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Index of Figures Figure 1: Regional Distribution of Responding Recruiters 2008 5 Figure 2: Recruiter Response by Industry 2008 6 Figure 3: Examples of Responding Employers by Region 7 Figure 4: Index of MBA Recruitment 1990-2009 9 Figure 5: Percentage changes in MBA opportunities by sector worldwide 11 Figure 6: Trend in Employment Opportunities by Region 2007-2009 17 Figure 7: North American and European Recruiter Responsibility by Region 2008 18 Figure 8: Functional Roles Offered to MBAs in 2008 24 Figure 9: Preferred Levels of Experience for MBAs 25 Figure 10: Key MBA Skills 26 Figure 11: Average Salaries in US & Europe 1996-2008 27 Figure 12: MBA Salaries in US and Europe by Industry 1996-2008 28 Figure 13: Average MBA Earnings by Sector 2008 29 Figure 14: MBA Salaries by Region 2008 31 Figure 15: MBA Salaries by Region - Local Employers vs. Average 32 Figure 16: MBA Salaries across Regions 1996-2008 33 Figure 17: MBA Salaries in North America by Sector 35 Figure 18: MBA Salaries in North America by Country 35 Figure 19: MBA Salaries in Europe by Country 36 Figure 20: MBA Salaries Asia 37 Figure 21: MBA Salaries in Asia by Country 37 Figure 22: Comparing Average Salaries in Asia 38 Figure 23: Comparing Average Salaries in Latin America 39 Figure 24: MBA Salaries in Latin America by Country 39

QS Quacquarelli Symonds Ltd 1 Tranley Mews Fleet Road London NW3 2DG United Kingdom The entire content of this publication is protected by international copyright. All rights reserved. No part of this publication may be copied or reproduced in any form without the prior written permission of the publisher. Reproduction: Tables and charts may not be reworked or presented in any other form without written permission from the publishers. Any excerpts must be sourced: QS TopMBA.com International Recruiter Survey 2008. All charts must be sourced: QS TopMBA.com International Recruiter Survey 2008.

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Contents 1. Introduction Who will be interested in the survey? 2. Summary of Findings 3. Methodology and Credentials 4. Companies Surveyed 5. Long Term MBA Recruitment Trends 6. Short Term MBA Recruitment Trends 2008 6.1 Demand for MBAs 6.2 Demand for MBAs by Region 6.2.1 North America 6.2.2 Europe 6.2.3 Asia 6.2.4 Latin America 6.2.5 Global versus Local Employers 6.3 Demand for MBAs by Sector 6.3.1 Consulting 6.3.2 Financial Services 6.3.3 Technology 6.3.4 General Industry 6.3.5 Pharmaceuticals and Healthcare 6.3.6 Small Enterprises and Entrepreneurship 6.4 Functional Roles 6.5 Experience Levels 6.6 Skills 7. MBA Salaries and Compensation 7.1 Global trends in 2008 7.2 Salary & Bonus Combined 7.3 Bonuses 7.4 Trends by Region 7.5 Strategies for MBA Salary Analysis 7.6 Regional Focus 7.6.1 North America 7.6.2 Europe 7.6.3 Asia 7.6.4 Latin America 8. Appendix – Some participating companies

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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 2008 survey is as extensive as ever and presents an unrivalled overview of the world MBA recruitment market. Complete responses were received from 619 companies (489) in 32 (35) different countries. This represents approximately twice the response level of the Business Week Employer MBA survey and includes five times the number of non-US respondents than any other MBA recruitment survey. (Comparative figures for 2007 are shown in brackets throughout the report and in some instances double brackets are used to denote results from 2006). 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 to make informed strategic decisions: 1. Companies and agencies that recruit MBAs 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 program administrators and career services will find the survey invaluable for providing guidance to students and managing 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.

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2. Summary of Findings

Despite fears of a global recession and the enormous impact of the credit crunch on the world’s financial markets, the MBA market remains buoyant in 2008 and recruiters, in general, remain quietly confident that 2009 hiring will proceed with only small adjustments to current levels. In recent years, several MBA commentators believed that MBA education would never return to the glory years of the late 20th Century. Yet in 2008, MBA recruiter demand exceeds the level at the height of the dot-com boom. MBA recruiters around the world are in the midst of a battle for talent, but the battle ground is shifting away from developed economies towards emerging markets, particularly Asia. As world growth continues, demand for MBAs is spiralling, with the greatest demand occurring in the consulting service sector. The QS TopMBA.com International MBA Recruitment and Salary Report 2008 highlights the trends in recruitment and salaries earned in the primary international markets today. Hiring predictions from MBA recruiters suggest that MBA demand worldwide will set a new record in 2008, but will fall back slightly in 2009. The QS TopMBA.com Index of MBA recruiting shows an overall 11% (24%) increase in demand for MBAs in 2008, with the consulting sector reporting an 18% (29%) increase in MBA demand. Financial services demand grew at 7% (23%), general industry at 14% (24%), and technology at 5% (29%). The forecasts for 2009 are not quite so optimistic with recruiters anticipating a fall in overall MBA demand by 2% from the 2008 levels. In particular, financial services expects a -9% fall in MBA demand next year. Technology expects a -1% fall and HR/recruitment services expect their MBA placement levels to fall by -15%. These figures are offset by an expected 5% growth in demand within consulting and a 5% growth in demand within general industry. The outlook for MBA salaries seems to be stabilising overall, after several years of strong growth. In 2008, average MBA salaries in Asia-Pacific (excluding China, India and Thailand) remained stable at $71,500 (all dollar figures in US currency) – but MBA salaries in China and India have grown an extraordinary 50% - demonstrating where the real battle for talent now lies. By comparison, US-EU average MBA salaries have risen just 2% to $95,200, still well in excess of the pre-downturn levels of 2001. These small increases reflect competing forces such as the increased competition for top talent, especially across borders, the slow-down in demand in the high-paying financial services sector, and the expansion in the list of business school employers. The average reported bonus is a sizeable $26,875 ($24,100), with banks/financial services companies still leading the bonus field, with an average bonus of $38,500 ($46,400). MBA recruiters around the world have a strong preference for candidates with three to five years of professional experience. They seek strong communication and interpersonal skills, strategic thinking and leadership skills, as well as the harder skills taught by business schools. In general, whilst they are very happy with the harder skills ingrained in MBA graduates, there is still room for improvement in softer skills. Regionally there is a catch up occurring in the demand for and salaries received by MBAs in emerging markets, compared to the more established markets of North America and Western Europe. Though there is still a 30% salary gap between the highest and lowest paid regions, this gap is narrowing each year.

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3. Methodology and Credentials The QS TopMBA.com International Recruiter 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 research does not rely on MBA graduates to report their earnings, but obtains the information from the employers who pay them. Each respondent is designated as responsible for MBA recruiting within his/her company as a whole or division. They are asked to identify their geographical responsibilities, confirming whether they recruit locally in their domestic market, regionally, or globally. 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 last 18 years. This allows for meaningful trends to be identified over time. QS operates the website, www.global-workplace.com which provides career opportunities and networking facilities exclusively for member business schools. Over 100 business schools and 800 employers subscribe to QS Global Workplace (and QS TopMBA Careers).

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4. Companies Surveyed

Responses were received from across the globe: 40% (44%) of respondents were based in North America, 30% (27%) in Western Europe, 17% (16%) in Asia-Pacific, 8% in Eastern Europe (6%), 5% (5%) in Latin America and <1% (1%) in the Middle East & Africa. This provides detailed insights across regions. Regional Distribution of Responding Recruiters 2008

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 1: Regional Distribution of Responding Recruiters 2008 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 technology, industry, banking and consumer goods. Respondents from the recruitment consulting industry are kept separate although they have a bias towards financial services and consulting recruitment.

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Recruiter Response by Industry 2008

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 2: Recruiter Response by Industry 2008

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The 619 national and international companies that responded to the survey are guaranteed confidentiality for the components of their individual responses, except for any open-ended feedback they have chosen to provide on the value of an MBA or concerns with MBA hires. The following Figure 3 gives a snapshot of some of the organizations that took part in the survey across the world. A more comprehensive list can be found in the Appendix at the end of this document.

Examples of Responding Employers by Region Financial Services

Consulting Asia

OCBC Bank

Accenture

ANZ

BCG

Industry

Technology

LG Electronics

Avaya

Akzo Nobel

Dell

Rio Tinto

Bloomberg

PwC

Standard Chartered

A.T. Kearney

Credit Suisse

Exxon Mobil

Oracle

PricewaterhouseCoopers

Merrill Lynch

Astra Zenica

SAP

Roland Berger

Goldman Sachs

Nike

Amadeus

Bain & Co.

Banco Santander

Bradesco

Europe

Latin America

Deloitte Consulting Ernst & Young

North America

INBio

Scotiabank

Johnson & Johnson

Compuserman

BBVA

Asturer

Pfizer

DuPont

Google

3M

Motorola

GE

Intel

Liberty Mutual Booz Allen Hamilton IBM Consulting McKinsey

Bank of America JP Morgan Chase

Source: QS TopMBA.com International Recruiter Survey 2007 Figure 3: Examples of Responding Employers by Region

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5. Long-Term MBA Recruitment Trends

MBA demand tied to the strength of the global economy The MBA (Master of Business Administration) is a graduate management degree, which prepares professionals for management responsibility. It is one of the best-known degrees in the world, with more people taking it than any other postgraduate course. Deciding to take an MBA is a crucial step in an individual's career. MBA demand amongst employers is cyclical and is tied to the strength of the global economy. In recent years, a growing number of companies around the world have seen 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 consultancy. On recent trends, it is also becoming common for business development and technology managers to take an MBA to help reach the next step in their career. As a consequence more and more highly motivated young people are looking to an MBA to achieve rapid career progression, or the geographic and functional flexibility offered by an MBA qualification, further fuelling the demand amongst employers. Figure 4 shows the long-term trend in MBA hiring worldwide, by sector. Consulting and financial services will account for 50% of MBA hires at many schools. Additionally, the absolute number of MBAs hired into the consulting sector has more than doubled since 2003 and will have trebled if 2009 forecasts are achieved. There is a projected fall in demand within financial services in 2009, but this will still represent twice the number of MBA opportunities in this sector compared to 2002. For the purpose of simplification, this survey groups together as ‘general industry’; manufacturing, logistics, chemicals, automotive, FMCG etc. This sector does not achieve the same publicity as consulting and financial services, but it is steadily increasing the number of MBAs it absorbs each year. As more and more companies are competing globally, this trend is expected to continue. In recent history, MBA demand has moved in line with global economic growth. 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 20002003. 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. From 2005-2008 we have witnessed resurgence in MBA employer demand, far exceeding previous levels. Only time will tell if we are at a watershed.

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Index of MBA Recruitment 1990-2009

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 4: Index of MBA Recruitment 1990-2009

Sara Crawford, MBA Recruitment Manager at Goldman Sachs (London) believes the outlook for MBA hiring in 2009 is pretty good. “GS recruits MBAs for long-term leadership roles and we have seen a steady increase in the numbers hired over the previous five years across all areas of the business. We recruit MBAs to develop future leaders and directors, add value and strategic thinking, diversity, international experience and networks. We particularly value the diversity of people we can attract from business schools. We are not just looking for previous bankers or consultants.” Crawford accepts that the future has a degree of uncertainty. “GS has performed extremely well in recent years, but we are not complacent and recognise this may not continue indefinitely. If we enter a downturn, then we realise that not all areas of the business will perform equally well and recruitment numbers by division will vary overtime.” Diane Morgan, Careers Director at London Business School believes the long term outlook for MBA hiring is very good. She argues that many companies, and especially banks “are taking a longerterm view of their MBA hiring. Several of them made the mistake of cutting back in 2002 and were left with a big gap in talent when the markets picked up.” Jacinta Low of OCBC Bank, Singapore says: “We view MBAs as our pipeline of future leaders. As MBA graduates, they are expected to accelerate their learning and contribute to the organization quickly. Their work experience makes them a more stable and mature workforce, compared with fresh undergraduates.” For the consulting sector, MBAs are a source of “smart people who can think strategically and in a structured manner” according to Mithran Doraisamy, Ernst & Young. John Fraser, Principal at Fraser Dawson Management Consultancy adds: “A good MBA will enhance the student's business awareness (particularly of areas in which they don't have direct experience) and, thus, should improve their contribution to a subsequent employer.” More and more industrial companies are also recruiting MBAs, from a broader number of business schools than ever before. Some are looking for a skills match. Daniela Grienwald of Hilti

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Corporation, an industrial holding group in Europe says: “The combination of a technical study background, relevant work experience and an MBA makes a good fit for companies like Hilti.” Others, like William Grant Johnston at GE, are looking for raw talent with: “Experience and educational pedigree, backed up with exposure to a wide variety of life and business experiences.” New developments in the manner in which companies are recruiting MBAs are also taking place. Tom Harrison at QS Global-workplace.com in London observes: “An ongoing trend in recent years is for MBA alumni, who are now in a position of hiring responsibility, to return to their school to pick up new talent.” In particular, there is also a move towards using internships as a method of improving the chances of a good fit between candidates and employers. Dan Beaudry, who manages employer relations for QS TopMBA and Global-Workplace in the US, says: “Companies are investing more heavily in their summer internship programs. MBA recruiters often treat the internship like a three-month interview, and look to their interns as the first source of full time hires.” This view is backed up by many of the big recruiters. Crawford says: “GS places a great emphasis on recruiting graduates and MBAs for summer internships, providing a mutual opportunity to confirm the fit. Interns have a chance to experience working within GS and we have an opportunity to take a look at them in action. We expect a very high proportion of our interns to then convert into full time hires so we undertake very little additional full time hiring.” Beaudry also identifies rotational programs as a popular technique for companies to accelerate the development of new MBA hires. “Rotational programs are particularly hot on campus. Students value the training and variety that come along with them; but companies with programs continue to wrestle with the ROI – particularly if there is a retention issue.”

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6. Short-Term MBA Recruitment Trends 2008

6.1 Demand for MBAs In 2008, the situation for MBA hiring remains very positive, but only time will tell if we are at a watershed. Surveys by the MBA Career Service Council and GMAC have confirmed a relatively benevolent environment, as business school career services report another strong year for MBA hiring. A continued boom in emerging markets could well sustain MBA demand long into the future. Most developing economies are drastically short of internationally trained managers and we are already seeing many North American and European nationals accepting job offers in Asia, Dubai and Russia. MBA recruiters around the world are in the midst of a battle for talent, but the battle ground is shifting away from developed economies towards emerging markets, particularly in Asia. Hiring predictions from MBA recruiters suggest that MBA demand worldwide will set a new record in 2008. The QS TopMBA.com Index of MBA Recruiting shows an overall 11% (24%) increase in demand for MBAs in 2008, with the consulting sector continuing its rapid growth reporting an 18% (29%) increase. By contrast, financial services demand grew at 7% (23%), general industry at 14% (24%), and technology at 5% (29%). The forecast for 2009 is not quite so optimistic with recruiters anticipating a fall in overall MBA demand by 2% from the 2008 levels. In particular, financial services expects a -9% fall in MBA demand next year. Technology expects a -1% fall and recruitment/HR services expect MBA recruitment levels to fall by -15%. These figures are offset by an expected 5% growth in demand within consulting and a 5% growth in demand within general industry.

Percentage Changes in MBA Opportunities by Industry Sector Worldwide in 2008

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 5: Percentage changes in MBA opportunities by sector worldwide

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QS Global-Workplace (www.global-workplace.com), a jobs and careers site operated by QS on behalf of many of the world's top business schools, saw 10,277 new MBA jobs added to the site in the 12 months from August 2007 to July 2008. Of these, the most popular sectors were: financial services 26%, IT 19%, consulting 18% and high-tech 10%. Tom Harrison says: “...the big demand for MBAs last year came from the service sector – banks and consultancies – not just the big name firms, but also many smaller organizations. In 2008, we are seeing more technology companies competing to hire the best MBAs and a shift in the percentage of jobs to Asia with a reduction from the US.” The Top 10 countries as a source of jobs on QS Global-Workplace in 2008 are as follows: United States 1538 United Kingdom 1317 China 1080 Singapore 597 Canada 504 India 475 Germany 355 Russia 328 Australia 325 Hong Kong 325 Source: www.global-workplace.com 2008 At the same time, it is always worth expressing words of caution. A recession, as seen between 2001 and 2004, is not on the cards but with falling house prices, a growing deficit in the US, and rising energy costs, a fall in MBA demand in some regions in 2009 is possible. Chris Higgins, Associate Director of Career Services at Wharton cautions: “MBA candidates need to remain flexible about their career aspirations. I started working at Wharton in April 2001, just in time to experience the dot.com and consulting crash. Demand for MBAs has been great in recent times, but it is cyclical and you never know what is around the corner.” The short-term outlook for MBA applications is undoubtedly positive, which is good news for schools and employers. In times of impending recession, an MBA is seen as a route to diversify risk away from the country, industry or function – resulting in an uplift in MBA applications. Graham Hastie, Strategy Manager at London Business Schools observes that: “With an MBA, it becomes easier for someone to make up to two out of the three big career changes, either in geography, function or industry, but rarely can someone change all three.” 2008 MBA applications are nearing record levels and competition for places is intense. Rose Martinelli of Chicago Graduate School of Business says: “US applications have increased by over 100% over the last three years, whilst international applications are also well up.” Historically MBA applications tend to fall back towards the end of a recession and the onset of the upturn. Between 2003 and 2005 there was a 20% decline in MBA applications worldwide. In some countries, young professionals seeking career progression within their function or industry were reluctant to take a risk and leave to embark on an MBA in case they missed out during their time away. This trend was evident in the US, and especially in China, where MBA applications fell by 50% during these years – a period of Chinese economic boom. Some young professionals try to time their MBA so they can benefit from the next boom on graduation. Experience suggests that such forecasting is difficult and the best time to take an MBA is when you feel ready personally, irrespective of economic conditions. An MBA should be viewed with a long-term career perspective.

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6.2 Demand for MBAs by Region 6.2.1 North America In the US, the largest MBA employment market, recruitment is looking vulnerable according to the QS TopMBA.com Recruiter Survey. Dan Beaudry, who manages employer relations for QS TopMBA and Global-Workplace in the US, says: “Although demand for MBAs remains strong in the US, many MBA employers are re-assessing their MBA hiring needs. This does not mean that they are going to make drastic cuts, but they are having to re-assess their plans (especially to compensation levels) and make modifications in light of changing market conditions.” Demand is still growing among mainstream, high volume recruiters in the consulting and industrial sectors. Debbie Sehulster of Ingersoll Rand USA says: “We have been able to improve our leadership strength over the years by bringing on a handful of MBAs each year. We have a rigorous hiring process and have been successful in recruiting and retaining high calibre talent that in the long term become high performing and/or high potential leaders in our organization. MBAs bring us greater business acumen than undergraduate students and through our relationship with selected schools.” However, many industrial companies are having to look outside the top-tier schools in order to find the MBAs which match their skill requirements at a competitive salary. Mesha Mott of Mead Westvaco USA observes: “Depending on the universities and skills sets required, salary requirements may be misaligned with what the candidates actually bring to the table. This usually is a function of both school/reputation of program and skill set of hires.” For many candidates, entry to a top-tier US business school channels them into a banking or consulting career post-MBA in order to pay back the fees, as well as natural peer-pressure to get the ‘best job’. A growing number of candidates are actively looking for specialist smaller schools which can better match their career aspirations. This requires a more thorough self-assessment prior to the MBA, a thorough school search and a reduced reliance on overall rankings. It is still a challenge for foreign students to obtain H1 visas to stay and work in the US, though recent evidence confirms that as the labour market tightens, recruiters are finding ways to hire the people they really want. Chris Higgins, Associate Director of the Career Service at Wharton comments: “Over 60% of Wharton's international students accepted full-time positions in the United States last year.” At UC Irvine, Tom Koziki Director of Career Services reports that 90% of their international students obtained work permits to stay and work in Southern California, but a handful of students were unable to stay beyond their F1 visa which guarantees a year of work experience in the US after an MBA. Beaudry provides further insight: “H-1B visas are still at a premium in the US. Approximately 163,000 petitions were filed with the government for the 65,000 (and 20,000 “advanced degree”) visas authorized by the US congress. Some initial excitement about an authorized extension of Optional Practical Training (OPT) was disappointed as MBA degrees do not fall under the science, technology, engineering or mathematics sectors eligible for the extension.” This may change in the near future as American companies push the government for an increase in the number of available H-1B’s.

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6.2.2 Europe, Middle East & Africa MBA recruitment in Europe remains strong and is on the agenda of European-based companies seeking to be internationally competitive. Susan Haddon of Merrill Lynch in London says: “MBAs bring a diverse skill set to the organization from their studies and previous work experience. Furthermore they provide us with languages that are required in individual business areas and teams and tend to be more business conscious. MBAs are very focused on their next career step and are very thorough in their approach to working for the right organization.” Most European MBA recruiters expect to maintain their MBA hiring numbers in 2009. Sarah Crawford, MBA Recruitment Manager at Goldman Sachs (London), observes that: “GS sees no significant changes to our MBA or graduate hiring numbers in 2008. Our intern numbers in summer 2008 will also be similar to last year. We expect to hire about 50 MBA interns in the EMEA region in summer 2008.” Several European countries are becoming hot spots for MBA recruiting. In particular Central and Eastern Europe is reporting strong demand. The hottest country is Russia. With growing international ambitions, many Russian companies are seeking MBAs to open up new markets, in energy, raw materials, manufacturing and financial services. There are also many consultants and financiers gravitating towards Russia. Aleksey Elizarov of LC Community Consulting in Moscow says: “The basic motive for choosing MBAs is their readiness to answer strategic questions for our clients.” Good Czech or Hungarian candidates are highly sought after, but mainly outside their home country. Bulgaria and Romania have small domestic demand for MBAs, but increasingly EU recruiters are hiring those nationals who hold EU citizenship. In Western Europe, the UK remains at high employment levels, and international MBAs are particularly advantaged by the Highly Skilled Migrant Program, the visa regime that is favourable to MBAs of almost any nationality. At recent £/US dollar exchange rates of 1.9:1, the UK is paying the highest salaries for MBAs worldwide. The German economy is the engine of MBA demand in Western Europe. Strong demand for German goods in Asia is fuelling a demand for Asian MBAs to join companies in this European stronghold and likewise, many service companies are desperate to recruit German MBAs to serve their successful German clients. France remains sluggish, though their government seems set on revitalising the industrial sector and major companies are active. Tamsin O’Bryen of Sodexo reflects the continuing scepticism of some French employers towards MBAs when she says: “While the level of learning of MBAs is good and gives a strong insight into the organization I think MBA schools need to be more careful in managing their students’ expectations. A lot believe that the certificate makes them a natural leader but that is not the case all of the time. An MBA doesn't act like a magic wand!” Spain and Italy are also sluggish, but have growing numbers of financial and technology companies regularly recruiting MBAs, as well as a growing consulting industry. They remain somewhat immune to the credit crunch, though their export industries are suffering from the strong Euro. Dominique D’Arcy of the Career Service at Manchester Business School says: “Increasingly the MBA is becoming the main stream qualification for recruiters in many Western European countries, as has been the case in the US for many years. Strategy consultants are still recruiting actively, but they have been joined by the professional service companies like KPMG, E&Y and Deloitte - all of whom are targeting MBA recruiting this year. Many industrial companies have been enticed into the MBA market in the last three years and they have enlarged the total pool

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of MBA employers compared to the pre-dot.com era. We are also seeing renewed activity among technology and telecoms companies,” she says. But the real news in the last couple of years has been Dubai. D’Arcy comments: “Companies in Dubai are booming and they are seeking MBAs in large numbers, in particular, Indian MBAs who have some links with the region. For example OC&C has acquired Middle East Strategy Associates and is hiring actively from MBS.” Graham Hastie confirms that Dubai and the Middle East is a hot spot, “a bit like the wild west – some banks and consultancies expect to double in size every six months and are recruiting accordingly.” By contrast, MBA demand in Africa is subdued. London Business School has turned away employers from Kenya and Nigeria because they do not have the right profile of candidates. Meryll Folb of Standard Bank of South Africa observes: “Salary is a big barrier for African employers.”

6.2.3 Asia MBA recruiters around the world are in the midst of a battle for talent, but the battle ground is shifting away from developed economies towards emerging markets, particularly in Asia. Without doubt, the QS TopMBA.com Recruiter Survey is reflecting the emergence of more and more Asian companies seeking MBAs. They will naturally look to hire locally if they can find the quality, though many Asian employers are still committed to hiring from North American, European and Australian business schools. The rise of an elite cadre of Asian business schools is underway, but will probably take another ten years to be fully established. In Asia, the MBA is becoming more in vogue. Asian candidates are among the highest GMAT scorers in the world and are focused on developing excellent technical skills, often at the expense of integrating fully in the social aspects of the MBA. But Asian recruiters are looking for ambitious, well rounded MBAs. Amy Low of Visa International in Singapore says: “MBAs bring an intellect, fresh approach and strong determination to excel in their delivery.” China is the hottest market in Asia. “More and more MBAs are joining Chinese companies from international MBA programs and Asian MBA programs,” says Michael Yang, General Marketing Manager of Motorola (China). “I think the attraction for these MBAs is not the starting salary, but the growing opportunity.” Amy Chong of EQT Partners in Hong Kong says: “MBAs bring commercial acumen and international experience” to the China-based employers. Korea and Japan are well developed MBA markets. Jay Kang of Maekyung Business Newspaper in Korea observes: “The large companies in Korea, like LG, Samsung and Hyundi, have recruited MBAs for many years. However there is a large unmet demand among mid-sized Korean companies who wish to employ MBAs but do not know how to go about this.” Sei-Woong Yoon, an MBA alumnus from IMD and CEO of Overture Korea, says: “A top MBA is a gateway to an international career for a young Asian. Before I took my MBA, I worked in advertising in Korea and had a totally domestic focus. Since my MBA, I worked with Saatchi & Saatchi in London, became a COO of Yahoo in Asia and now run Overture. My whole international managerial perspective was shaped by my MBA. Today I think such a global perspective is even more important.” T. Takenouchi of Copernicus Associates in Japan agrees: “We favour the many MBA holders who have an international perspective, strong interpersonal skills, as well as a good understanding of marketing, finance, or strategic planning.”

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6.2.4 Latin America Latin America has been a relatively inactive region for MBA recruitment, with most Latin American MBAs choosing to study and work abroad in Europe or North America, but this is changing. Brazil, in particular is a vibrant economy offering many opportunities for MBAs in banking, energy, natural resources and consulting. Latin American companies are now reaching out to US, Spanish and other European schools to pick up the talented nationals choosing to study overseas because of the need for internationally minded leaders. Vanessa Matemoros of INBio in Costa Rica says: “For specific positions like managers of some process we prefer MBAs. Interpersonal skills count a lot, and not just the MBA qualification.” Alejandra Herrera of Asturer, Mexico looks for MBAs who: “have great potential to grow in to leaders within the organization.” “There is definite movement in the market,” confirms the Director at Instituto de Empresa's career management centre. Many European banks now own the major Latin American Banks and they actively recruit MBAs, as do consultancies and major industrial companies. The biggest such recruiters are BBVA and Banco Santander, which have emerged as regional banking leaders in Latin America, though HSBC is not far behind. The Mexican market is very strong, but we are seeing a region-wide improvement. Salary remains a big issue. Yogesh Chavda of Procter & Gamble Venezuela sees MBA recruiting as: “an opportunity to gain people with the right level of maturity”, but is often thwarted because “expectations are too high.” At present there remains a big differential between MBA salaries paid by international companies and those offered by local employers.

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6.2.5 Global versus Local Employers More and more companies are global in their operations without ties to any one region. Many of these companies have recruiters with global responsibility for hiring MBAs. In total, 142 (58) recruiters responding to our survey had global responsibility for MBA hiring, more than double the previous year. These global recruiters include strategy consulting firms, investment banks, pharmaceuticals, supplemented by a small number of companies in most other sectors. In addition, many recruiters headquartered in one location will have responsibility for a region elsewhere. These regional and global recruiters tend to pay higher salaries and recruit larger numbers of MBAs rather than local employers. Figure 6 shows the growth in the number of MBA opportunities. Regional and global MBA employers headquartered in the US and Europe is fuelling the growth in demand worldwide. Local companies in Asia and Latin America still account for relatively few MBA opportunities and recruiters in such organizations have reported only limited plans for an increase in MBA hiring.

Trend in Employment Opportunities by Region 2007-2009

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 6: Trend in Employment Opportunities by Region 2007-2009

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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. Although 40% of responding recruiters are based in North America, Figure 7 reveals that 33% of these recruiters have some responsibility for recruiting globally or in Europe, Asia or Latin America (67% are purely domestic focused). Similarly, European recruiters make up 30% of our sample, but a massive 80% of these recruiters also have some responsibility for recruiting globally or in North America, Asia or Latin America (only 20% are purely domestic focused).

North American and European Recruiter Responsibility by Region 2008

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 7: North American and European Recruiter Responsibility by Region 2008 The dominance 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.

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6.3 Demand for MBAs by Sector 6.3.1 Consulting Top 10 Consulting Recruiters of MBAs in 2008: Accenture, A.T. Kearney, Bain & Co, BCG, Booz Allen Hamilton, Deloitte Consulting, Ernst & Young Business Consultancy, IBM Consulting, McKinsey & Co, ZS Associates (Oliver Wyman replaced from 2007) The consulting industry has been growing at phenomenal rates for the last 20 years, becoming a $100 billion industry. After a temporary slowdown at the start of the new millennium, the sector continues to hit new highs in 2008. The consulting market remains in the middle of a boom phase, though the geographic focus is shifting away from developed economies to Asian, Latin American, Middle Eastern and Eastern European markets. Responses to the QS Topmba.com International Recruiter Survey 2008 suggest that larger strategy consulting recruiters are actively seeking many new people in these 12 months. In addition, the professional services, technology and outsourcing firms are re-staffing their strategy departments – many of which were decimated in the downturn. KPMG, Ernst & Young and Cap Gemini are all actively expanding their business advisory/business consultancy division. Overcapacity in 2001 saw an MBA hiring cut back. An 18% (22%) increase in demand for MBAs in 2008 places demand well ahead of 2001 levels and, based on current forecasts, demand will continue to grow. QS Global-Workplace (www.global-workplace.com), has seen the number of jobs listed on its site grow throughout the past three years. Tom Harrison says: “In 2007/08, over 2,000 consulting jobs were listed on the site. Consulting job listings feature all the major consulting firms as well as many smaller firms.” All the leading firms have returned to aggressive MBA hiring. In particular, the big strategy players like McKinsey, BCG, Accenture, Bain, Booz Allen, and Roland Berger are recruiting actively. Accenture historically hires between 10,000 and 17,000 people globally each year. Outsourcing remains the fastest growing segment of consulting services, accounting for 65% of Accenture's new business. IBM Consulting is also a large player in outsourcing consulting projects and is benefiting from this trend. For this type of consulting, Sej Butler of IBM UK looks for “specific pre-MBA skills - either deep industry and process knowledge or knowledge of solution areas.” There is evidence that these consulting firms are struggling to source sufficient MBAs for their developing economy practices, in particular in China. Corporate consultancies are experiencing strong growth in MBA hiring. For example, Siemens Management Consulting specialises in technology and business outsourcing. Dell has 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 today is the world's largest provider of consultancy services, by revenue and employment numbers. There is also a growing number of small specialist consultancies looking to hire MBAs. Chris Lavin of Sierra Systems, Canada finds MBAs the perfect talent pool: “They have a strong management toolkit that is the basis for good management consulting. And maturity and analytical skills to interact with senior clients.” 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.

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6.3.2 Financial Services Top 10 Financial Services Recruiters of MBAs in 2008: Bank of America, Barclays, Citibank, Deutsche Bank, KPMG, Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley, OCBC Bank (GE Commercial Finance, Ernst & Young, UBS replaced from 2007). Almost all investment banks actively recruit MBAs. The credit crunch has created fears of huge cut backs in MBA hiring in the financial services, but despite redundancies among experienced bankers, entry level recruitment has remained robust in 2008. Diane Morgan, Careers Director at London Business School sees: “a pretty good outlook. All the banks are coming on campus and hiring similar numbers to last year.” Claire Hudson of the Career Service at Manchester Business School agrees: “Banking intern opportunities for summer’08 are as strong as ever.” Dr Simon Taylor, Professor of Finance at Cambridge’s Judge Business School says: “Much of the bad news is out there. The banks are still robust and have been able to refinance to strengthen their balance sheets.” However, he cautions that: “the situation could take a turn for the worse if the US economy slips into recession.” This demand for MBAs collapsed during 2001-2003. Goldman Sachs, Morgan Stanley and others cut MBA hiring by up to 80% in some offices. 2008 shows a completely different environment with demand stable +7% (23%). Sarah Thomas, Head of MBA Recruitment at Standard Chartered says: “MBA hires are critical to building our leadership”. Those banks most exposed to Asia, Russia and Brazil are continuing to perform well. Those banks most exposed to losses from the credit crunch are making cut-backs and do expect some reductions in MBA hiring in 2009. Overall, a -9% cut back is expected in banking hiring numbers next year. Belinda Regan of Fidelity International prioritises MBA hiring because of: “intensive training from business schools and the fact that candidates are usually very motivated to commence a new career.” So what turns a bright new business school graduate into a successful banker? According to Angela Cassidy, a recruiter at Deutsche Bank, her firm looks for: “High achievers who are both focused and motivated and who can demonstrate a good understanding of our industry. We also want people who are bright and energetic and not afraid of working hard. We don’t just look at what an individual has achieved in the workplace, but also take into account what they have been doing outside their academic activities.” According to Anshu Jain, Head of Global Markets at Deutsche Bank, they will hire over 150 MBAs in the next 12 months making them Germany’s largest MBA employer according to Handelsblatt, the business newspaper. Many people associate investment banking with mergers and acquisitions, but most of the top banks look to recruit MBAs into global markets (sales and trading securities, fixed income and derivatives), managing assets, structured finance, corporate finance and increasingly on-and-off balance sheet hedge funds.) There are also many back office positions in risk, financial control and technology. According to Dr Taylor, the areas likely to see a short-term cut back in MBA hiring, include credit derivatives, M&A, private equity, and asset management. Opportunities in credit derivatives, which are the source of current credit problems, are likely to see big cutbacks. Market risk & compliance departments may see increased MBA hiring as banks seek greater security and control of risky investment classes. It is not just banks which recruit MBAs into financial services. GE Capital is now one of the biggest recruiters of MBAs worldwide. American Express is also emerging as a major player.

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Insurance companies steadily hire MBAs, a trend that picked up noticeably in 2006 and has continued in 2008. In the US there are a number of insurance companies that recruit ten or more MBAs each year such as AIG, Travelers, CIGNA, and Liberty Mutual. A new feature in recent years has been the entrance of hedge funds, private equity and venture capital houses into MBA recruiting in significant numbers. In the past they have focused on more experienced MBA alumni, recruited through a network. Today, they are recognising the need to recruit younger MBA graduates to meet the growing market opportunities. Dr Taylor believes: “The opportunities for MBAs in the banking sector could still cool slightly in 2008/09, but the prospect is for strong long-term growth.”

6.3.3 Technology Top 10 Technology MBA Recruiters in 2008: Amazon, Avaya Communications, BT, Dell, Google, IBM, Intel, Microsoft, SAP, Vodafone. (Compusermann, PTC, Yahoo replaced from 2007) Recruitment of MBAs into technology companies bounced back between 2005 and 2008 following a post-millennium bloodbath, especially on the US west coast. The technology sector reports a modest 5% increase in growth this year, after a robust 29% growth last year. Avaya Communications is one of the largest recruiters of MBAs in the technology field, riding the wave of mobile phone growth in Asia. Telecommunications companies such as British Telecom and Vodafone are very active. Some software companies, like Microsoft and Oracle for example, have increased their intake. Chloe Chometon of Oracle Ireland looks for MBAs with: “International exposure [and] structured thinking.” Tom Koziki says: “The high-tech corridor on the West Coast remains vibrant.” Asian technology recruiters are hiring actively in China, Taiwan and Korea. Though we still lack many Chinese recruiter respondents in the research, Korea is an example of the dynamism of technology in Asia. According to Jay Kang of Maekyung business newspaper, the big technology companies expect significant growth in MBA hiring in the long-term. However, the short-term outlook for the technology sector is less certain. US recruiters in particular are “re-assessing their MBA needs in light of the high compensation packages being commanded by MBAs in North America,” says Dan Beaudry. Hence demand is forecast to stall next year as these recruiters shift their focus to engineering and technology graduates. These companies may well be waiting for some downward pressure in MBA compensation levels before they re-enter the market aggressively. 6.3.4 General Industry Top 10 Industrial MBA Recruiters in 2008: BP, Eastman Chemical, Exxon Mobil, General Electric, General Motors, Hilti, Ingersoll Rand, Johnson & Johnson, Procter & Gamble, Whirlpool (Ford, LG, Philip Morris, Unilever replaced from 2007) This broad grouping of industries covers, aerospace, automotives, chemicals, logistics, manufacturing, steel and, for the purpose of this report, consumer goods and retail. Each

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industry reveals individual trends, but a common theme has been a steady increase in MBA hiring for the last three years with the 2008 survey reporting an increase in hiring of 14% (24%). 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. More and more industrial companies are fully embracing globalisation and understand that MBAs represent an essential pool of international managers who are capable of working in diverse cultures and business situations. In particular, multi-national supply chains and procurement require internationally-minded, multi-lingual managers, making MBAs a natural talent pool. As a result, the industrial sector is steadily increasing its share of MBA hiring and will actually overtake the financial services sector in 2009, based on current trends around the world. 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 programs have been the norm for more than 20 years. Internationally-minded European companies, like Siemens and Daimler, have established MBA entry programs. However, the automotive industry has cut back MBA recruiting considerably in 2008. Sangeeta LaForges of General Motors North America looks for: “More strategic, globally minded MBAs, but finds many are shopping the market for the best deal. Finding the right candidate that truly wants to work for your company is a challenge at times.” “For our purchasing function, the MBA is the prime hire, if they have relevant experience. From the start, an MBA employee is responsible for purchasing hundreds of millions of dollars in parts/products,” says Alberto Piccone of Ford. But Piccone cautions that: “The years of experience between their undergrads and MBAs have been shrinking. This limits the hiring evaluation to just a couple of jobs,” he says. The energy sector has reported the largest increase in MBA recruiting within industrials. There seems to be two drivers of this trend. First of all, the search for alternative energy sources is attracting many MBAs into smaller, entrepreneurial organizations. Secondly, as Graham Hastie of London Business School reports: “Many of the big oil companies will need to replace their senior management over the next ten years as they come up for retirement. These companies have identified that they need new MBAs for their leadership programs and are offering exceptional packages to get the best people.” Exxon Mobil and BP are among the largest MBA employers in the energy sector. Consumer goods companies have been committed to MBA hiring in the US for many years. Lever Brothers traditionally hires 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 both local operations and head offices of such companies as Diageo, P&G, BAT and Coca Cola to hire MBAs. 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 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.” But there is a downside to such a "hot" MBA job market. First of all, many MBA employers will be disappointed and not attract the talent they are seeking. Neil Currie of Johnson & Johnson says: “I recruit international MBAs - candidates are often reluctant to share vital information about their personal and career objectives and we waste their time and ours going through several

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interviews on campus and on site, making offers only to discover that they want to work in consulting.” Secondly, there is a danger that we return to the bad old days, when MBAs had a reputation for arrogance, which tarnished their potential contribution. A consistent message from recruiters in industry is that they are having to look outside the top-tier business schools to find the talent they need. However, they are almost all reporting success in their search. 6.3.5 Pharmaceuticals and Healthcare Top 10 Healthcare MBA Recruiters in 2008: Astra Zeneca, Cigna Healthcare, Cytyc Corporation, Eli Lilly, Genentech, Glaxo Smithkline, Johnson & Johnson, Novartis, Pfizer, Schering Plough. (Merck replaced from 2007) 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. Cytyc Corporation has joined this group of active MBA recruiters within the healthcare sector, seeking over 30 MBAs in 2008. Merck has had a fairly traumatic year in terms of patent losses and has significantly cut back MBA hiring. 6.3.6 Small Enterprises and Entrepreneurship The internet revolution has given many MBAs the confidence to start their own business on graduation or to join smaller entrepreneurial organizations. Some schools are reporting that 10% or more have chosen to do so. Colleen Clark of Eastern Mountain Sports says: “MBAs bring business acumen, creative thinking and new knowledge (technology, people, branding and product development) to a business. They cut down on lag time between start up and ROI.” Karena Zornow of Drive thru Designs in the US reports that MBAs: “have proven to be smart, ambitious, driven, quick learners, adaptable leaders. These qualities enable them to progress quickly throughout the organization in cross-functional roles to make a real impact.” 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 exceed this level. Schools reporting particularly high levels of students starting their own businesses include: The Judge Institute, Cambridge University, EM Lyon, Instituto de Empresa, Manchester Business School, and Tanaka School Imperial College London. A growing number of MBAs are interested in working for small medium 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.

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6.4 Functional Roles Figure 8 reveals that over 14% of responding employers offer roles in consulting which has

jumped four places to become the most popular job function on offer to MBAs in 2008. Finance (other) and finance (advisory) have dropped from their top spots of the last few years. Opportunities in e-commerce have also rebounded strongly in 2008, to levels not seen since the dot-com boom of 1999, with 13% of employers offering opportunities to MBAs in this field. Sales and business development also records the highest level of response ever in our survey, with 11% of employers seeking MBAs for this role. General management and marketing follow at 10% each. Functional Roles Offered to MBAs in 2008

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 8: Functional Roles Offered to MBAs in 2008 6.5 Experience Levels MBA recruiters consistently show a strong bias towards candidates with three to five years experience, targeted by 52% (60%) of employers, but there is a trend towards recruiting younger people. Graduates taking an MBA with less than one year of experience are targeted by only 5% (5%) of employers. These inexperienced candidates typically accept lower paid graduate level positions. MBAs with one to three years of experience are targeted by 29% (28%) of employers. MBAs with five to eight years of experience are targeted by 25% (29%) of employers. MBAs with over eight years of experience are targeted by only 5% (4%) of employers (Figure 9). This implies that this experienced group fall outside the needs of mainstream international MBA recruiters as experienced professionals are more likely to use a search company to identify suitable opportunities.

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Preferred Levels of Experience for MBAs

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 9: Preferred Levels of Experience for MBAs

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6.6 Skills Wise MBAs will seek opportunities to develop skills that are important to recruiters. Figure 10 demonstrates how "soft skills" such as interpersonal, strategic thinking, and leadership are more important than finance abilities, academic success, and knowledge of IT. According to recruiters around the world, business school graduates are still not meeting expectations in terms of their soft skills. MBAs have for many years met or exceeded expectations in terms of hard skills like; finance, accounting or academic ability. There has been a long-standing short fall in terms of leadership skills and interpersonal skills, which is apparent year after year, in this research. 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. The chart below is based on 2007 research as this question was not updated in 2008.

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

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 10: Key MBA Skills

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7. MBA Salaries and Compensation

7.1 Global trends in 2008 The outlook for MBA salaries seems to be stabilising overall after several years of strong growth. In 2008, average MBA salaries in China and India jumped by 50%. By comparison, US-EU average MBA salaries have risen just 2% to $95,200 ($93,400), still well in excess of the pre-downturn levels of 2001. The average reported bonus is a sizeable $26,875 ($24,100), with banks/financial services companies still leading the bonus field with an average of $38,500 ($46,400). Since 2002, MBA salaries have jumped 30% exceeding the levels reached before the dot.com crash of 2001. Chris Higgins, Associate Director of Career Services at Wharton confirms: “We continue to see salary increases across industries.” This increase reflects increased competition for the top talent, especially across borders, offset by the slow-down in demand in the highpaying financial services sector. The low overall increase in salaries of just 2% this year reflects a recent trend amongst employers to expand the pool of target business schools, seeking MBAs from less well known schools to keep down starting salaries. Recruiting from a larger number of business schools than in the past – looking beyond the traditional top-tier business schools - has been a common approach adopted by employers around the world in recent years. Tom Koziki observes: “Companies have learnt from the dot.com era and are showing restraint in what they are willing to pay for new MBA hires, preferring to offer strong performance related incentives.” By contrast, Asian MBA recruiters have less local choice of business schools and many are repatriating candidates from US and European business schools, helping to explain the big jump in the average of Chinese and Indian MBA salaries this year.

Average Salaries in US & Europe 1996-2008 ($)

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 11: Average Salaries in US & Europe 1996-2008 The levels of global MBA salaries tend to be cyclical reflecting economic trends. The 1990s was a decade of uninterrupted economic growth resulting in ever-increasing salary and bonus

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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 to almost the 1998 pre-dot.com boom level (Figure 11). In 2008, average consulting base salaries in North America and Europe at $101,500 far exceed the levels of 2000/2001. Consulting offers the highest MBA salaries, slightly ahead of the technology sector and well ahead of banking and general industry. Banking salaries for fresh MBAs revealed a wide range, reaching as high as $155,000 among this year's respondents and as low as $20,000 in some emerging markets. However the mainstream investment banks all reported very similar salaries in the ranges of $95-105,000. Consulting salaries for fresh MBA hires reached a high of $155,000 and a low of $25,000 in emerging markets. These salaries may slacken off, given the forecast reduction in demand in banking over the next few years. There seems to be a relationship between MBA salaries in all sectors, including general industry and technology sectors. As firms compete for talent, they adjust salaries. As the chart shows, during the dot.com boom of the late â&#x20AC;&#x2122;90s, technology salaries were consistently 10% above industry salaries. In the subsequent technology crash, industrial salaries jumped ahead, but have now slipped again as technology firms around the world start hunting for talent. As mentioned earlier in this report, many technology companies are currently reassessing the packages they are offering to MBAs and some reductions look inevitable in 2009.

MBA Salaries in US and Europe by Industry 1996-2008 ($)

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 12: MBA Salaries in US and Europe by Industry 1996-2008 Figure 12 tracks MBA salaries in the US and Europe from 1999 to 2008 by key MBA recruiting

sectors. This chart reveals the long-term global increase in salaries in consulting, finance, technology and general industry, since 1993.

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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. This section looks at average total compensation offered by sector across North America and Western Europe. In recent years, overall MBA earnings (salaries and bonuses) have been on the increase in almost every country in the world. As demand for MBAs has surged, recruiters have competed on total earnings to secure their preferred candidates. In 2008, the average reported bonus is a sizeable $26,875, with investment banks leading the bonus field at an average bonus of $38,500 ($46,500). But telecoms/high-tech and consulting have overtaken financial services in offering the biggest starting packages in 2008. Technology companies reported the highest starting salaries for new MBAs in this year’s survey. They also reported large bonuses. The compensation offered by consulting firms has an average of $129,000, whilst telecoms/high-tech report an average of $136,000. Salaries in metals and mining were also much higher this year than in any previous year, reflecting the boom which this sector is experiencing. All sectors have average total compensation ranging between $100-140,000. Recruitment/HR agencies have posted the highest average compensation at $139,000 with many of these companies working for the banking or technology sectors. We have already noted that the volume of placements agencies expect to make in 2009 will drop significantly and this may also see total compensation figures drop as they switch attention towards lower paying clients. Tom Harrison observes: “Some companies have seen an opportunity to grab the best talent whilst the banks are undergoing a period of uncertainty. With many companies still hiring MBAs aggressively, there remains some upward pressure on total compensation in many markets, though to a lesser extent than in recent years. It remains possible that we may see some deflation in MBA salaries in 2009.”

Average MBA Earnings by Sector 2008 - Salaries & Bonuses in W. Europe & US ($)

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 13: Average MBA Earnings by Sector 2008 Figure 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

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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. 7.3 Bonuses Figure 13 also reveals the average reported bonus, which range between $0 and $40,000 with a

sizeable average $26,875 across North America/Western Europe. Banks are still reporting the largest average bonus at $38,500. While other sectors will find it hard to compete with these figures, energy, manufacturing and telecoms/high-tech are offering bonuses in excess of $30,000 probably caused by their need to compete with banks and consultants to attract the top talent. The consulting sector is offering slightly lower bonuses of $28,000 on average. Banking bonuses have tended to be volatile in the past and it may be that if this sector reduces bonuses in 2009, the averages in other sectors will also fall in 2009, even if salaries remain fairly stable. 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 is 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 American recruiters reported an average of $91,283 ($89,500), Western European recruiters reported an average of $99,156 ($97,500) (this is the third year European MBA salaries have significantly exceeded North American salaries, though the figure has been boosted in dollar terms by the weakening dollar exchange rate). Eastern European recruiters reported the lowest average of $63,675 (this figures excludes low paying countries such as Turkey and Greece which were included in the 2007 report). Latin American recruiters reported a significant jump in average salaries at $70,465 ($69,700), though there are wide variations by country within Latin America. Asia-Pacific recruiters (excluding India and China) reported an average of $71,500 ($71,200), but this belies a 50% increase in average salaries reported by recruiters in China and India. These regional averages are shown in Figure 14.

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MBA Salaries by Region 2008 ($)

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 14: MBA Salaries by Region 2008 Average salaries have risen across the board globally, and some level of convergence is apparent. The average salary reported by North American and Western European recruiters was $95,200. 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. Global recruiters very much kept in line with this benchmark figure, with very few deviating by more than 15% above or below this figure. One exception was a global consultancy which is offering MBA salaries of $155,000 in all regions of the world in an apparent attempt to outbid all competition for top talent. Other consultancy firms have not followed suit and it seems unlikely these sorts of offers will be sustained. There is a significant differential in salaries across regions between offers made by local and international employers. In fact, in every region of the world, including North America, international recruiters are paying higher salaries on average, than their domestic counterparts. In Asia, both European and North American employers pay more than their Asian counterparts. In Europe, it is the North Americans who pay the most. In North America, by contrast, it is the European companies who pay the most.

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MBA Salaries by Region Comparing Local Employers against the Average ($)

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 15: MBA Salaries by Region - Local Employers vs. Average The trend towards MBA salary convergence continues around the world. The gap between Asian and North American salaries remains roughly 20% (19%) (though bonus figures in Asia are much lower than in North America). Latin American salaries are 21% (20%) lower than those in the US. As these economies grow more rapidly than their Western counterparts, salaries around the world are likely to continue to equalise. The time trend information in Figure 16 demonstrates that there is an overall long-term trend towards convergence in salaries.

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MBA Salaries across Regions 1996-2008 ($)

Sourc e: QS TopMBA.com International Recruiter Survey 2008 Figure 16: MBA Salaries across Regions 1996-2007 Note: Asian salaries exclude China, India &Thailand companies that offer much lower MBA salaries when converted to dollars. 7.5 Strategies for MBA Salary Analysis The downside to such high salaries is that some employers become disaffected with MBAs, or have excessive performance expectations relative to non-MBA staff on lower salaries. Patrick Smith of Bank of America believes many MBAs “have unrealistic expectations about starting salary and speed of advancement.” Mitch O’Brian of Emissary Pharma in Australia makes a hard hitting assessment: “MBAs often come with an arrogance that jobs will fall in their lap and false expectations. I would like to see more emotional intelligence taught and realistic career counselling provided.” In 2008, as in 2007, more and more employers are looking to recruit MBAs from non top-tier business schools having found salaries and candidates to be unapproachable at the elite institutions when an ever-increasing number join strategy consultancies or investment banks. Mesha Mott of Mead Westvaco USA confirms: “depending upon the universities/reputation and the skills sets required, salary requirements may be misaligned with what the candidates actually bring to the table.” Such recruiters have reported greater success looking beyond the traditional pool of schools. The message for newly graduating MBAs is not always to chase the highest short-term salary offer, but to look for an organization which will lay the foundations for a successful long-term career – otherwise campus recruiters will start looking elsewhere. 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

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salary packages across regions â&#x20AC;&#x201C; the real, versus the nominal wage a company and country offers. The Organization for Economic Co-operation and Development (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 comparative 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. Another example is Hungary's where the purchasing power is 55% higher than that of the US. This means that an MBA earning 44% less in Hungary will still enjoy a higher standard of living than a US graduate.

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7.6 Regional Focus 7.6.1 North America Within regions, there are substantial differences in salaries offered across industries. Figure 17 shows the salaries offered in different industries within the US and Canada. Salaries in the US are consistently slightly higher than those in Canada. Consulting offers the highest salaries in the region, but in other regions manufacturing, energy, banking and telecoms follow closely. In North America, it is IT/computer services and the public sector which offer the next highest salaries. MBA Salaries in North America by Sector in 2008 ($)

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 17: MBA Salaries in North America by Sector in 2008

MBA Salaries in North America by Country Regional Headquarters of Recruiter

Average Salary 2008 ($)

USA

90,972

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 18: MBA Salaries in North America by Country 7.6.2 Europe Western European salaries have been relatively stable in 2008, after a 7% jump in 2007, driven by a strong employment market, but also by the weakness of the US dollar to the Euro and UK Pound. In reality an MBA graduate today will face similar prospects on either side of the Atlantic. Salary levels in financial services and consulting are very similar in both regions as are technology salaries and those in general industry.

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Figure 19 compares MBA salaries in companies recruiting in Western Europe and Central, Eastern and Southern Europe, segmented by the location of the recruiters' headquarters. There is great variation in salaries. German, Italian and UK recruiters paid more than their Greek, Hungarian and Romanian counterparts surveyed. (The French data may contain a bias due to a high proportion of local consulting firms in the sample).

MBA Salaries in Europe by Country Regional Headquarters of Recruiter

Average Salary 2008 ($)

United Kingdom Ireland Belgium France Italy

119,567 110,715 102,917 98,173 91,783

Germany

88,438

Netherlands

89,462

Spain

86,536

Russia Romania

66,305 36,905

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 19: MBA Salaries in Europe by Country 7.6.3 Asia-Pacific Asia-Pacific salaries have jumped by a massive 50% this year in India and China. However, the other higher paying advanced economic regions of Asia-Pacific - Singapore, Japan, Korea, Taiwan and Australia â&#x20AC;&#x201C; have seen MBA salaries remain stable (Singapore shows a slight drop to $82,360 from $84,950). From 1996 to 2008, average salaries for MBA graduates have risen an impressive 70% in US dollar terms. The MBA battle for talent seems to have shifted to this region and upward pressure on salaries is expected to continue in 2009, especially in the lower paying markets like China and India which are also experiencing high growth and inflation.

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MBA Salaries Asia: Excluding India & China ($)

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 20: MBA Salaries Asia Figure 21 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 and India with those in the higher cost regions of Singapore, Japan, and Hong Kong.

MBA Salaries in Asia by Country Regional Headquarters of Recruiter

Average Salary 2008 ($)

Singapore

82,360

Hong Kong China

71,250 55,770

Taiwan

45,000

India

37,500

Thailand

<25,000

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 21: MBA Salaries in Asia by Country

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Comparing Average Salaries in Asia ($)

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 22: Comparing Average Salaries in Asia 7.6.4 Latin America Average Latin American MBA graduate salaries have increased by 40% from 1996-2008, to $70,450 ($69,600). In Latin America, a series of currency devaluations negatively impacted on the reporting of MBA salaries in US dollars, holding back the figures in 2003-5. But as currencies strengthen, their dollar values are now catching up with other regions. Figure 23 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 regularly exceed $70,000 in the future, with some upward pressure expected to continue. However, volatility is 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. The dot.com boom experienced by the rest of the world had negligible impact here. 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. The 2003 Argentine devaluation, against a backdrop of recession and hyperinflation, was a temporary setback. Since then, 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. There are further encouraging signs for the region in 2008 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.

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Comparing Average Salaries in Latin America ($)

Source: QS TopMBA.com International Recruiter Survey 2008 Figure 23: Comparing Average Salaries in Latin America Figure 24 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.

MBA Salaries in Latin America by Country Regional Headquarters of Recruiter

Average Salary 2007 ($)

Colombia Mexico

78,253 78,200

Brazil

70,000

Venezuela

62,500

Argentina

42,500 Source: QS TopMBA.com International Recruiter Survey 2008

Figure 24: MBA Salaries in Latin America by Country

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8. Appendix – Some participating companies

Argentina Aeropuertos Argentina 2000 Assist Card International Baufest Bayton SA Bumeran.com El Rey del Cartucho Paradigma Sociedad de Soluciones Radio Victoria Fueguina Rousselot Argentina Stracienta Corp. Tech Mind TGS Tiens Group International Austria Egon Zehnder International Azerbaijan Pedersen & Partners Belgium BASE Eli Lilly Fortis Greenwich Consulting Michael Page International PricewaterhouseCoopers Canada CIBC Wood Gundy Deloitte Department of Energy Kids Futures Mercer Management Consulting Chile Accenture CANAAN Empresas BDS - Terracorp L'Oréal Travel Club China Chem International CommBank Management Consulting Dell Dragon EXecutive POD Management Consultants SgT Colombia Bogofoods

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Fisconsejo Czech Republic Pedersen & Partners Finland Nordea Bank SamiCon & Partners France Emerging Comunication Merck & Co Germany Deutsche Post World Net / DHL Porsche Henkel Hypo Real Estate Holding Interpool Leitz TRUMPF Volkswagen Greece Diners Club PricewaterhouseCoopers Procter & Gamble Hong Kong Alpha Zeta Ltd American International Assurance American International Group Chevron China Optotech Company China Overseas Land & Investment Deutsche Bank DHL Logistics DYK Associates General Mills Global Fortune China Hamon Investment Group Jada Toys Co LRT Consulting Microsoft National Semiconductor Peace Mark Hungary Boyden Epicor Software Corporation Hudson Global Resources Kornferry International Microsoft

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Procter & Gamble Satyam Computer Services Solvo Biotechnology Iceland Atlantis Group India ZenSar Technologies Italy Indesit Company Merck Sharp & Dohme Value Partners Wind Telecomunicazioni Spa Japan JPMorgan PRTM Liechtenstein Hilto Corporation Lithuania Euromonitor International Mexico Asturer Elektra y Banco Azteca Embotelladoras ARCA Grupo American Industries Grupo Calidra Grupo Finatrade Grupo Nestle Home Depot Ingenium Johnson & Johnson Kelly Services Kornferry International Medica Integral Merck Sharp & Dohme Scotiabank Sterigenics Netherlands General Electric Limbourg & Partners Mercuri Urval Triceps Peru El Guanaco Azul Poland Boston Consulting Group Chronos Consulting Warta Glass Portugal Banco Finantia Boston Consulting Group

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Heidrick & Struggles McKinsey & Company Russia British American Tobacco Russia Eli Lilly Nasta Insurance Polair Troika Dialog Singapore Accenture Allianz Global Investors Singapore Limited AXA Asia Regional Centre BP Cisco Security Hay Group Pte Ltd OCBC Bank Synovate Pte Ltd Slovakia City University South Africa Burlington Strategy Advisors Calibre People Cape Venture Partners Capital Outsourcing Group Deloitte Frost & Sullivan HR Solutions ITP SA Human Resources Holdings Lwazi Lams Network Recruitment Paracon Peloentle Quiglies Rand Personnel Renault South Standard Bank South Korea Doosan Heavy Industry & Construction Samsung Fire & Marine Insurance Spain Sun Bodegas Melgosa Circulo de Progreso El Cortijosa Ergodecor EuroPraxis Consulting Ficosa International Grupo BBVA Grupo Intermark

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Hernest Consulting ICEX Isolux Mafre Multicanal Mundo Edificio Novartis Oticon Sun Planet Toldos Conil Switzerland Adecco Finance & Accounting BBVA Briggs & Stratton Credit Suisse Medtronic UBS Taiwan HTC Corp. Ukraine AES United Kingdom A.T. Kearney Amazon.com American Express AMX Analysys BT Retail Centre People CHEP Citigroup CVO International Derivatives Appointments Devine Consulting Euromonitor International Fraser Dawson & Co GE Healy Hunt IBM Business Consulting IMI Intel Corporation Inzenka JPMorgan Eli Lilly Marakon Associates Mayfair International Merrill Lynch Michael Page Odgers, Ray & Berndtson PRTM SABMiller Shell International Société Génerale Tesco

Thomson Legal & Regulatory Unilever United States A.T. Kearney Procurement Solutions Abroad China Advisory Board Company American Airlines Analysis Group AOL Apollo Group April International Avaya Bain and Company Balakrishnan BDO Seidman BearingPoint Bechtel Corporation Black & Decker Booz Allen Hamilton Bose Corporation Boston Scientific Corporation California Franchise Tax Board Calvert Cambridge Search Campbell Soup Company Chemonics International CIGNA Cisco Systems Connelly Billiard Manufacturing Corporate Executive Board Deloitte Consulting Douglas C. Lane & Associates Driscoll Strawberry Associates Duff and Phelps DuPont E & J Gallo EDS Ernst & Young Euronet Worldwide Executive Recruiting Solutions Fannie Mae FedEx Ford Motor Company Friends of the Sea Otter Frito-Lay Garden State Philharmonic Gartner

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GE Genentech Goldman Sachs Grosvenor Fund Management Harris Williams & Co. Hasbro Hewlett Packard Hilti Hitachi Consulting HomeBanc Mortgage Corporation Honeywell IBM ING Intel Corporation International Trade Development Center Johnson & Johnson JPMorgan Kennametal KPMG Kraft Foods Latin America Lego Systems Lehman Brothers Liberty Mutual Group Lockheed Martin L'Oréal M&T Bank Corporation Merrill Lynch Microsoft Corporation Miller Brewing Company MTG Management Consultants National Capital

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National City Neenah Paper Nestlé New World Pasta Nissan Northwest Airlines ON Semiconductor PepsiCo Pfizer Philips Electronics North America PricewaterhouseCoopers Pulakos & Alongi Raytheon Company Search America Select Comfort Corporation Sigma SLM Corporation Société Génerale Sprint State Farm Insurance State Street Bank & Trust Stax Inc. Sun Microsystems SunTrust Bank Target Corporation Texas Instruments Textron Financial The McGraw-Hill Companies The Motley Fool TowerHunter Executive Search Toyota Motor Sales Trammell Crow Company

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U.S. Department of State UBS Ultimate Placements Unilever Univision US Airways Vanguard VEGA Virtua Research Wachovia Securities Walbro Engine Management Wal-mart Wellington Management Company Whirlpool Corporation World Bank ZS Associates Venezuela Banco Guayana C.A. Vita Compuserman International Corporacion Clorox de Venezuela Farmatodo Galeno Quimica Huawei Technologies de Venezuela Inter Con-Vigilantes 24 Johnson & Johnson Network Consulting Group Realnatura Sedna-tech Yugoslavia Neumann International

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QS Research

QS has undertaken surveys with a view to the generation of primary research since 1990 and, although the QS TopMBA.com International MBA Recruitment & Salary Report was the first, there are various other projects with which QS is deeply involved, including: QS TopMBA.com International Recruiter Survey The principal source of data for this report the QS TopMBA.com International Recruiter Survey also yields information resulting in the Global Top 100 Business Schools and Specialisations Report. TIMES HIGHER â&#x20AC;&#x201C; QS World University Rankings In collaboration with The Times Higher, QS compiles this prestigious annual study of comparative international university quality. The rankings are aggregated from a number of separate indicators including various quantitative measures as well as the results of international surveys of both academics and employers. QS TopMBA.com International MBA Applicant Survey In over a decade of operating the QS World MBA Tour, QS has developed a unique position to gauge and understand the opinion of MBA applicants around the world. Each year, in excess of 5,000 prospective MBA applicants respond to our survey, providing us with a unique insight into their motivations for pursuing a course, their criteria for selecting a school, their opinions on career choices and preferred destinations and much more. QS TopGradSchool.com International Masters & PhD Applicant Survey Similar in nature to the MBA Applicant survey, the Masters & PhD Applicant Survey examines the outlook of the growing audience of people considering international postgraduate study other than an MBA. Of particular interest in this context, is how certain subjects vary by nationality and other demographics. Bespoke Research Projects As a result of all of these projects, QS has developed expertise, audiences and valuable tools that when combined can respond to a wide range of individual research needs. In the past QS has delivered benchmarking reports for international universities, recruitment trends data for international employers and an enormous range of individual analyses to support articles and features in major media around the world. QS is equipped to respond to almost any specific research need in the fields of education or career development. For more information on any of our existing research services, or about your own requirements please contact Ben Sowter, Head of Research on ben@qsnetwork.com or +44 (0) 20 7284 7213

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MBA Salary and Recruitment 2008