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Global Study of Elite MBA Students Reveals Winners and Losers in the War for Top Talent
Three-quarters of top-tier MBA students say corporate reputation will play a critical role in deciding where to work
A global study of MBA students at top European, US and Asian schools today reveals the winners and losers in the global war for talent. Hill & Knowlton's eighth annual Corporate Reputation Watch study shows that certain industries and locations are losing the reputational battle in the global war for talent.
In examining MBA students' career aspirations, the study shows that the reputations of key emerging markets (Russia, Eastern Europe, Middle East and South Asia) discourage the best talent from working there. The same applies for multi-billion dollar industries such as alcohol, chemicals and tobacco with more than double the number of MBA students not interested in working in them than those who are: alcohol (51 percent versus 20 percent); chemicals (48 percent versus 19 percent); and tobacco (67 percent versus 13 percent).
Paul Taaffe, chairman and CEO, Hill & Knowlton said, "MBAs graduating in a post-Enron, post-WorldCom world have a strong preference for the companies with the best reputations. It is clear that recruiters of top talent will need to offer more than just generous compensation and ample opportunity. The leaders of tomorrow are overwhelmingly seeking to associate themselves with industries, and specifically companies, with great reputations. Those with inferior reputations will find it very difficult to attract and retain the best and the brightest."
The study further reveals that in terms of company ownership, MBA students are dramatically swayed towards publicly listed companies or venture-funded institutions. The following table shows those sectors, locations and companies whose reputations attract or deter the best talent:
Industry sector
Attracts
Banking and finance
IT
Energy utilities
Deters
Alcohol
Chemicals
Tobacco
Location
Attracts
Western Europe
North America
North Asia
Australia & New Zealand
Deters
South Asia
Russia
Middle East
Eastern Europe
Africa
Company type Publicly listed
Attracts
VC or PE owned
Deters
Family owned
Government owned
Companies know that in the war for talent, they must do all they can to win and their external perception is possibly the most vital weapon in their armoury. The study confirms the importance of reputation with almost three-quarters (73 percent) of MBA students stating that corporate reputation plays an extremely or very important role when considering where to work after completing their MBA, with only one-fifth (20 percent) saying it is fairly important. In fact, only four percent said that reputation was not important.
The results also show significant international mobility among business’ most sought-after talent with over three-quarters (76 percent) of those surveyed stating they are looking to change either industries or firms following graduation. Only one-fifth (19 percent) said they are intending to return to the firm that they worked for prior to their MBA. A fifth (20 percent) of students surveyed want to move to another country from that which they are studying, while one quarter (25 percent) are studying outside of their home country and plan on staying there.
Given this mobility, the study provides invaluable insight on the regions that are attracting talent. While the emerging markets of the world have got their economic pitch right, they are in many cases failing to communicate effectively with the very talent that can help those markets move to the next level. The following table shows the interest in working in various regions among the MBA students surveyed:
Regional Preferences Net Interest Scores *
Western Europe +80%
North America +76%
North Asia +30%
Australia/New Zealand +23%
South East Asia +1%
Latin America -8%
South Asia -19%
Middle East -37%
Russia -41%
Eastern Europe -36%
Africa -49%
The ownership type of company matters as well. By far the most attractive companies for MBA graduates are those which are publicly traded with almost two-thirds (61 percent) citing interest and only six percent saying they are not interested. Companies that are owned by venture capital or private equity funds have just over half of MBA students (52 percent) expressing an interest in working for them, versus 12 percent with a lack of interest. The situation for family-owned companies and government-owned companies — found more commonly in emerging markets — is less positive with both having more students not interested in joining them after graduating than those who are. For family-owned companies, a quarter (24 percent) expressed interest in joining one, versus 32 percent with a lack of interest. The survey painted a similar picture for government-owned companies with just under a quarter (23 percent) of students citing interest, versus 46 percent who are not interested.
So how can companies promote reputations that make them more attractive to MBA students? The key factors that drive reputation are perhaps unsurprising:
Factors That Drive Reputation % that Rate as Extremely or Very Important
Quality of management 89
Quality of products and services 88
Employee talent 83
Financial performance/investment value 71
Innovation 68
Global reach 58
Social responsibility 58
Use of corporate assets 40
However, when asked what factors drive career choice, MBA students told a slightly different story. The factors listed split broadly into three tiers. The top tier is all about people and the position: employment career opportunities; corporate culture and working environment; employee compensation and benefits package; and employee satisfaction. In the second tier are some of the basic issues about performance. The third tier covers the messages that the company communicates about its ethics and social and environmental responsibility — its broader brand and values agenda:
Important Factors in Choosing Job % that Rate as Extremely or Very Important
Career opportunities 95
Corporate culture/working environment 86
Compensation and benefits package 85
Employee satisfaction 84
Quality of products and services 75
Financial performance/growth potential 73
Corporate governance and ethics 58
Social responsibility/community involvement 49
Brand and marketing message 48
Environmental/green policy 34
Taaffe concluded, "The best talent, like the most attractive real estate, will always be in scarce supply. The future winners in the corporate world will be the ones who are the quickest to recognize this and take action to enhance and protect reputation. These top MBAs see career risk on reputationally challenged companies."
Corporate Reputation Watch — Reputation and the War for Talent is available from www.hillandknowlton.com/crw |
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