Generalists Get Better Job Offers Than Specialists

Damon Phillips, a professor at Columbia Business School, recently corroborated with Jennifer Merluzzi, an assistant professor at the University of Tulane. They began studying and researching records of around 400 business students who had graduated in 2008 and 2009 from some of the nation’s top MBA programs. The two created detailed profiles of each of the graduates, which included their work histories before, during, and after college and the grades they had received while in school. The results of their studies showed the individuals who specialized in the area of investment banking during college had been less likely to receive more than a couple of job offers, versus the students who had a wider range of experiences and backgrounds.

Merluzzi and Phillips set out to determine whether generalists truly are favored over specialists throughout the labor market. Does a jack of all trades have better odds of a more rewarding career?

Professor Merluzzi reported that specialists had certainty been penalized by the market. They not only had fewer job offers to choose from, they were also given lower signing bonuses for the positions that were made available to them. There were even cases of specialists in the field receiving over $45,000 less than their generalist counterparts.

When asked what differentiated specialists from generalists, professor Merluzzi said they took into consideration both the experiences and activities focused on the most before and during the students MBA program and throughout their internship periods. A student who had been employed by an investment bank before they began school, focused their attention on finance throughout school, and then completed an internship through an investment bank, would be considered a specialist.

A student who had worked in a field other than investment banking before starting the MBA, such as marketing or advertising, while focusing on finance, completed an internship through a consulting firm, and then began a career in the investment banking field after they had completed their internship would be considered a generalist. Once Phillips and Merluzzi had put each student in one of these two categories, they were then able to compare job offers along with compensation and benefits. The generalist had more opportunities than the specialist.

When asked why she believed being in the specialist category would be a disadvantage, Merluzzi suggested that given the strong institutional mechanisms of screening throughout labor markets, specialization would not hold as much value. For starters, employers may not be satisfied with experiences which incrementally extend previous efforts. Also, without having other information, while specializations show a high level of skill, graduation on its own accord from a leading MBA program is a strong enough signal that an individual is qualified. Therefore, it is no longer an advantage to demonstrate that level of expertise in the individual field.

It has always been sound advice to pick a particular career field, and to become an expert. When asked why this advice seems to differ so much from the result of the study, Professor Merluzzi said that among the top MBAs, there is now a strong leaning toward achieving a consistent profile either as a marketing person or a finance person. The result is many similar people within the market. Specialization becomes a commodity, which delivers less of an opportunity and even smaller chances of advancement once a position has been obtained. It also becomes a factor once a firm or financial institute begins hiring several similar candidates in a particular area of specialty, and they are given the opportunity to compare these specialist candidates against a generalist individual with more diverse accomplishments.

Merluzzi explains that a push for specialization amongst MBAs only started between 5-10 years ago. There are many factors that could have played a part in this spark, beginning with the shock created by the recession. She believes that specialization creates a feeling of understanding among students of the value they receive from a program. The proliferation of one year master’s degrees may also play a contributing role. These programs give students the opportunity to receive a master’s degree of finance for less money and they require less time to complete compared to an MBA. The problem, she mentioned, with these master’s degree programs, is that the core value of a MBA is the business training, and that is still recognized and valued by the market.

According to the research completed by the two professors, experienced hiring managers revealed that they prefer employees who have a more diverse range of attributes and skills. “Someone who has accomplished many things is better than a one trick pony who continues to do the same thing without taking full advantage of everything an MBA has to offer,” was a common response from managers in charge of the hiring process.

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