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.
With about 50 per cent of their students paying for their program, "we did notice a small drop in applications since 2008," says Colleen Collins, associate dean and academic director of the graduate program at Beedie, which resulted in a decline in enrolment to about 32 from about 36. She says it will take another year to get back to normal.
To ease the financial load, Dr. Collins says, Beedie spread its program across 19 month and three calendar years, with classes every other Friday, and kept the tuition down, at $47,500. It also offers four scholarships, funded by EMBA alumni.
The downturn didn't stop Theresa Hosford. When she was accepted for the 2009 Rotman program as a senior executive, she was to be fully funded. But about two months before classes began, her company was bought out and her group disbanded. She was offered a transfer stateside but, she said, "I wanted to stay in Canada. So I felt that I could go out and look for a job or I could invest in myself and then have a better chance to end up with a job I wanted at the end of the day."
She paid the $85,000 tuition fee with her savings. "It was definitely worth it," says Ms. Hosford, 53, who graduated last October. She started a new job as a senior manager in November and the EMBA "definitely added to my confidence in my ability to get that job."
Meanwhile, as companies that do fund look for more rounded training and self-funding students become more selective about which program to take, schools have adapted, the experts say. For example, they say, more are offering a stronger focus on soft skills, such as leadership and managing; international components; distance learning, and counsellors to help students with career strategies .
"I think your expectation of what this program will do for you and what your return on investment is is much higher" as a self-supported student, Dr. Dart says, "because you are hoping you can recoup that money by a new or better enhanced career."
The average return on investment, where students say they have recuperated their costs, is 32 months, Dr. Dart says.
But for Mr. Cheng, 37, who finished his EMBA in 2008, the return on investment has little to do with money.
It's about the quality and level of knowledge you gain and the people you connect with, he says. Indeed, he and former EMBA classmate Jim Hamlin turned their legal and high-tech experience into a software company that provides web-enabled legal services.
"The MBA," Mr. Cheng says, "has been priceless."
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