Addressing the disconnect between MBA education and real-world demands to minimise high attrition rate

An MBA degree has long been viewed as the golden ticket to land the job you want, with MBA programs focusing on equipping students with essential business knowledge and skills. However, recent times have seen a massive shift in both the educational and business landscape, and gradually, the attrition rate has spiked among MBA graduates.

According to a recent report by Deloitte titled Campus Workforce Trends 2024, the pan-India attrition rates for recruits and employees with one and two years of experience stands at 21%, 26%, and 28%, respectively. The million-dollar question is, why? The answer lies in the glaring gap between classroom instruction and practical demands. This article will explore why the gap exists and what can be done to solve it and minimise attrition rates among MBA graduates.

Understanding the mismatch

As the nature of jobs changes, educational institutions need to follow suit. MBA programs often focus on theories, strategies, and the framework of the subject taught. While this provides ample theoretical knowledge, it falls short in real-life application, resulting in graduates finding it challenging to function in the workplace. Hands-on learning through internships and live projects can help students understand their interests better and prepare them for practical challenges.

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The knowledge gap

As per Unstop Talent Report 2024, 82% of HR professionals believe a significant skill gap exists among students. In contrast, 91% of students feel their coursework is adequate. This gap underscores the rising need to ensure educational institutions are aligned with industry expectations. Given that companies often look for candidates who can adapt and thrive in the workplace with minimal on-the-job training, the misalignment of the curriculum and the real-world requirements results in MBA graduates falling short.

Addressing GenZ expectations

GenZ accounts for around 2 billion of the global population and is expected to make up nearly 40% of the workforce soon. Companies are welcoming more GenZ professionals into their teams. However, to reduce attrition rates, it��s essential to understand the GenZ psyche better. Often, GenZ professionals value inclusion in large and impactful projects where their ideas and voices are heard. Changing policies to involve them in meaningful work can significantly enhance their engagement and retention.

From an educational standpoint, GenZ students often look to enhance their learning through technology and hands-on experiences where they can interact with like-minded peers. They also seek fulfilling learning experiences rather than studying solely for grades. So, it is crucial to ensure that the lessons and knowledge imparted are meaningful and will provide enriching learning experiences.

A greater emphasis on skills

It was found that over 88% of HR professionals prefer evaluating students based on skill sets rather than degrees alone. Engaging students through competitions and challenges allows them to be assessed on their ideas, skills, and quick thinking—qualities essential in a professional setting. This approach aligns with the industry’s move towards a skills-based evaluation, which reduces bias and promotes fairness.

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Going beyond the curriculum

To succeed in the real world, students must go beyond only learning their course curriculum. Regularly engaging with mentors, alumni, or peers can provide valuable insights into preparing for placements and understanding industry demands. Participating in masterclasses from industry professionals can offer practical knowledge and strategies for excelling in their chosen fields.

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Innovative retention strategies

Deloitte’s Campus Workforce Trends 2024 report showed companies need to recalibrate their approach for better retention, especially given the high MBA graduate attrition rates. In today’s competitive market, implementing innovative practices is essential to retain top talent. Despite higher attrition rates, 70% of organisations actively seek MBA graduates, reflecting their importance in business success. The study also indicates a 5.2% CAGR in compensation for MBA graduates over five years, underscoring their value.

Bottomline

Bridging the gap between MBA education and real-world requirements requires a concerted effort from educational institutions, students, and organisations. Implementing an innovative approach and ensuring enriching, meaningful experiences will reduce attrition rates and pave the way for sustained success for graduates and businesses.

(Author Ankit Aggarwal is Founder and CEO of Unstop. Views expressed are personal.)