financial Services recruiters of MBAs in 2005

Top 10 Technology MBA recruiters in 2005

6.3.4 General Industry

Top 10 Industrial MBA Recruiters in 2005

This broad grouping of industries covers, aerospace, automotives, chemicals, logistics,

6.3.5 Pharmaceuticals and Healthcare

Top 10 Healthcare MBA Recruiters in 2005

6.3.6 Small Enterprises and Entrepreneurship

6.4 Functional Roles

Functional Roles Offered to MBAs in 2005

Chart 8 Source: QS TopMBA.com International Recruiter Survey 2005

6.5 Experience Levels

Preferred Levels of Experience for MBAs

Chart 9 Source: QS TopMBA.com International Recruiter Survey 2005

Key MBA Skills: Importance versus Satisfaction (as ranked by recruiters)

3.0 Satisfaction Importance

Scale: 3 Highest, 1 Lowest

Chart 10 Source: QS TopMBA.com International Recruiter Survey 2005

7.1 Global Trends in 2005

Average Salaries in US & Europe 1996 - 2005 (US$)

Chart 11 Source: QS TopMBA.com International Recruiter Survey 2005

Chart 12 Source: QS TopMBA.com International Recruiter Survey 2005

7.2 Salary and Bonus Combined

Average MBA Earnings by Sector 2005 - Salaries & Bonuses in

150000 Bonuses Salaries

Chart 13 Source: QS TopMBA.com International Recruiter Survey 2005