In an era of financial uncertainty and intense global competition, the MBA qualification, particularly in Europe, is becoming a safe haven for young entrepreneurial professionals seeking career and salary advancement.

Entrepreneurship has seen a significant rise in popularity both as a postgraduate MBA career and among business school specializations, as a result of the recession, experts believe. According to the QS World MBA Tour Applicant Survey 2009, which canvassed over 4,000 MBA candidates in 33 countries, entrepreneurship is the preferred career option for 29% of international MBA candidates, a significant increase from 25% in 2008.

Ross Geraghty, managing editor of the TopMBA Career Guide, says that “recession brings out the entrepreneurial spirit in many prospective MBA candidates. Banking and consultancy jobs are harder to find and appear less attractive. Budding entrepreneurs see this downturn as the ideal time to get their education and business plans together so their business hits the ground running when the upswing occurs.”

In 2008/9, more than half of the top 50 business schools whose graduates earn the highest salaries are in Europe. This is in contrast to the 1990s, when salaries for MBA graduates of top US schools like Harvard, Wharton and Stanford were consistently higher than their European counterparts. In 2008/9 it is European schools which take the honours with an average reported starting salary of US$106.595.

Contrary to the gloom cast over the unemployment rates among its graduates and young professionals – Spain’s unemployment has reached 17.4%, for example - Europe’s business schools continued to report good post-MBA placement figures. Last year 279 business schools reported that over 90% of their class had job offers three months after graduation and, of those, 95 were in Europe. 123 schools, 49 Europeans among them, reported average salaries in excess of $75,000 according to the latest figures on TopMBA.com/Scorecard.

TopMBA.com/Scorecard – the personalised business school ranking tool - reveals the average salaries self-reported by 350 of the world’s leading business schools. IMD, IESE, London Business School, Stanford and INSEAD reported the highest average salaries in this latest edition based on students graduating in Summer/Autumn 2008.

Table 1: Averages by region for the 50 business schools reporting the highest salaries

Source: QS TopMBA.com/Scorecard 2009

*Figures do not include the guaranteed bonuses received by many MBAs and which are more common amongst graduates of US business schools.

Small class sizes, more work experience and the strong Euro go some way to explaining why European schools are outperforming their international counterparts.IMD in Switzerland reports the highest average salary among European schools at US$129,000 (up from US$121,000 in the previous year). Janet Shaner of IMD notes that the school looks for high-achievers and their general management MBA results in many graduates “entering industrial and commercial management functions within Europe, a segment where demand is continuing to grow.”

Ashridge Business School reports an average starting salary of US$115,000 for their 50 MBA students. Amy Armstrong of Ashridge points out the more experienced age group at Ashridge where “students average over ten years of work experience and so remain in strong demand with employers, even during an economic downturn.” This shows that it’s not just the established business schools producing impressive salaries on graduation.

Comparing MBA Salaries with Expectations

MBA salaries have stood up well during the recession, but it is important for MBA applicants to remain realistic about what is achievable. QS TopMBA has also recently surveyed applicants to measure these expectations with some surprising results.

Table 2 shows the expected salaries amongst MBA applicants from countries around the world, the percentage uplift compared to current salary and the proportion intending to study outside their home country. Candidates from Japan, the USA, UK, Germany and Canada have high current salary levels and realistic salary expectations in the range of US$90-116,000, representing salary uplifts of between 58-85%. U.S. candidates primarily are looking to stay in their own country to study and benefit from the high local salary levels. Although the 12% looking to study overseas represents an increase on previous years, as they seek to differentiate themselves form the large numbers of locally educated MBAs by gaining international experience.

Table 2: Comparison of current verse expected salaries for MBA applicants

Source: TopMBA.com Applicant Research 2009

Table 2 also reveals that applicants from some countries might have unrealistic expectations. Italian applicants expect a salary uplift of 133%, with target salary level of almost US$100,000 per annum. This may be achievable for those who join top investment banks and consulting firms, however, in the current economic climate it is unrealistic for all Italian candidates to receive job offers from these elite firms.

Despite the global recession, MBA employers have continued to recruit international MBA candidates. Lord Michael Hastings, Global Head of Diversity at KPMG International, says “MBAs provide a richness of perspective that is not easy to pick up by standard study. There is huge value to MBAs.” With the prospect of economic recovery in 2010, the likelihood is that the current crop of MBA applicants will achieve their salary objectives when they graduate in 2011.