During these surreal days there comes more disappointing news in areas of employment with more than a third of employers who recruit MBA students said they will be bringing in “a lot fewer” management leaders in 2020 than in 2019, as the economic chaos wrought by COVID-19 takes its toll even on the holders of these coveted higher education degrees.
The survey, carried out by trade bodies the Association of MBAs and the Business Graduates Association, polled 1,047 of their members who reported that they were decision makers in the recruitment of MBAs for the organisation at which they work.
While 35 per cent said they will recruit fewer of them, 28 per cent said they believe that overall, there are too many candidates for too few jobs.
A total of 28 per cent of these respondents were based in Europe, a further 15 per cent in the UK and 7 per cent in North America and the Caribbean, while 9 per cent of the responses came from consultancies, with the next biggest sectors represented being engineering and IT both with 7 per cent, and banking and finances at 6 per cent.
Surveyed online for two months to the end of May, the reason recruiters cited for hiring fewer MBA graduates included a focus on core business survival rather than growth, and an aversion to hire and train “expensive” talent.
On the other hand, employers who said they would be recruiting higher numbers of MBA students explained it was to help address challenges brought on by the pandemic. Others said that the pandemic had not affected their company, or had affected it positively, allowing them to continue to hire business management graduates, and some also needed a boost to innovation.
Curiously, in spite of these difficult times, investors have been more supportive currently of chief executive pay, following a drop in the size of salary packages and a promise from companies to monitor remuneration. The FTSE 30’s top executives have seen their median pay packages drop by 7 per cent last year to £5.9m compared with £6.4m the previous year, an analysis by Deloitte has found.
The report also noted that salaries for top executives across the entire FTSE 100 have remained the same at around £3.7m. This drop in pay was accompanied by a “quieter shareholder season”. The number of FTSE firms who were rebuked on pay by more than a fifth of their shareholders has dropped to 4 per cent this year, down from 7.5 per cent last year and 13 per cent in 2018.
Deloitte linked those figures to commitments from companies to cut bosses’ generous pensions, and keep a closer watch on the remuneration of their most senior executives.
According to Deloitte, excessive CEO pensions, a major issue for investors last year, have now been addressed by many companies following pressure from the Investment Association (IA), the trade body for UK fund managers, late last year.
The IA had warned that if companies did not embrace their strengthened guidelines “they should brace themselves for more shareholder revolts.” Deloitte found that 80 per cent of FTSE 100 companies have promised to cut existing executive pensions, with the majority also committed to align the pensions of executives with the rest of the workforce by 2022.
“Pensions have been the hot topic during AGMs and are an example of the growing investor focus on pay fairness across the entire workforce. Shareholders have demonstrated that they will hit hard where companies fall foul of expectations in this area,” said Stephen Cahill, vice chairman at Deloitte.
(The writer is our foreign correspondent based in the UK.)