Many employees spend $45,000 to $110,000 of their own money and commit hundreds of hours of their own time to get an executive MBA while holding down a full-time, high-stress job. But they’re not entirely alone, as companies get creative about supporting them through the process.
Chilwen Cheng did his executive MBA at Simon Fraser University’s Beedie School of Business in Vancouver. He was moving from being a practising lawyer to the executive offices and “it was an opportunity for me to acquire some skills and experience that I wouldn’t normally have had.” While he paid the $47,000 tuition himself, his company was “very supportive” and gave him time off and flexible hours during the 19-month program.
He’s not alone. Increasingly, students in executive MBA programs are footing the tuition bill, spending savings, taking out loans or cashing in retirement savings plans as companies choose other ways to assist their employees. And business schools are adapting their programs to respond to the new reality.
While the economic downturn in 2008 caused a dip in companies’ financial support for employee training, as education budgets are often the first to go in hard times, the move by companies to pull back from fully funding EMBA studies came well before then, says Prof. Beatrix Dart, associate dean of executive degree programs at the University of Toronto’s Rotman School of Management and former board member at the international Executive MBA Council.
A decade ago, almost two thirds of EMBA students in Canada were fully paid for by their companies, she noted in an interview. But around 2002, she says, “it started to slide downward,” with about two-thirds of the students either paying their own way or getting partial support from their employers.
That has held steady, with about 34 per cent of Canadian EMBA students fully funded, 27 per cent partially funded and 40 per cent self-sponsored in 2010, according to statistics from Orange, Calif.-based Executive MBA Council.
“Companies are finding more creative ways to sponsor” executives taking MBAs, says Shai Dubey, director of the Cornell-Queen’s EMBA program at Queen’s University’s school of business in Kingston, Ont. He says he’s seeing more partial sponsorships and points out that even students who are considered self-funded get support.
For example, he says, most programs run Fridays and Saturdays, so by giving the employee the Fridays to attend, the company provides weeks of paid time off each year. Furthermore, he says, “compensation can be back-end loaded” with bonuses and promotions during or soon after the program.
Indeed, EMBA Council research from 2010 shows students reported an 11.4-per-cent salary increase between the time they began and finished the program, with 37 per cent of students receiving promotions and 68 per cent being awarded new responsibilities.
Economic downturn aside, why the move away from full funding?
Partly it’s because there are more business graduates coming out of university with their MBAs in hand, notes Rotman’s Dr. Dart. “It’s much more common these days to have it readily available in a candidate.”
And partly it’s because self-sponsored or partially-funded students are generally more committed to the programs, she adds.
EMBA Council executive director Michael Desiderio agrees. “Some companies have moved to a model that says, ‘Hey, we want you to have skin in the game. So, as opposed to us giving you a full ride, you have to pay some of it.’... Other companies have taken an approach that, ‘We’re going to fund whatever degree you get up to some level, whatever that level might be ... and then you’re on your own.’”
But, just as some companies cut education funds, the 2008 crash affected the number of self-funded students willing to take on tens of thousands of dollars in debt.
