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Utah's best and brightest: brain drain or gain?

Brain Drain or Gain?

After lining up for commencement exercises this spring, the majority of Utah's newly minted MBAs--its best and brightest business prospects--will join the placement line leading to out-of-state employment.

For many years in Utah, brains, along with copper and coal, were considered a chief export item. In some respects, however, we are now seeing a reversal: the Utah "brain drain" is not as bad as it once was; in fact, we may now have a net "brain gain," considering the recruiting efforts of growing Utah-based companies and the fact that many top graduates now stay in state.

Top business graduates are finding more Utah doors to knock on in their job hunts; but once inside those doors, they find a crowded field. As John Bryne, associate editor of Business Week, notes: MBA graduates may not be quite a dime a dozen, but the numbers have increased dramatically in the last 30 years. "In 1960, less than 5,000 individuals received an MBA degree. This year we will graduate 70,000--and some 200,000 more are currently studying for an MBA degree." Bryne adds, "I find it hard to convince myself the world needs 70,000 new MBA graduates each year." In 1974, 370 graduate business schools offered the MBA degree. Today more than 700 institutions offer the degree.

In Utah, more Utah schools now offer graduate business degrees, and more students are seeking them. Last year, Utah colleges and universities awarded some 1,000 graduate business degrees (almost 40 percent of the total number of graduate degrees). About 500 are MBAs, another 220 are accounting, and most of the rest fall in the "soft" people side of organizational behavior, human resource development, and business commun-ications.

Those Who Stay

Not all of the best-paying jobs are out of state. Many Utah businesses are now competing favorably with out-of-state companies in keeping the best-in-class graduates here. Growing companies like Novell and WordPerfect are hiring more Utah grads at very competitive salaries, one reason for the housing shortage in Utah County.

Bill Siddoway, associate dean of the BYU Marriott School of Management, said business graduates who stay in Utah find lower living costs and an increasing number of job options. "Several local companies promote the hiring of in-state graduates, so we are seeing more people staying." The University of Utah has by far the highest number of people who remain in Utah after graduation--about 75 percent of their MBAs stay in state.

Diana Hirsche, director of the master's program at the U's David Eccles School of Business, reported 75 percent of their students are Utah natives and 84 percent of all business graduate students remain in state. "More are staying because Utah's economy is stronger than the economy in other states."

Hirsche said last year the highest starting salary for an MBA graduate in Utah was $68,000; the low was $21,000; and the average starting salary was $37,846. "Starting salaries depend on several factors," she said. "Commun-ication skills, undergraduate emphasis, leadership abilities, a talent for marketing yourself are part of the package. Because MBAs do a variety of functions, those with undergraduate degrees in technical fields tend to get paid more."

Those Who Leave

Utah business loses about two of every three Utah-educated MBAs to non-Utah employers. Those who leave cite low compensation and high expectation. Many graduates leave, hoping to return after gaining experience. Some return and join the work force; others return only to retire. Still others get tangled in the pursuit of a career and never return.

Of the 66 percent who accept out-of-state job offers, many are students who come to Utah only to attend school, and have no intention of staying. BYU management professor Ray Andrus said these graduates simply return home to find jobs.

Andrus said Utah would retain more top graduates if there was more opportunity. "A lot want permanent employment here. They hope to stay but expect to leave in order to get experience. There is still not enough good employment to keep them here."

Michael Vaughn, dean of the College of Business and Economics at Weber State University, said although 80 percent of their students are native Utahns, many enter business programs with the intent to leave the state. They see the degree as a ticket to a better job, a bigger salary, or another school out of state. He reports the average salary difference between the West and the rest of the nation is $2,435 a year.

Karen Landward of the University of Utah MBA placement office said, "We mainly lose those people who want to leave or who want the highest paying jobs. If you are willing to move, you are likely to get more offers because there are more jobs in a larger market. A bigger selection could lead to a more lucrative offer."

At Southern Utah University, about 75 percent of the Masters of Accounting graduates leave upon graduation because of "the inability to get good in-state jobs," said Roger Hillyard, department chair, School of Business. "More students, perhaps even most, would stay if they could find employment. But the majority go to Nevada, Arizona, or California. With so many graduates coming from Wasatch Front schools, our grads have a better chance out of state. Few local companies have the ability to absorb graduate-level employees."

Anita Lowe, Assistant MBA Director at Utah State University, shares the observation: "Local businesses desire to hire in-state grads first, but there are few openings. Most students want to live close to home, but there are only so many jobs." She recently talked with a graduate business student who said: "I don't know whether to wait around for a job or take an out-of-state job and hope to eventually return to Utah. It isn't really a step up to get a graduate degree if I have to take a low-paying job."

Many of the top business graduates from Utah universities come to school from other states or countries and have no intention of staying here after graduation. And that situation is not unique to Utah. Kaye Hanson, associate director of the MBA office at BYU, notes that the dean of business at Boston College said in a recent meeting with the faculty of BYU Marriott School of Management, "Why are you upset with the number of graduates who leave? You have fewer graduates leave the state than we do; moreover, Utah businesses attract some of our best graduates."

Still, many Utah business graduates (and faculty) find that if they want a top job, a competitive salary, and diverse experience, they need to leave Utah. About 75 percent of BYU graduate students leave Utah upon graduation. Associate Dean Bill Siddoway said the main reason is financial: they seek higher starting salaries. Ron Burke, Director of Career Services at the Marriott School of Management, said 25 percent of the MBAs are Utah native, but 75 percent of them leave the state for the best job offer.

No Place Like Home

Utah reclaims many of its top business graduates. They leave for a few years, but then return with valuable national and international experience. Strategically, many grads feel their best long-range option is to get additional schooling or take employment out-of-state, and eventually return to Utah. Others admit that their return is based on nonfinancial criteria: the natural beauty of the state, the relaxed Western pace, a favorable environment for raising children, family ties, and a desire to return "home."

Ray Andrus, the BYU faculty member, is a case in point. A Provo native, he received an undergraduate degree from BYU and then attended Columbia University to get his master and doctorate degrees. He next taught in Iowa and Oregon, did some overseas work, was a Fullbright scholar and an exchange professor in Europe. "But it was always my intention to return," he said.

For Andrus and others, there are tradeoffs to returning. On the plus side, he said, "Our 10 children have benefitted by the move. My childrens' friends have high standards and high goals. And we feel that there is security and peace here. We also appreciate the smoke-free environment and the proximity to aging parents."

On the down side, Andrus said, "Financially, I could have done much better out of state." He also complains of Utah's provincialism: "Culturally, we feel that we have to go out to prove that we are good," he said, adding that he felt it quite an accomplishment to succeed in Manhattan. "It was one of the validating experiences of my life."

The average time away from the state is seven years--it's the old seven-year itch. But another bunch return to Utah to retire. Many retired business executives do volunteer work, render service to the community or university, teach classes, sit on boards, or serve as consultants.

Where Do They Come From?

A high percentage of business graduates at the University of Utah and Southern Utah University are products of Utah high schools. Utah State and BYU attract more out of state and international students: 75 percent of Marriott School of Management students come from out-of-state; over 50 percent of those in USU graduate program are international students. At Southern Utah University in Cedar City, 95 percent of the students are from Utah, and of those, 75 percent are from Southern Utah. Anita Lowe, assistant MBA director at USU, said of the 81 MBAs who graduated last year, 44 are international students (many from India).

Where Do They Go?

About one in four of BYU graduates go to California, Oregon, and Washington. Bill Siddoway said that's due to a combination of higher salaries, desirable climate, a strong support system for LDS people, and because many BYU MBA students are from the West Coast. Ron Burke said that when MBA graduates leave BYU, "they usually go to the region of the country they came from." Other Utah schools report a similar trend of graduates going to a home region.

Grown from Seed

While some states hope to acquire and hire the best and brightest, Utah takes a "home-grown" approach to business scholarship and leadership. Through the Utah 2000 and Partnership Programs, the state's education leaders hope to make Utah schools the best in the nation, particularly for business. Speaking at the Utah 2000 kickoff meeting in December, Jay B. Taggart, state superintendent of public instruction, said, "Our 40 districts are focusing on the objectives of restructuring high schools, involving parents, teaching for results, and funding educational technology."

Brent Rock, superintendent of the Sevier School District, announced, "We have our own strategic plan and 20 business sponsors behind it." Don Holbrook, chairman of the Utah Partnership, said, "We have involved many of the state's most prominent business leaders and have identified 150 action items. So far we have implemented over 100 of them. We hope to make business, education, and government mutually responsible for quality education."

Rolfe Kerr, commissioner of higher education in Utah, cited that challenges of escalating growth. "The high school graduating class in the year 2000 is expected to be at least 30 percent larger than the class of 1990. From 1980 to 1990, the high school graduating class increased by 11 percent while higher education enrollment increased 29 percent, partly because many older people went back to school."

Said Kerr, "We support high quality research that strengthens the nation and provides the seeds and environment for creative new business enterprises and job development."

Governor Norm Bangerter reported on six Utah 2000 objectives: (1) a core curriculum for all subjects; (2) statewide tests to measure progress; (3) a new personal improvement academy and career ladder program for principals; (4) alternate routes to teacher certification; (5) program to recognize outstanding schools; and (6) year-round education in 20 percent of Utah schools with substantial cost savings and improvement in student achievement.

"Still," said the governor, "we have a great deal to do. We must see a removal of the walls of tradition that have held some students and teachers hostage for too long."

President George Bush called in to congratulate Utah's leadership in education and say that "Utah can set the example for the rest of the nation."

LaMar Alexander, U.S. secretary of education, said, "You have created a framework for education transformation in the state of Utah. That's not only nice, it's essential for economic survival. We must raise our standards to remain competitive internationally. We need to reinvent our schools. And you need to push the envelope in Utah. America 2000 has its best chance to succeed here. Utah is out in front."

Of course, "the front" is where the war is, and ultimately, noted Governor Bangerter, that is why the bottom line on the brain drain-or-gain ledger is so significant: "If you intend to sail in harm's way, as did John Paul Jones more than two centuries ago, you need fast ships." If Utah business is to help win the war against illiteracy, ignorance, and non-competitiveness, we will need fast ships--the best and the brightest.

Ken Shelton is editor of Utah Business.
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Title Annotation:Utah business opportunities for business graduates increases; Utah schools strengthen business programs to attract students
Author:Shelton, Ken
Publication:Utah Business
Date:Mar 1, 1992
Words:2181
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