The 2015 FT MBA ranking is out. While business schools from the US and Europe continue to dominate the top 20 in the overall ranking, there is one area where Chinese universities have excelled – pay increases.
Graduates from the Antai College of Economics & Management at Shanghai Jiaotong University achieved an average salary increase of 160%, the highest pay hike of any school in the ranking. It’s closely followed by two other Mainland China business schools: 148% for Fudan University School of Management and 147% for CEIBS (China Europe International Business School).
Harvard Business School, which came No.1 in the overall ranking, “only” achieved an average 96% salary increase. Although, admittedly, this is already very high. What’s more, Harvard and other elite American schools still maintain their dominant positions in terms of absolute salary levels: $180.1k for Harvard graduates, $172.6k at Wharton, $170.8k for Columbia MBAs and $178.9k at Stanford. This is far higher salaries for graduates of Chinese business schools – $140.6k at CEIBS, $90.8k at Fudan graduates, and $93.7k for Shanghai Jiaotong graduates.
Why is the salary increase so large at Chinese schools? Well, it’s partly because the pre-business-school pay in China is so much lower than in US. Beijing and Shanghai have by now made into the list of world’s most expensive cities in a number of cost of living surveys, but average salaries for young professionals with only a few years’ experience at junior levels are still nowhere near Western countries.
According to the latest salary survey released by recruiters Hays, an associate at an investment bank in China earns anything between RMB500-750k ($80-120k) a year. Most MBAs go into banking at associate level, but these figures can also exceed pay for MBAs in China. Is the MBA worth the return on investment – it may be more worthwhile for Chinese undergraduates to simply start at a bank as an analyst and work their way up without shelling out for an expensive business school.
The large salary increase also reflects the shortage of talent in China currently. The business environment in China is very unique. To have a successful career there, you need a good understanding of both Western management knowledge and Chinese local culture and social issues (not to mention multiple languages). This is easier said than done, and not too many people have these skill-sets. Employers are willing to pay a premium to get such people on board.
Another factor is the proportion of international students. We might be used to the fact that there are lots of international students in US or European business schools, but it ‘s more surprising that there are 42% of international students in CEIBS’s MBA class. After graduation, a good chunk of these international students will stay to work in China. Many will seek jobs in places like London and New York, where salary levels are generally higher than in China. This further pushes up the average salary increase.
Everyone knows it’s very hard to be an MBA student at the likes of Harvard, Wharton, Columbia and London Business School. But if it’s salary increase you are looking for, don’t even try them in the first place. Come to China.