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Canadian HR Reporter
Nov 5, 2012

HR split on value of MBA

One-half of respondents to Pulse Survey say degree helpful in fast-tracking to senior role
By Amanda Silliker
    
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To MBA or not? In this era of continuous professional development, HR professionals might ask themselves whether an MBA would be a valuable addition to their credentials, in order to maintain an edge in the job market.

Canadian HR Reporter and the Human Resources Professionals Association (HRPA) conducted a Pulse Survey to find out whether or not HR professionals are considering hitting the books, and what value they think the MBA has within the industry.

HR split on value of MBA

No MBA? Don’t despair (Analysis)


HR split on value of MBA

By Amanda Silliker

Patrick Gauch was recently hired as director of corporate services at the Purchasing Management Association of Canada in Toronto, and he credits his current standing as an MBA candidate for helping him get the position.

“One of the things the MBA does help you do is career advancement,” he said. “I started looking around at other opportunities and I was headhunted a bit… there’s recruiting done on campus, networking done on campus and it provided me with more opportunities and opened a lot of doors for me.”

Gauch has been working on his MBA via the distance education program at Victoria-based Royal Roads University and he is on track to complete the program in January.

But HR professionals are split on the value of an MBA for advancement in the profession, according to the latest Pulse Survey. Forty-five per cent are considering pursuing an MBA, while 46 per cent are not, found the survey of 840 members of the Human Resources Professionals Association (HRPA) and Canadian HR Reporter readers.

“I’ve considered it to a good extent. It’s definitely something I’ve been looking at the last couple of years to see if it was something that would benefit me,” said Maxine Cusson-Meisner, director of HR at talent management firm VPI in Mississauga, Ont., which has 150 employees.

“But how much time is this going to take me and is that going to impact my day-to-day career along with work-life balance? And also from a financial perspective — that’s probably the biggest barrier.”

The cost of an MBA varies greatly but the average price tag is between $20,000 and $30,000. Whether or not HR professionals would earn that money back is where the struggle lies.

“Personally, I just think it’s a money grab, especially for HR,” said Karen Seal, HR generalist at automotive technology company Tenneco Canada in Cambridge, Ont., which has 560 employees. “Having the passion for HR motivates me more than having an MBA.”

But the initial cost of the MBA was well-worth it for others, including John Martin, director of HR at the City of Belleville in Ontario, who completed his MBA at Athabasca University in Alberta.

“I graduated in 1999 and applied for the job in 2000 and I’m convinced it got me in the door to get the interview. I was initially hired as manager and a year later I made director and it’s been a very, very strong career path,” he said. “The MBA got me in the door and it’s paid off in the long run.”

Enrolling in an MBA program has helped Gauch develop his strategic thinking skills, which is particularly helpful because he is asked “all the time” to provide business rationale and analysis, he said.

Forty per cent of HR professionals are frequently called upon to provide such insight, found the survey.

However, 38 per cent are rarely asked to do so and 19 per cent said they are never called upon for such analysis.

“I deal with the strategy side of HR, not the payroll side,” said Gauch. “The MBA exposes you to a lot of different tools, different methodologies, different philosophies and strategies — it exposed me to things I had never seen before in my own world of operations.”

Nearly nine in 10 (88 per cent) HR professionals said they would benefit from a master’s degree with knowledge of strategy and implementation, found the survey.

And 84 per cent of respondents said they would benefit from a degree with knowledge of business operations.

As a member of the senior management team at the 475-employee City of Belleville, Martin is heavily involved with business operations including corporate wide policy-making, budget, capital and operating, and restructuring.

“The MBA has been extremely helpful for that — going in and doing analysis and reviewing the options and making sure you have a plan and moving ahead with it. It just gives you the framework and structure to move forward with just about any aspect of the job,” he said.

But this training doesn’t have to come from an MBA — a master’s of human resources or organizational design would likely be just as beneficial, said Cusson-Meisner.

And completing a certification, such as those found in labour relations and employment law, can also be beneficial for HR professionals, said Martin.

Forty per cent of HR professionals believe their HR training has sufficiently prepared them for a senior business role, found the survey. Forty-five per cent said it has prepared them somewhat but not enough, and 11 per cent said it has not prepared them at all.

“It’s a start,” said Gauch. “Having my HR training helped me advance through the organization as recognition that I have expertise in human resources but, more importantly, it demonstrates a bit of your character, your commitment to yourself and wanting to have lifelong learning and growing.”

But having a Certified Human Resources Professional (CHRP) designation only helped Gauch advance to a certain extent, he said.

One-half (52 per cent) of HR professionals believe an MBA is helpful in fast-tracking to a senior role, while 18 per cent said it is critical. One-quarter (26 per cent) said it is not required, found the survey.

“It’s very important, I think. It’s just the way that it trains your mind to think and to approach problems and situations,” said Martin. “The MBA allows you to take (your career) one step higher and you’re not just dealing with HR specifically, it really pays off as part of the senior management team.”

But the importance of experience should not be underestimated, said Cusson-Meisner, who would not put a person with an MBA in a senior role if he has limited experience.

With experience comes the life skills of learning how to deal with people, communicate properly and use respect in the workplace — and these are very important for success, said Seal.

“An MBA is very attractive to have and maybe you’ll get more money doing it, but you need the ability to be able to talk to people and work your way through things and the experience on the job should count for a lot.”


No MBA? Don’t despair (Analysis)

By Alice Kubicek

In 1977, I graduated with a bachelor’s degree in history and psychology, with some journalism experience. But instead of law school or the newspaper business, I opted to pursue an MBA.

I believed then, and still do, that an MBA would provide me with a more complete view of the business world and round out my education for a career in the business sector. Where psychology and history gave me the ability to observe, assess and document relationships, interpersonal dynamics and the concept of power, the MBA offered the context and discipline to see it through the eyes of business leaders.

In the 1970s and 1980s, there was an ongoing debate between academia and the business world about the value of an MBA. Some employers expressed concern young MBAs fresh out of school would view themselves as better than those who had the work experience but lacked the academic training. You can imagine how this would have been received by a manager with 10-plus years of sweat equity.

Eighty-one per cent of senior executives across Canada are more likely to consider an applicant with an MBA for a high-level job than a candidate without one, skills and experience being comparable, according to a study by Environics in 2010. That same year, in a Globe and Mail article, Ken Werker of Odgers Berndtson affirmed “MBAs offer an enhanced skill set that includes such things as critical thinking, specific expertise and well-developed networking.”

But internal candidates looking for promotions without an MBA need not despair. The majority of senior executives recognized the value of hiring from within, according to the Environics study, with 39 per cent suggesting an MBA was somewhat important and only eight per cent claiming it was very important.

In other words, 53 per cent believed the degree was less important for internal candidates although it could bring an extra “level of knowledge and sophistication to the company.”

In the Pulse Survey by Canadian HR Reporter and the Human Resources Professionals Association (HRPA), 52 per cent of respondents said an MBA is helpful but not critical to fast-track to a senior role, while only 18 per cent believed it to be critical — although 40 per cent claimed to be called upon to provide business rationale and analysis in their proposals.

Looking at the data, one could say — for the most part — that the larger the organization and the less experienced the HR professional, the more valuable the MBA is perceived to be in facilitating one’s future promotion to a senior role.

For the 65 per cent of respondents who hold the Certified Human Resources Professional (CHRP) designation, 73 per cent believe it has provided them with sufficient background to take on a senior role. Yet only 18 per cent currently are at the executive level at their organization and, of those, 33 per cent said the CHRP provides sufficient business grounding.

A self-fulfilling prophecy, perhaps, since their success could have resulted from commitment to the organization over a number of years rather than an academic degree.

As a matter of context, they work predominantly in the manufacturing, government, health and not-for-profit sectors.

Another interesting statistic highlighted that 23 per cent of the 840 human resources professionals do not hold a professional designation and 38 per cent of them are seriously looking at going the MBA route. Meanwhile, more than 38 per cent of respondents in middle management believe their HR training provided sufficient business background to take on a senior role, with another 26 per cent unsure.

Clearly, there is a need to provide additional business support to the HR career professionals at the entry to mid-management levels, and specifically in the areas of strategy and implementation, business operations and finance and audit.

Alice Kubicek is managing director at management consulting firm akpsGlobal in Ottawa, and sits on the Human Resources Professionals Association’s board of directors. She can be reached at alice@akpsglobal.com .

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