Wednesday, 23 September 2015

Do You Need MBA for Finance Careers?

Does an MBA degree hold value in 2015?



Times have certainly changed from the 1990s when an MBA degree from prestigious universities held immense value, both in India and abroad.
Almost every graduate pursues an MBA but is it essential for a lucrative career?
Before I delve into what role MBA plays in finance, especially corporate finance, KPO, capital market and the banking sector, it is essential to understand the expectations associated with MBA, as in whether the degree aligns with your long term career graph. MBA and its program benefits vary from one school to another.

Do you NEED an MBA?

A primary way in which MBA contributes to your career is by providing practical management and leadership skills, which is a necessary trait to work and survive in any kind of organisation, whether it is banking or otherwise.
The nature of management education has changed over the last few decades.
Previously, the courses used to majorly focus on quantitative data analysis necessary in finance and its related operations.
The quantitative aspect still resides but merges with more qualitative aspects so that MBA degree holders don’t have a myopic view of an organization and expands to aspects like organisational behaviour, leadership and strategy.
Garth Saloner, the Dean of Stanford says:
“The [quantitative] skills of finance and supply chain management and accounting and so on, I think those have become more standardized in management education, have become kind of what you think of as a hygiene factor: Everyone ought to know this.”
Over the years, quantitative skills imparted during MBA training stopped short of equipping learners with adequate skills.
It was felt that as the career progressed, the learners needed to employ leadership and management skills. For instance, senior people within an organisation require different interpersonal skills.
As Saloner goes on to say “the softer skill sets, the real leadership, the ability to work with others and through others, to execute, which is still in very scarce supply.”
Coming back to our discussion, the role of MBA in corporate finance, KPO, capital market and the banking industry is varied.
Certainly, an MBA in Finance is suited to further career in various industries like investment services, commercial banking, corporate banking and real estate.
The MBA course gives learners a chance to gain both financial and business skills, equipping them to work in variety of enterprises.
Even while still in MBA school, they get chances for high paid internship opportunities and much higher salaries on completions. The MBA programs are available on both full-time and part-time basis.
The purpose of the MBA program is to offer foundation to subjects like Strategy, Economics, Leadership, Statistics and Marketing.
Certain schools offer a greater number of business-related courses in management but the majority of courses focus on banking, financial and investment topics.
If you are interested in joining any of the corporate finance, KPO, capital market and the banking market organisations, you should do MBA as it teaches risk management, stock market analysis, financial foundation, global economic growth, knowledge of financial instruments, futures and options, market trading, bankruptcy, market volatility, investment banking and corporate finance.

The Employability Factor of MBA

Does having an MBA degree give access to favorable career options? Ultimately, the purpose of the degree is to acquire employable skills.
The employability of MBA degree holders, again, is varied.
An MBA in Finance or Business doesn’t guarantee entry into the world of corporate finance, KPO, capital market and the banking industries. All the four segments hire MBA degree holders’ right at the executive level.
The employability of an MBA degree holder is very less in a KPO when compared with banking, capital market and corporate finance world.
A report by Aspiring Minds titled National Employability Report by MBAsshowed that the employability of MBAs in the KPO sector is 2.92% and 7.98% for business consulting and Analyst function.
Between these two data, an Analyst finds better employability in KPO than those interested in the business side of KPO.  This is because while Analysts may not have good spoken and written English skills, their data crunching skills are much in demand in not only in KPO but also in capital and investment markets.
Those who are involved in the business consulting role communicate with clients on a day-to-day basis, have excellent English speaking and writing skills and possess excellent quick thinking skills.
The Aspiring Minds employability report states that MBA employability varies between males and females in both business consulting and Analyst function.
One of the major employability factors for MBA candidates is English scores – employers give higher value to the person’s spoken and written English skills.
Further, there is a difference of employability between Tier I and Tier II cities; the employability curve falls drastically and the knowledge gap between Tier II and Tier III cities is too big.
As such, MBA candidates from Tier II and Tier III cities have to sweat more to find employment with MBA.
As you must be aware, the capital market and investment sectors are somewhat of an elitist, their hiring processes are gruesome, they are tremendously ‘picky’ and look for various skills and knowledge-levels and only an MBA degree won’t suffice.
The employability is higher with colleges located in metro cities because employers believe the candidates there receive higher exposure and access to better education.
It is seen that it is not the personality traits which reduce employability but domain knowledge and cognitive skills. MBA in Finance and Marketing candidates have higher employability in the KPO and Investment sector.
Talking about campus placements, top MBA colleges help candidates get hired 58% higher than the bottom MBA colleges which have an employability of only 2%.
The average campus placement is 8% and only about 30% of the colleges show campus employability higher than 8%. Further many employable candidates aren’t campus hired because recruiters don’t visit beyond top 1000 campuses and lastly, 59% of the employable candidates are given Analyst position.
Conclusion
The role and responsibilities that come with any of the finance industries vary and the purpose of MBA is to give you a foundational knowledge.
Knowledge and learning shouldn’t stop with completion of MBA; it continues and people like you should opt for advance courses more suitable to your respective finance fields.
Source- Financewalk.com

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