On a chilly evening last month Vanguard employees in Malvern walked to a nearby building to take the full-time MBA class offered by Drexel’s LeBow College of Business.
Men and woman in their 20s to their 40s come to class for three hours, twice a week, all on the company’s dime. Apart from the Vanguard employees on site, some dial in from all around the country, including Arizona and North Carolina, and even internationally from Australia or London.
This is an industry MBA program custom designed by Drexel specifically for Vanguard employees. Since 2014, about 100 employees have graduated with Drexel MBAs. Each cohort has 30 students and lasts 27 months.
Students said time management remains a challenge. But the work location is convenient. “Vanguard and Drexel have created a good and seamless transition for us with the satellite campus and flexible working schedules,” said Emily Magee, education consulting services manager at Vanguard. “The peer group has positively impacted me the most. We’ve been able to discuss course-related and work-related topics, sometimes, simultaneously, allowing us to strengthen our performance at school and work.”
With applications falling nationwide by 7 percent, according to the Graduate Management Admission Council, business schools have sought to innovate by offering more online and part-time MBAs, as well as specialized degrees such as a master’s in business analytics, finance and management. They’re also giving more waivers for the Graduate Management Admission Test (GMAT).
One strategy is to work closely with industries and tailor specialized programs for specific groups and companies.
“For schools that are more regional, they are searching for new and differentiated props, advantages of geographical location, or special ties to some industries," said Eliot Ingram, CEO of Philadelphia-based Clear Admit, which advises MBA applicants on admissions. “Each tries to find a niche.”
St Joseph University’s, with 70,000 alumni nationwide, also offers customized MBA models, said Christine Anderson, the school’s associate director of graduate business programs. Groups ask for customized programs in pharmaceuticals, food, health care, and finance. And these programs are also available for all students.
Building specialized programs is a key feature of Drexel’s business school, said Vibhas Madan, senior associate dean of academic programs, who teaches the school’s Vanguard program. “The only way we are going to succeed is to build stronger ties with the industry.”
So Drexel is talking with other companies to open more industry MBA programs. LeBow currently offers a certificate program for Wawa employees, and has worked with Campbell Soup and Independence Blue Cross.
The Vanguard Drexel MBA is 70 percent to 80 percent built by Drexel, with 20 percent to 30 percent influence from Vanguard, based on what the company wants its employees to learn.
The company tracks the effects, said Kathy Himsworth, head of talent development at Vanguard. “This program has been a lever in both their performance and potential in the long term.” She added that students expect to be promoted and assume more responsibility after graduating.
Each year, the 30 employees selected from 120 applicants company-wide usually come from the manager’s level. Applicants need not take the GMAT, but must have at least five years of outstanding work experience with Vanguard.
The Drexel MBA also helps with employee retention, Himsworth said. Graduates need to commit to Vanguard for two years after graduation.
“It’s making me a more effective leader,” said Jan Kargulewicz, a compliance manager at Vanguard. “I’m learning so much from my peers, as much from them as I am from the coursework. And I’m building a very effective and global network.”
MBA degrees are changing
The traditional two-year MBA program has been shrinking across the United States. Several schools, including the University of Iowa, Wake Forest and Virginia Tech, closed their two-year full-time programs in recent years.
Last year, even elite business schools such as Harvard Business School and the University of Pennsylvania’s Wharton School have seen applications fall by at least half, according to recent GMAC data.
Experts said that there are several factors at work. One is that the number of international applicants to U.S. schools fell in recent years because of worries about obtaining work visas and rising competition from schools in Canada, Europe, and Asia.
The opportunity cost of quitting a job for two years in a strong economy and tight labor market is also higher than in a recession.
Finally, in an era of innovation, millennial applicants want something quicker and more specialized. All this bodes poorly for the traditional two-year MBA.
Rise of online MBA degrees
Although there has been a rise in non-full-time programs, including the executive and part time MBAs, the online MBA is by far the most popular and is gaining recruiter recognition, administrators said. Innovations have enabled online MBA programs to offer higher-quality education.
Elite schools have also begun offering online programs. The University of Michigan’s Ross School of Business has recently advertised a fully credentialed online program, while Harvard Business School offers an online program in statistics.
Penn State’s Smeal College of Business and the University of Maryland’s Robert H. Smith School of Business are also encouraging students to choose electives online.
Online students typically need to go to campus two or three times during the program for orientation, graduation, and undertake a one-week international travel business project.
Online MBA programs have been leading regional business schools in enrollment. Among the 400 MBA students at Drexel, only about 10 percent are full time, said Madan. Most are online or part time.
The online program at Indiana University’s Kelley School of Business has also grown dramatically. It was first offered to a class of 25 students in 1999. Now the online program takes 350 students in each of three cohorts every year, and is tied for the top spot in the U.S. News rankings.
This year marks "the highest online enrollment we ever had,” said Kelley’s dean Idalene Kesner, although the school’s full-time applications have fallen for the last seven years. Kelley this year has 1,530 online MBA students and 380 full-time MBA students.
Another advantage: Most regional and online schools also have rolling admissions all the time. (Applications remain open for full-time regional MBAs for fall 2019, though not for the top schools.)
The flexibility of online appeals to working parents who are older and have more work experiences.
“For men and women both, the time when you are most likely to have children also often comes at the prime opportunity for career advancement,” said Judy Frels, assistant dean of online programs at Maryland’s business school. “You don’t want to quit your job and go to a full-time program while raising a family."
Online also avoids commuting and gives students more time to spend with family. Women, especially, prefer online; they make up 43 percent of Maryland’s online students, compared with 28 percent of full-timers.
Specialized degrees and certificates
Schools have tried to break down the traditional two-year general MBA model into specialized degrees and certificates.
More top schools offer one-year master of science degrees in finance, digital marketing, supply chain, and especially business analytics, a hot area.
“We are seeing more people saying, ‘Instead of doing a two-year general degree, why don’t I do a one-year specialized business degree?’” noted Michael Waldhier, Penn State’s director of MBA admissions.
These degrees generate more revenue for schools because they may be already offering the same classes for MBA students. Schools often employ adjuncts or pre-doctoral lecturers, who are cheaper than tenured professors.
Schools are also offering certificate programs to give students a taste of the coursework and let them decide later if they want to pursue a full degree.
Last August, Maryland launched what it calls a micro-masters program covering 25 percent of its online MBA. Students can choose to extend it to a full-time MBA once they finish. “The world changed. People want to learn at their timetable, at their pace," said Frels, at Maryland. “They want stackable credits and smaller chunks of education. They want to learn what they can apply tomorrow.”
GMAT testing has dropped in recent years, because fewer schools demand it. More schools are accepting Graduate Record Examinations (GRE) or are offering GMAT waivers once students meet certain requirements.
"Schools are very aware that a test is an impediment to getting some people to apply. So if they were to eliminate that, they would get more applicants,” said Ingram of Clear Admit.
University of North Carolina’s online MBA, also ranked No. 1 by U.S. News this year, waives the GMAT/ GRE requirement for candidates who have worked full time for six years. Applicants who have worked less than that can apply for GMAT waivers.
“There is very little correlation with GMAT scores in terms of success of a working professional student,” said Melissa Hlavac, UNC’s managing director of MBA programs.
Drexel also offers GMAT waivers “just to be competitive," Madan said. The school uses the GMAT to screen more international students whose schools may have had a different grading system from those in the U.S.
On its website, the University of Delaware’s Alfred Lerner College of Business and Economics says it offers waivers to MBA applicants with four years of progressive work experience, or if they have a 2.8 college GPA, received a B on college introductory math, and have good writing skills.
If a student earns higher than a 600 on the GMAT, Delaware waives the application fee.
Why get an MBA
Unlike law or medical school, people do not need a license to do business or have a career. So is a degree worth it?
Some applicants believe that only a handful of elite schools, such as Harvard, Wharton, and Stanford, are worth the opportunity cost of stepping away from a career.
Better undergraduate business programs afford another reason to skip the graduate degree.
But there is still value in a full-time MBA since it delivers education and a network, experts said.
“For students who want to switch industry or career path, they will want to go back to a full-time program, immerse themselves for hands-on coaching, and the summer internship in between years is great for them to find that career path,” Indiana University’s Kesner said.
And for people who enjoy working at their company but want to break through the ceiling, online and part-time programs are great ways to progress.
Like their students, schools “have to continuously and constantly innovate," Kesner added. “If you rest on the old program, it will be almost impossible to attract students.”