Is it okay to pursue MBA in times of recession?
Often, in times of recession, questions regarding the choice of MBA degree arises among students. For example, “Is it okay to pursue MBA in times of recession?” ‘Does MBA really gives professional employable skills?’ We explore for answers to these notions and bring it to you.
With the year starting, the world found itself dwelling in an economic peril, with higher commodity prices, inflation risk, and zealous interest rate hikes. The main cause of this recession is Russia-Ukraine battling, right when the economy is still recovering from the COVID-19 pandemic. In this case, the economists predicted a bearish stock market and major economies in the world are at risk of entering into a circle of recession.
These hiking 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 have the highest number of layoffs. The report included that the number of people who lost their job or livelihoods in these layoffs exceeds those from the recession in 2008. To contextualize, around 65,000 employees suffered layoff in both 2008 and 2009 due to the recession, which we can see 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 during a crisis. Many believe that getting an MBA degree is the best best to make it possible.
An MBA degree serves as a catalyst to a solid professional career equation, as it is an essential qualification for many management jobs. However, the question arises ‘Will having an MBA degree protect a professional from the recession?’
Is MBA recession proof?
Although, 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. MBA graduates are usually a choice by the companies as they are professional in handling economic downturns and the intricacies in business operations.
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, as foretold, it can’t be said authoritatively that 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 said that 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 BITS School of management (BITSoM), says, “Nothing in 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 other.
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 this is only possible for top B-School graduates.
Demand for MBA grads 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 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 Rishikesh 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 create business problems.” To overcome them, he says, all these departments should align with each other and MBA graduates are professional in it.
“If you go by the recent report by KPMG, healthcare management, technology consulting marketing and branding are some industries on whom there is no affect of the recession. Specializing in those disciplines would yield great prospects,” says Dr. Girish Mude.
The MBA edge- the appraisal it gives
To have a career in corporate leadership, an MBA is seen as 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 analyze 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.”
Companies have also begun looking for younger MBA graduates to modernize their commercial operations in accordance with the latest technology and best practices. A need for younger, “digital native” managers who can lead these industrial organizations to become “digital organizations”. 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 and discussions, seminars & mentoring programmes with industry leaders and more.
Conclusion
Talking about the unique advantage that MBA gives professionals, there is no doubt that you can acquire these skills on the job. However, in addition to these skills, an MBA degree gives you a peer group, which have its own perks.”
Through these skills, MBA students 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.” These skills are especially important during period of recession. In recession, companies have two fundamental priorities: increase revenues and reduce costs. MBA graduates have good training to deliver both priorities. According to academics as well as students, is that an MBA Hence, the answer to the question “Whether MBA is good option to pursue or not?” is that the recession period is the best time to pursue MBA. An MBA gives professionals and fresh graduates alike an opportunity to upgrade their skills and think multilaterally, and opens doors to new prospects.