Tulane Professor Jennifer Merluzzi and Columbia Professor Damon Phillips have conducted some interesting new research on the labor market for graduates from top MBA programs. They studied approximately 400 graduates of top business schools in the United States. These graduates too jobs in the investment banking industry. They discovered that students with broader and more diverse backgrounds and experiences received more job offers and secured higher signing bonuses than those individuals with prior specialization in investment banking/finance both at work and in school. Here's how the scholars explain their findings:
First, in labor markets with strong institutional screening mechanisms, specialization won’t be as valuable. In the absence of other information, it’s an important indicator of skill, but graduation from a top MBA program is a strong signal to the market that someone is qualified. In that scenario demonstrating consistency is no longer advantageous. Second, employers may discount experiences that incrementally extend previous efforts. Among MBAs, there’s now a strong emphasis on building a consistent profile as a finance person or a marketing person. You end up with many similar people in the market. Specialization becomes commodified, giving you less bargaining power, because you’re easily substitutable. Plus, when the firm is used to hiring a lot of people like you, it’s easier to calculate your value compared with someone with diverse accomplishments.
Clearly, some jobs require specialists. We cannot generalize these findings to all circumstances in the labor market. However, the research does remind us that the trend toward specialization in education and training may be counterproductive in some ways. I don't think that the findings suggest that we should ignore the development of specialized skills though. We need to educate students with breadth and depth. I don't think it's either an either/or proposition. We need students to have distinctive skills that employers value and that can enable them to hit the ground running when they enter the workforce. However, we want them to have a broad background that enables them to make connections among ideas in various domains, and that enables them to put their work in context. We also need them to be able to work with others who have different skills, backgrounds, and experiences.
At Bryant University, we require our undergraduate business students to complete an extensive general education curriculum, AND we require them to minor in a liberal arts and/or sciences area. Thus, our finance graduates come out with minors in areas such as history, political science, or psychology. We believe that this combination makes them highly valuable as they enter the labor force, and our placement statistics confirm the validity of those beliefs.