How the Pandemic is worsening an already difficult MBA market

Expert Insight

How the Pandemic is worsening an already difficult MBA market

MBA programs will require best practice program design and recruitment to survive in an increasingly challenging market. College and university leaders must invest in existing programs and should be cautious about upcoming enrollment expectations for existing programs or new launches.

The first US COVID-19 case was reported in late February, and in mid-March state governments began issuing stay-at-home orders. Across this time, employers began freezing hiring, instituting furloughs, and laying off staff. While the total impact on our economy will take months to unfold, EAB is providing initial analyses for key fields to inform program planning conversations, and will update as we learn more.

The coronavirus’s impact on MBA programs threatens a bedrock of graduate education

MBA programs were once the centerpiece of professional and adult education portfolios, serving high-caliber students who became prosperous alumni. The Great Recession and evolving student and employer demands weakened the MBA market, however, in addition to increasing competition among programs. In 2018 the MBA represented the largest single graduate degree conferrals with 117,000 MBAs granted, but total conferrals and median conferrals per program have declined in the previous five years. Program leaders today contend with years of negative enrollment pressures combined with the coronavirus pandemic and ensuing economic downturn—which raises significant questions about the sustainability of a degree found at over half the schools with any graduate presence at all.

What we know now: Declining employer demand for MBAs worsened after the coronavirus outbreak 

Immediately following the coronavirus outbreak, demand for nearly all jobs declined, but demand for positions requesting an MBA declined more dramatically than job postings generally. This comes after an overall decline in employer demand for MBAs as a qualification across the last year.

MBA demand diverges considerably from general demand trends post-Coronavirus outbreak: Demand over time for applicants with MBAs relative to all job postings

Source: Emsi Analyst

Even before the pandemic, the MBA’s outlook was concerning, with four forces straining the MBA market:

  1. Increasing competition from other MBAs and similar graduate business offerings. MBA programs and close equivalents have overproliferated, with new programs growing faster than degree conferrals. The number of MBA programs grew 14% from 2008 to 2018, while conferrals grew 11% over the ten-year span.
  2. Increasing competition from alternative business graduate offerings. Schools have added more niche business programming, such as fast-growing business analytics master’s degrees or industry-focused arts management or engineering management degrees. Growth in business master’s conferrals has been almost entirely within quantitative methods and data analytics programs; data analytics master’s conferrals grew 287% from 2008 to 2018.
  3. Decreasing employer demand for MBAs as well as graduate-level business skills more generally. Employers have posted fewer jobs requesting MBAs over time as noted above, as well as jobs requiring a graduate degree and business skills more broadly. Alternative educational options become a more acceptable way to gain desired skills if graduate degrees are losing their premium.
  4. Evolving student demands. Millennial students increasingly seek lower-cost, shorter, and outcomes-oriented programs. We would expect Gen Z students to follow many of these trends as they age into the MBA audience.

Limited personal and employer funding, in addition to the pandemic’s unique challenges for face-to-face instruction, suggest prospective MBA students will behave similarly to past economic downturns. Annual growth for MBA conferrals had peaked in 2009, indicating enrollment growth had peaked before the Great Recession, and continued to fall until 2013. Overall, MBA conferrals could be described as procyclical—increasing while the economy improves but decreasing during downturns, contradicting most of higher education’s countercyclical behavior of increasing students when the economy worsens. In the last recession, Millennial professionals began shifting away from traditional MBA programs. Instead, they enrolled in accelerated, part-time, and non-degree programs that offered affordable, just-in-time education. This created a prime market for schools that could offer affordable, quick, and flexible business education, while preserving MBAs’ selling points:

  • Cohort-based experience
  • Time for personal exploration
  • Strong alumni network
  • Selective entry and an elite student body

Lastly, MBAs historically serve working professionals seeking promotion, or to a lesser extent professionals preparing for a switch, two audience segments expected to shrink in response to the coronavirus pandemic.

What to watch: Will the MBA stage an unlikely recovery? Or will its decline worsen?

Monitoring MBA inquiries and applications will be an extremely important near-team indicator for programs. While not limited to MBA programs only, EAB’s business school partners lost application momentum in the immediate aftermath of the coronavirus outbreak. Even for schools with positive trends, professional and adult education leaders have expressed concerns about summer melt more so than in the past and offer caution.

GMAT completions as the world adapts to a new normal could be a significant predictor for future graduate business education. GMAC, the test’s administrator, released an online exam in mid-April that will be available through mid-July, but has not announced test taking levels during this time. Our experts suspect that having waived admissions tests during the coronavirus outbreak, however, many programs won’t go back to requiring the GMAT and will undercut its utility in predicting graduate business enrollments.

Announcements from top-ranked business schools will determine the short-term impact on the prestige MBA market, which may then lead to lasting effects as students further experiment with alternatives. Thus far, schools have not yet committed to a delivery format for the fall, but have allowed deferrals for students unable to attend amid uncertainty (e.g., see the announcement from Harvard Business School). GMAC surveys suggest students are more likely to defer their admission if the fall semester begins online.

What this means: MBA program recruitment is likely to be even harder in a post-COVID-19 world

MBA programs will struggle to convince prospective students of the return on their educational investment in the coming years. Two approaches can help leadership maintain existing MBA programs:


students enrolled in iMBA in fall 2019, from 114 when it launched in 2015
students enrolled in iMBA in fall 2019, from 114 when it launched in 2015
  1. Improved program design. MBA programs will need to continue to evolve to survive at most institutions. Leaders must intentionally re-design credentials to meet adult student needs, either creating innovative new MBA formats like the iMBA at the University of Illinois, or entirely new offerings like the Mini MBA at the University of Richmond.
  2. Best-in-class program recruitment. Even with well-designed programs, leaders need to reach prospective students to convince them of the improved return on their education. Outcomes-focused recruitment messages ensure adult learners hear MBA programs’ value in terms that matter to them, for example.

What’s next?

We’re continuing to watch job postings trends as well as adjustments to employment projections, and to monitor trends our partner colleges and universities are reporting. Expect updates to this analysis as we learn more this summer. We’ll particularly be watching business program application and eventual enrollment rates for indicators of what might come.

In the meantime, check our regional profiles to see what roles rank among the most demanded jobs for your area. Additionally, you may be interested in our previous considerations of clinical health programs as well as programs targeted to unemployed food service, hospitality, and retail workers.

EAB asks you to accept cookies for authorization purposes, as well as to track usage data and for marketing purposes. To get more information about these cookies and the processing of your personal information, please see our Privacy Policy. Do you accept these cookies and the processing of your personal information involved?