MBA Salaries Regain Dot Com Highs
Just in case there was any doubt about the effect of the rebounding economy on starting salaries, it was reported today that the compensation for recent business school graduates from Harvard, Dartmouth, and Stanford rose at least 9.5 percent from a year earlier. See Dallas Morning News.
Most of the growth, as can be expected, was driven by sharply higher salaries being offered by investment banking firms. Goldman Sachs Group Inc., for example, paid members of its class of 2004 about $85,000. This year's group should be treating last year's group to steak dinners. The class of 2005 is being paid about $140,000, an astounding one year increase of 35 percent.
Will this increase in salaries to MBA grads from top schools trickle down, or is it only an anomoly? I'm betting on the trickle down effect, although I certainly can't see too many groups of employees reaping 35 percent gains in salary from one year to the next.
During the dot com boom, talent starved tech firms (in that era, saying that was both redundant and repetitive) were actually recruiting students for six year salary starting incomes well before the graduated...from high school. That's right. Seventeen year old juniors with web development skills were being recruited by dot com firms who were in a race to go public, be bought, or vanish under the weight of their own manic spending.
Hopefully we don't see a return to such an irrational marketplace. While a few made out well, paying six figure starting salaries to 17 year olds, or giving 35 salary increases from one class to the next, is simply not healthy for the economy as a whole. It points to desperation by the employer, and what customer or client would want to hire a firm that desperate to recruit entry level candidates, regardless of their smarts and long-term potential?
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