Wednesday, January 13, 2016

NC State Online MBA ranked #15 by US News

The NC State Jenkins MBA received more great rankings news this week.  US News and World Report issued its most recent ranking of online MBA programs and NC State placed at #15.

This is very close to where we finished in 2015.  The program was most highly rated in the area of student engagement (#9).  We also did well on admissions selectivity (#37) and student services and technology (#39).

For whatever reason we did not do as well on faculty credentials and training (#69), despite the fact that -- unlike most other online MBAs -- the faculty teaching online are the same as those teaching our and face-to-face students.  The top two schools on this dimension are Arkansas State and California Baptist; well-regarded schools such as Carnegie-Mellon, UNC, Indiana, and Arizona State are not even in the top 10.

Student interest in the NC State Online MBA continues to grow by leaps and bounds.  We are meeting the market test, as well as scoring well on the rankings.  I expect the best is yet to come.

Friday, December 11, 2015

More competition for full-time MBAs

Competition in the full-time MBA market is heating up.  The University of California at Irvine just announced that all newly admitted full-time students who are California residents will automatically get a fellowship of $10k.  This follows recent announcements by Arizona State and UMass-Amherst that full-time students will get free tuition.

Now here's the fine print: In-state tuition at UCI is $40k and change per year.  Here at NC State the full two-year cost of the degree is $45k for in-state and $74k for out-of-state.  Over half of our full-time students get a graduate assistantship or fellowship, which makes NC State an even greater value.

What is going on in the full-time MBA market?  We see some schools (Wake Forest, Virginia Teach) dropping the degree whereas others are doubling down to attract students.  The real challenge all full-time MBA programs face is that the biggest cost to students is not the tuition; it is two years' lost earnings.  If a school cannot deliver post-graduation a significant bump in income, then that school will have trouble attracting students.

The real numbers applicants should be looking at are these: (1) where am I now?  (2) where will I be immediately after completing the degree? (3) where will I be five years later?  In the most recent Bloomberg Businessweek full-time MBA rankings, their survey of 2007-09 NC State Jenkins MBA alumni found that
-- pay more than doubled between the start and finish of the program
-- pay almost doubled again five years later

That is a big reason NC State's Jenkins MBA placed #25 in alumni satisfaction and #29 overall in the Bloomberg Businessweek rankings!

Sunday, November 29, 2015

Judgment versus algorithms in hiring decisions

Companies now have massive amounts of data about employee performance.  Is it possible to find meaningful correlations between performance and indicators that can be measured before a job offer is made?  If so, then there is room for algorithms based on these correlations to make improved hiring decisions.  

Economists at Harvard, Toronto and Yale business schools recently did a study that examined this question.  They examined the hiring of low-level service workers at 15 firms.  They focused on what happens when an employee is hired based on the algorithm versus what happens when a hiring manager overrules the algorithm and hires based on his or her own judgment.  

The results, summarized in Bloomberg Businessweek and available in National Bureau of Economic Research Working Paper No. 21709, are sobering.  Job candidates picked by the algorithm stay longer and perform better than those picked by hiring managers.  Also, there was a strong correlation between algorithm predictions and actual performance.  

One caveat: this study looked at relatively unskilled jobs where performance could be measured objectively.  What would happen in more complex jobs such as trial lawyers or university professors?   My guess is that we will find out in the not too distant future.  

Tuesday, November 17, 2015

Launch event for McLaughlan Leadership series

The kickoff event for the McLaughlan Leadership series last Friday at the Poole Clubhouse was a tremendous success.  All 24 members of the initial class attended.  They had the opportunity to meet Russ and Cara Mclaughlan and network with each other.

This series is a watershed event for the NC State Jenkins MBA program.  Our ultimate goal will be to make leadership development training available to all Jenkins MBAs and to have a more intense experience available for those who can best benefit.  Click here to learn more about the experience planned for the McLaughlan Leadership participants this coming spring.  

Monday, October 26, 2015

Student financial aid: debt versus equity

Have been meaning to share this article from the Economist regarding how to best provide student financial aid.  In the US the dominant approach has been student loans.  But as any finance student knows, why can't equity be an option as well?  Why not let students sell shares of future earnings in return for up-front funding for college?

In pure financial terms, such loans would be viewed as very risky.  Would the student finish their undergraduate degree?  What earnings stream would the student generate once schooling is completed?  There is a company called Upstart that is doing this on a peer-to-peer platform; think crowdsourcing your degree!

There also would be a moral hazard problem.  Students receive the funds up front and then may choose to select a low income career or even have no career at all.  Funders would want some sort of collateral to offset this, but if you could post collateral you probably do not need a loan.

Income-based loan repayment plans are a variant on this theme.  When Yale experimented with this approach in the 1970s, it found that students who expected to have high earnings preferred traditional methods of loan repayment and those who expected no to low earnings took the "pay a percentage of earnings" repayment method.

Saturday, October 24, 2015

What happened to construction workers

Today builders say they are facing a profound shortage of qualified, trained workers.  Yet construction employment dropped by 2.3m jobs between 2006 and 2011 and is still 1.3m below the 2006 peak.  So what happened to over one million workers?  Why aren't they coming back in the market?

WSJ's Real Time Economics blog has the answer: some have switched to other industries but many have dropped out of the labor force.  At the same time hiring of young workers has been slow, so now there are not enough trained workers to meet demand.

This evidence further supports the view that despite the lowest employment to population ratio we have seen in 40 years, the labor market is close to having a balance between supply and demand.  Those who have dropped out of the labor market after they lost their jobs in the Great Recession do not appear to be coming back.

Thursday, October 22, 2015

An MBA for free

Arizona State recently announced that it would not charge tuition any more for its full-time MBA program.  In addition, ASU plans to expand the size of the program.  Right now ASU charges $54k to in-state students (over two years) and near $90k for out-of-state students.  The free tuition offer could cost ASU as much as $20m each year.

ASU is betting on a stronger applicant pool generating more employer interest and higher rankings, resulting in a rankings boost.  To their credit ASU is taking a big risk to better position its MBA program.  They are investing money from their own endowment.

What impact will this have on the MBA market?  The answer depends on how the offer changes the matching process between students and schools.  I doubt students originally bound for Stanford and Harvard will now go to ASU for free tuition.  Also, many schools in ASU's tier already give lots of financial aid to full-time students.  If ASU already was supporting half of its class, another 50 to 60 free rides will not have a dramatic effect on the entire market.

Most importantly, tuition costs are but one part of the MBA ROI calculation.  Lost earnings are a much larger component.  The earnings bump from the degree is also critical.   Arizona State does a good job in that regard (#41 in employer satisfaction in the latest Businessweek rankings), but I have to wonder whether ASU would have been better off spending less than $20m and focusing on the student experience (#62 in alumni and #61 in student satisfaction) and employer development.

At NC State, we provide full tuition graduate assistantships to a significant share of our full-time MBA students.  In exchange, these MBAs support faculty teaching and research.  Other students receive scholarships that offset some tuition costs.  Our key differentiator is not our tuition policy; it is the "think and do" spirit of NC State and the company-sponsored projects that are a key part of our classroom experience.

Tuesday, October 20, 2015

NC State MBA vaults to top 30 in Businessweek full-time rankings

The NC State Jenkins MBA program made a huge leap to #29 in the US in the prestigious Bloomberg Businessweek full-time rankings, up from #54 a year ago.  Harvard was #1, Duke was #8 and UNC-Chapel Hill was #17.  NC State was ranked ahead of many well-established MBA programs, including Michigan State, Maryland, Vanderbilt, Ohio State and Wisconsin.

Why did NC State jump so high, so quickly?  Just ask employers, which is exactly what Businessweek did.  NC State ranked #20 in employer satisfaction.  This reflects the "think and do" spirit our graduates bring to the workplace, especially the skills they develop in the company-sponsored projects that are a cornerstone of the program.  We also did very well in terms of alumni (#25) and student (#38) satisfaction.

The part-time program also received a solid ranking at #45.  This is down from two years ago, but we should be very proud to be one of just 26 schools that received top 50 recognition for both the full-time and part-time program.

Kudos to the alums, faculty, staff and students who have made the NC State Jenkins MBA such a special program.  This latest ranking, along with the #9 online ranking from US News earlier this year, shows that NC State's MBA program is on the move.

Tuesday, October 13, 2015

Will those who left the labor force ever come back?

Everyone who has been looking at labor markets over the last five years has been asking, "What is going to happen to labor force participation (LFPR)?"  We know unemployment is down to near normal levels, but LFPR remains at its lowest point in almost 40 years.  The question is important because it cuts to the heart of the issue of whether we are at or near full employment.  The unemployment numbers say yes; the LFPR numbers say no.  So what are the odds that those who have left the labor force will actually return?

Today a WSJ blog reported one relevant item of evidence, based on a sector of the economy that I have researched heavily in the past -- the construction industry.  We all know what happened to construction in 2007-08; it tanked.  That means there are a lot of former construction industry workers out there who have the skills to return.

But are they coming back?  So far the evidence is that they have found other things to do and that this has put construction contractors in a bidding war for scarce talent.  Employment is still well below 2007 levels, yet builders are having a hard time finding qualified help.  This would imply that we should take the unemployment numbers more seriously as an indicator of aggregate labor market conditions.

Tuesday, October 6, 2015

Inc. magazine lauds RTP as an entrepreneurial hot spot

Brian Hamilton, Chairman of the Board at Sageworks, has a nice piece in Inc. magazine about why the RTP area is an entrepreneurial hotbed.  Brian came here to get an MBA at Duke, which makes his comments about NC State even more compelling:
NC State is a true hidden gem that, to me, produces by far the strongest engineers and employees of the three.