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A rocky economy means more executives are heading back to business school — even if their companies won't pay for it.
Alan Rappeport, CFO.com | US
June 13, 2008
In a sour economy it might seem natural for managers to chain themselves to their desks, fearful of losing their jobs or making it obvious that the company can get on in their absence. In fact, though, this has been a ripe time for executives to branch out and pursue an executive MBA, according to The Executive MBA Council.
Despite the econmic malaise that settled in last summer 2007 applications to EMBA programs were up by 25 percent from 2005, according to the council's latest survey. "When economic times are tough, people want to get the best skills they can get," says Michael Desiderio, the organization's executive director.
EMBA programs take an average of 20 months to complete, scheduled so that students can continue working; schedules vary widely, from two days every other week, to one day a week, to multiple days across a month, among other variations. Typically some work is done remotely and some in the classroom. Students average about eight years of managerial experience before embarking on an EMBA.
The programs provide broad management training and the chance to develop a new area of expertise. The average cost is about $58,000, but top programs like the one at the University of Pennsylvania's Wharton School can run up to $160,000. An EMBA is often a solid investment, with salaries jumping an average of 21 percent upon completion, according to the council. Companies gain a return on their investment within an average of 23 months, and students who fund their own studies see a return in 45 months, on average.
Not surprisingly, companies are proving more reluctant lately to foot the bill. The survey found that 33 percent of students paid their own way in 2007, up from 25 percent in 2003. Only 34 percent of companies now offer their employees full tuition reimbursement, down from 40 percent in 2003.
Although EMBA programs are not geared toward job-hoppers, the increase in students paying for the courses themselves has coincided with a boost in career counseling and job-searching opportunities. The council found that where in 2004 18 percent of executive programs offered campus interviews with prospective employers, last year 31 percent did so.
"People will take any advantage that they can get," Desiderio says.
One advantage EMBAs are taking is the chance to get some time overseas. Many programs offer or ask students to spend time studying on internatinoal campuses. The University of Chicago Graduate School of Business, for example, requires students to spend a week studying in Singapore and a week in London. In 2006, 62 percent of the 312 programs that are members of the council required students to take an international trip. China was the most popular destination.
"It's no longer that people are just outsourcing manufacturing jobs to Asia," Desiderio says. "You have knowledge workers there now."
With programs more spread out and telecommunications rapidly improving, some programs are scaling back the amount of time students are required to spend in the classroom. As of 2006, 43 percent of programs had replaced classroom hours with some form of distance learning. This was especially popular in the Middle East and Asia, where distance learning comprised nearly two-thirds of program content.
Most top programs, however, stress the importance of spending time in the classroom and mingling with other students. At Wharton, even students who live close to the Philadelphia campus are required during weekend sessions to stay in a hotel with their classmates rather than commuting. The idea is that EMBA students learn the most from each other.
"You don't just go to hear a Ph.D. pontificating on a platform," says Desiderio. "The peer group is critical."