Post-MBA careers: More Finance, Less Industry...

Just got back today from Bombay, ending my 4 1/2 month travels before I start my MBA at LBS this August. I ended up traveling to Brazil, Ecuador, Thailand, Laos, Vietnam, Cambodia and India. If anyone is interested about the cost of traveling for 4 1/2 months: I burnt about $9K and used up 90K in frequent flier miles. As for my plans of a pre-MBA internship, that never materialized. Traveling is just too much fun, it's very hard to start thinking about work once you're on the road. To anyone considering pre-MBA travels, I highly recommend it. It also allowed me to meet up with 8 of my future classmates around the globe.

Anyways, to the topic of this post. There's a very interesting Employment Report (2007) which LBS publishes on its website. It reveals some interesting stats. Looking at data from 2003 and 2007, it seems like more and more MBAs go for Finance at the cost of Global Industry. Here's the breakdown of post-MBA employment by sector:



Why is that? The average starting salary per sector might explain this. In 2007, the average starting base salary including year end bonus for LBS grads in Financial Services was about $183K, compared to "just" $139K for Global Industry. Also, the average sign-on bonus of $48K in Financial Services is juicier (vs $24K for Global Industry, exactly the half). Simply put, graduates are going to where the money is.

More interesting data: If you ever wondered how many people actually switch careers after their MBA, the report also casts light on this (showing where people came from for each of the three sectors).

I personally plan to go into Global Industry as my post-MBA goal. You probably make as much as in Financial Services - on an hourly basis.

Update: Given the financial crisis and downturn in the economy, the trend described will most likely reverse for the class of 2009. Go Industry!

What do the GMAT and crack dealers who still live with their moms have in common?

So I was trekking in the Indian Himalayas (Ladakh) - fantastic trip. Unfortunately, when I wanted to fly back to Delhi my flight got canceled because of bad weather. They put me on the next available flight - which was 3 days later!!! If you happen to go to the Ladakh region (the city there is called Leh) then plan for some contingency days. Some people at the airport were really furious about missing connecting flights to Europe in Delhi.

Anyways, back to the weird title of this post. During the 3 days I had to wait in Leh, I had plenty of time to finish the book I was reading: Freakonomics by Steven D. Levitt. I found that this book would be a good read for those wanting to improve on their GMAT verbal critical reasoning problems! The author uses statistical data to answer weird questions (e.g. why crack dealers still live with their moms). He discusses correlations and causalities of data, similar to some of the GMAT verbal critical reasoning problems. For example, you might recall something like:

Company X increased its advertising expenditures. As a result, more TV ads were broadcast and hence its brand awareness among TV viewers increased. Sales increased over the next quarters.
What can we say about advertising expenditures for company X?
a) Increasing them led to higher sales in subsequent quarters
b) Increasing then led to higher brand awareness among TV viewers
c) I hate TV commercials
etc.

Answer b) would probably be best. Now an example from the book: In the 90s, the crime rate was falling sharply while the economy was booming, more cops were employed and policing strategies were introduced. The media quickly used these events to explain the drop in crime rates. But just as with the GMAT example above, these occurrences just come in handy as an explanation, the same way higher advertising expenditures could be a good reason for higher sales (but maybe a better product was launched, or the main competitor shut down, etc.). If you're interested, according to the book, the biggest factor for the reduction in crime in the 90s was the legalization of abortion in the 70s (pretty shocking, can you guess why?).

So what do the GMAT and crack dealers who still live with their moms have in common? I don't know :-)! Maybe it's that both enjoy a monopoly. The crack dealer usually has the exclusive distribution rights (backed by his gang) to sell crack in a certain area. The GMAT guys have the monopoly on standardized tests for b-schools around the world. Man, maybe I should have written a book during my 3 day wait on things the GMAT has in common with random stuff.

LBS Waitlist

A quick entry as someone on the WL asked about R4 stats. As for the WL, there definitely has been some movement. When I checked the portal occasionally, the number of admits suspiciously went up by a couple from time to time. After application rounds, the number of admits goes up in large batches, so these small increases are probably people from the WL.

Now to the number of current admitted students. There was just a reduction (not very significant) meaning some didn't pay up the 6000 pounds and decided to go to another b-school or just changed their plans. If the class size remains the same as last year (316 students) then there are still more admits than that (roughly 10% more). One big question is if the deposit deadline for R4 admits has passed - I don't know this. If yes, then the prospects for current applicants on the WL could be a bit bleak (if those who didn't make the deposit were included in the recent drop of admits). If not, then there might be some more open spots as some R4 admits will decide to go to other schools. But if you calculate for a normal yield, then I estimate the class size to be at around last year's class size (maybe even larger), again not the best news for waitlisters.

Update: The deposit deadline for R4 admits probably has not passed yet, since they were just notified on July 4th about their admission decision.

Some positive things to mention though: As stated above, people are coming off the WL! Also, LBS might increase the class size due to the increase in applications (I'm assuming they have increased, looking at what other b-schools have said). And then there is always the deferred admit for next year (estimated at around 5-10 from what I've read on the BW forum? I might be completely wrong).

Please don't let this post influence you in any way. I have no idea what's going on at LBS behind closed doors - I'm just babbling about some stats and making crude assumptions. I wish everyone on the WL best of luck! Don't give up hope.