The rise of big data and the need to interpret it to gain a competitive business advantage have led many executives to reassess their options for advanced degrees. While industry long considered the generalist Master of Business Administration as the standard for career advancement, more companies are prioritizing specialized graduate-level degrees in areas like analytics and data sciences.
The reason: Companies increasingly need executives with hard skills to translate all the available data into business opportunities, rather than candidates with general management training.
In many cases, companies are seeking out people with specialized degrees because they see opportunities for them to contribute directly to the bottom line, according to Satish Deshpande, dean of Western Michigan University’s Haworth College of Business.
“They are looking for folks who come in with specialized skills and can immediately show the impact they will have,” Deshpande said. “They may be cutting positions in general management but increasing positions in analytics because big data can impact the bottom line.”
As an example, he cited an individual working in investment banking who has a master’s degree in finance.
“Companies are looking for people with special skills,” Deshpande said. “If you have an opening in finance, do you want someone who knows marketing and human resources and has taken a couple of courses in finance or someone who knows nothing but finance?”
In response to the demand from the business sector for experts in these more focused areas, the Haworth College of Business recently began offering a master’s program in information security and a certificate program in data science. The school also is starting a master’s program in data science and an undergraduate program in business analytics, areas that are going “bonkers,” Deshpande said.
“There is clearly a need for these programs,” he said.
Michigan State University’s Eli Broad College of Business was one of the first institutions in the country to offer a master’s program in business analytics, said Glenn Omura, associate dean for MBA and professional master’s programs at the Broad College.
“People are looking at different niche markets,” he said. “Right now, one of the biggest market needs is analytics.”
COMPETING FOR DOLLARS
The MBA remains a sought-after degree, but schools such as WMU and MSU are part of a national trend that finds the number of applications for admittance into MBA programs flat or increasing by a few percentage points.
According to global data from the Association to Advance Collegiate Schools of Business International (AACSB), generalist master’s degrees like the MBA grew just 2.9 percent from the 2011-2012 school year through 2016-2017.
Meanwhile, enrollment in specialized master’s degrees rose 30.3 percent in the same time frame. In the Americas alone, enrollment in specialized master’s programs increased 45 percent, according to the AACSB.
Omura said the competition for available slots in an MBA program is intense because there are only so many available openings per year.
“If you want to lead an organization, you need a well-rounded set of competencies, not just hard skills,” Omura said. “What we are finding is that companies who are recruiting MBAs are looking for soft skills and people who can lead teams and work with people. They’re looking for people with entrepreneurial skills who know how to scan for opportunities and have the ability to translate what they’re seeing into actionable programs.”
The most common criterion used to determine who gets into MBA programs is the Graduate Management Admission Test, or GMAT. Omura said every school wants to report the highest possible average scores and get the best candidates because this brings in scholarship dollars that help to offset the costs for students. That’s true even for top-ranked schools like Harvard University, which pays millions of dollars each year in scholarships to its students.
Unlike Harvard, which has a huge endowment, state schools are continually tasked with raising scholarship dollars on their own, Omura said.
“In order to be able to compete, we have to go out and raise money for scholarships because all of our funding support comes from donations,” he said. “Overall, budgets are very lean and that’s what we have to work with. We have to raise funding to support scholarships. A lot of effort and creativity is focused on that.”
To increase revenues, many schools are launching new Master of Science programs that are shorter — typically one year in duration, or 30 credits — compared to the traditional two-year MBA, Omura said.
“We create our own competition in a manner of speaking,” he said. “Every school does that to itself. If it doesn’t, competitors take away a slice. At least this way, we can keep it in the family.”
‘A DIFFERENT MARKET’
For the business sector, the attraction of employees with specialized degrees is someone who can take a deep dive into specific areas such as data and business analytics. Meanwhile, the draw for students is the time and money saved to earn the degree compared to getting an MBA.
Data science degree programs typically cost less than an MBA and take one year to complete, Deshpande said, noting students can go directly into them after completing their undergraduate degree without taking the GMAT.
By comparison, more than 80 percent of the students who end up in WMU’s general MBA program have worked for a number of years and are looking to get into middle management, he said.
“We have a different market for the MBA,” Deshpande said. “Enrollment depends on the churn in companies in our market area. When Kellogg was downsizing, it impacted our MBA program.”
Specialized master’s degrees provide higher-level expertise in specific fields such as data analytics, financial modeling and other fields that require greater depth of knowledge in a relatively narrow focus area, said Diana Lawson, dean of the Seidman College of Business at Grand Valley State University.
“These degrees help the currently employed to build a stronger skill set in a specific area in order to enhance career opportunities,” Lawson said.
However, specialized master’s degrees do not substitute for a general degree such as an MBA, she added.
“MBA degrees focus on developing strategic leaders, which requires the integration of information across business units for decision making. An MBA also develops skills needed to successfully lead people,” Lawson said. “Both types of degrees are essential for the growth and sustainability of organizations in today’s globally competitive environment.”
LOOKING AT TRENDS
WMU’s Deshpande said the demand for specialized programs began during the last recession when Michigan’s economy cratered. The thought process was that people could get a master’s degree in a specialized program and get a job in the field, whereas middle management positions were being cut. An added advantage is that the courses for these specialized degrees count toward a master’s program.
“We have to look at the trends,” MSU’s Omura said. “A large number of (Master of Science) programs have sprouted up and enrollment levels have followed suit. The primary target market is millennials. The people who typically get an M.S. are those who don’t want to commit two years. They’re happy with their career track, but want to polish up a particular tool.”
Deshpande said he doesn’t see any of these specialized master’s degrees reaching a saturation point in the next couple of years.
One potential wrinkle could appear if the time comes when technology can do all of the tasks in data analytics that people now are doing.
“There are trends and I’m sure there will be a time when we reach a level of saturation when you don’t need more people,” he said.