In January, the world found itself walking into economic peril, with high commodity prices, risk of inflation, and zealous interest rate hikes. These financial challenges were caused mainly due to the Russia-Ukraine war, right when the world economy was recovering from the COVID-19 pandemic. In this scenario, pundits and economists predicted a bearish stock market and major economies in the world were at risk of entering a recession.
These mounting economic challenges invariably resulted in massive layoffs in the job market, especially for Indian employees. Top companies like Microsoft, Morgan Stanley, Meta, Amazon, and Salesforce had the highest number of layoffs.
It was reported that the number of people who lost their livelihoods in these layoffs exceeds those from the 2008 recession. To contextualise, about 65,000 employees were laid off in both 2008 and 2009 due to the recession, which is seen as the worst economic crisis in recent times.
However, for professionals, times like these call for upskilling their abilities and qualifications, and creating a buffer to fall back on during a crisis. Many believe that getting an MBA is one of the best ways to do it.
An MBA is seen as a precursor to a solid professional career, as it is an essential qualification for many management jobs. However, would having an MBA degree protect a professional from the recession?
MBA – recession-proof?
There is no definitive consensus among academics on whether an MBA is really “recession-proof”.
Dr Girish Mude, Assistant Professor and Programme Director, BBA and MBA at MIT-World Peace University, says, “During a recession, companies look for any opportunities for financial and economic advancement. As MBA graduates are taught how to handle economic downturns and the intricacies in business operations in general, they are usually sought by companies in turbulent times.”
He further explains that an MBA graduate’s skills in strategy, leadership, people management and business analysis make them invaluable to businesses.
“While the package can be lower during a recession, professionals would walk out of the period with better-honed skills and more handsome packages,” he says.
However, it cannot be said authoritatively that an MBA is a sure way to protect one’s career during inflation.
Dr S Ramakrishna Velamuri, Dean of the School of Management at Mahindra University, for example, says that an MBA degree is “strictly not recession-proof.” Justifying this, he says, “The placements of the business schools are affected negatively during economic downturns, such as in the aftermath of the 2008 financial crisis.”
Similarly, Dr Ranjan Banerjee, Dean and Professor of Marketing at the BITS School of Management (BITSoM), says, “Nothing in the larger sense can be recession-proof as such.” However, he adds that MBAs tend to come off relatively unscathed in a recession, as some industries perform better in such periods than others.
“Let us take the pandemic for instance. A lot of tech companies, and a lot of consulting companies did well, but conventional product companies took a blow due to disruptions in the supply chains.”
Dr Banerjee further says that MBA graduates can navigate these changes as the recruitment pool of MBAs is extremely diverse. However, he says that there is one caveat to this – this is only possible if you graduated from one of the top business schools.
MBA grads in demand irrespective of market condition
The reason behind this, says Dr Banerjee, is simple – the demand for good quality MBA graduates for various roles often exceeds the supply in India. Companies also look for capable people managing their operations at various levels, regardless of how the market is.
“Resignations are a daily affair, and companies need young, fresh talent to replace the earlier employees at an entry and mid-level management level. In this sense, MBA graduates from top colleges are in demand,” he elaborates.
Generally, it is agreed that regardless of market performance, companies strive to perform well. To do this, they need a strong workforce, as well as people who can streamline multiple aspects of business operations in line with the same goal.
Professor Rishikesha Krishnan, the Director of the Indian Institute of Management, Bangalore (IIM Bangalore) says, “In a business, there is no such thing as a marketing problem or a finance problem. These issues are seen strictly as business problems.” To overcome them, he says, all these departments need to be aligned with each other – and MBA graduates are taught to do just that.
“If you go by the recent report by KPMG, healthcare management, technology consulting, marketing and branding are some industries whose demand is unaffected by the recession. Specialising in those disciplines would yield great prospects,” says Dr Girish Mude.
The MBA edge – the value it gives
To have a career in corporate leadership, an MBA is seen as a prerequisite. The reason behind this is the added value that MBA graduates bring to the table.
Dr Girish Mude says that MBA graduates when compared to their non-MBA counterparts, can analyse different business scenarios in a more pragmatic manner. “There is always this question of efficiency or effectiveness,” he says, “and MBA graduates do things efficiently, even with challenges and limited resources.”
As mentioned earlier, companies have also begun actively looking for younger MBA graduates to modernise their operations in accordance with the latest technology and best practices.
“Most companies, when they were formed, were industrial organisations and their current top brass are not very familiar with today’s technology. They were already well into their 30s and 40s by the time email was even a thing. In a sense, people of our generation are what one would call digital migrants,” says Dr Ranjan Banerjee.
Companies now need younger, “digital native” managers who can lead these industrial organisations to become “digital organisations”, he further says. The top percentile of MBA graduates in the country are keeping up with these trends, and are exactly what companies need, he adds.
In addition to knowledge about a changing world, an MBA also equips its students with a variety of practical and actionable skills. MBA graduates tend to have a high degree of learned self-awareness, self-reliance, intuitiveness, resilience, pragmatism, and problem-solving abilities. This knowledge comes from a lot of practical learning, case study analysis, debates & discussions, seminars & mentoring programmes with industry leaders and more.
Talking about the unique advantage that MBA gives professionals, Dr Ranjan Banerjee says, “There is no doubt that you can acquire these skills on the job. However, in addition to these skills, an MBA gives you a degree and a peer group, which have its own perks.”
Through these skills, MBA students can also develop strong personalities. Shalmali Singbal, a second-year MBA student at the TA Pai Management Institute in Manipal, says, “There are so many avenues in an MBA programme through which a student can grow and learn. Through their projects and activities in the course, you get hands-on experience of the business world, and people in general. It is really transformative." Shalmali is also the President of the Student Executive Council of her college.
MBAs are often associated with entrepreneurship – and for good reason. Sameer Desai, the Founder and Chief Executive Officer of Seagull Advertising, says “I completed my MBA from the Symbiosis Institute of Management, Bangalore in 1992. Soon after that, I started my career with the Tata Group. Eventually, I became an entrepreneur myself.” Sameer says that he acquired important entrepreneurial skills, such as self-reliance, pragmatism, problem-solving abilities and business functioning from doing an MBA.
These skills are especially important during a period of recession. “In a recession, companies have two fundamental priorities: increase revenues and reduce costs. MBA graduates have good training to deliver on both priorities,” says Dr Ramakrishna Velamuri.
The impact that networks between corporate houses and B-schools have on recruitment cannot be understated either. According to Dr Ranjan Banerjee, the CEO pool across the top companies are predominantly alumni from the best B-schools in the country, and they prefer coming back to their alma maters for new recruits. “These colleges have a proven track record of creating adaptable, self-aware, and capable professionals with a huge potential for learning,” he adds.
MBA during a recession – a good idea?
The common notion seems to be that a period of recession is the best time for anyone to pursue MBA.
The reason for this, according to academics as well as students, is that an MBA gives professionals and fresh graduates alike an opportunity to upgrade their skills and think multilaterally, and opens doors to new prospects.
Saksham Gupta, a student in the Indian School of Business' Postgraduate Business Programme says, “The versatility of an MBA graduate's skill set serves as a significant advantage during economic volatility, offering diverse career paths in finance, marketing, strategy, operations, and leadership.”
Gautam Lakhamraju, the Chief Operating Officer of the Great Lakes Institute of Management, says, “In a recession, pursuing your MBA is an option for you if you are already a working professional, who is unable to see career growth or a fresh graduate looking to enter the job market. In either case, an MBA equips you with additional skills that companies today demand.”
He further adds that acquiring an MBA as soon as possible would work best for freshers, and waiting until job insecurity is futile. “Nobody can predict when a recession can happen. It is better to upskill early in your career, as it would be better in the long run,” he says.
However, he also adds that when there is a recession and jobs are scarce, pursuing an MBA would be a good use of time and a way to grow to the next level. “There may be an opportunity cost for mid-career professionals, as they would not be making money during that time. However, it is just for the short run, as it opens a lot of new prospects for them,” he assuages.
MBA – more than just a qualification
As it opens a lot of employment prospects, MBA programmes can be seen by the general population as just something that would look good on one’s Curriculum Vitae (CV). However, upon further inspection, one can see that it is much beyond that.
Working professionals, MBA students, and professors alike categorise MBA as an “investment” – more specifically, an investment in knowledge.
MBA is more than just a tag, says Dhriti Prasanna Mahanta, the Vice President of Teamlease. Dhriti, who graduated from Amity Business School in 2002, says that the knowledge, mentoring, industry exposure, and networking helped him propel his career.
The business world is rapidly changing, with new processes, values, and technology making their way into everyday business operations. MBA graduates have the knowledge, skill set, and aptitude to help companies leverage them to their advantage, say academics.
Moreover, companies have bigger, more specific demands. As a result, traditional MBA programmes are now being tailored to meet them.
Dr Girish Mude says that, for example, an MBA in Marketing now makes students familiar with Digital Marketing, an MBA in Finance includes the know-how of Financial Analytics and FinTech and an MBA in Human Resource Management now teaches its students about integrating AI and Analytics into HR functions.
In addition, B-schools also lay extra emphasis on imparting quality education, and employ the world’s most renowned teaching faculty as a result. “Is the classroom two-way? How engaging are the classes? How is the student-teacher interaction? That is what we focus on,” says Dr Ranjan Banerjee.
Due to this, the top MBA programmes remain popular despite high fees. Professor Rishikesha Krishnan says that the overall returns to an MBA are far higher than the tuition fees.
“The median salary package that MBA graduates get in their placements is a lot higher than the tuition fees. Even if they had studied on a student loan, they can repay the loan within two years of getting placed,” he says, adding that a 1-or-2-year MBA is an investment that fuels a career of 20-25 years.
Making the best of your MBA course
While enrolling in a good MBA programme is certainly a good step for one’s career, it is only the first step.
First and foremost, MBA graduates need to learn to keep their eyes and ears open to business complexities, says Dr Girish Mude. “Students need to pay attention to case studies, discussions, and seminars and learn how to solve problems decisively,” he says.
Echoing this sentiment, Professor Rishikesha Krishnan says, “Keeping oneself abreast of all the changes in the business environment is important, as being a successful manager means being able to adapt.”
Staying in one’s comfort zone also would not help, says Shalmali Singbal. “There are so many curricular and co-curricular avenues which will teach you so much. Limiting your time in your MBA to what you are comfortable with will prevent your growth,” she says.
Ultimately, it is also important to know your goals and what you would like to achieve at the end of your MBA program. “Do not do an MBA just because it is fashionable. Do not be influenced by brand value and salary packages. Do an MBA only if you want to learn and lead,” says Dr Ranjan Banerjee. He further advises students to ultimately do what makes them happy, in the end.
