Students opting for accounting certifications over MBA
As the tuition costs of graduate school continue to rise and student loan debt becomes a growing burden, enrollment in MBA programs is falling as more students opt for professional certifications in fields such as accounting.
Applications to master’s in business administration programs in the U.S. dipped 6.6 percent last year, according to the Graduate Management Admission Council, the fourth year in a row that MBA programs saw a decline in enrollment. Most U.S. MBA programs of all kinds reported declines in application volume this year, including 70 percent of full-time two-year programs.
However, professionals still need to distinguish themselves to earn higher salaries and go up the career ladder, so many are opting for professional certifications such as the CPA and the Certified in Management Accounting (CMA) designation, which is often less expensive and time-consuming than a full MBA program.
While MBA applications have declined in recent years, the Institute of Management Accountants’ CMA certification has seen a 21 percent five-year annual growth rate in new candidates and a 40 percent growth in just the past year.
“We’re seeing a growth in the certification,” IMA senior vice president Dennis Whitney told Accounting Today. “The CMA exam has been growing over 20 percent per year for the last several years. I hate to compare certifications to a degree because I think they’re very different and there’s a lot of value in the degree. However, I think for professionals, certification is a great way to develop skills quickly and then confirm those skills in an objective way. The CMA has grown, but I think other certifications are growing too, particularly some of those micro credentials where you can pick up the skills very quickly. The thing about the CMA is it’s geared toward certain skills that are going to be very important, not only now but in the future. As the accounting profession changes, more and more of those routine tasks are being automated with RPA [robotic process automation], artificial intelligence, and the skills of planning and decision support, strategic planning, analysis. Those are skills that you need to develop, and the CMA program develops those and confirms those skills in an objective way.”
The IMA is beginning to include those skills as part of its training programs for the CMA and other certifications, and for its Management Accounting Competency Framework.
“One thing we’ve done is we have a new certification called CSCA, or Certified in Strategy and Competitive Analysis,” said Whitney. “It’s a very important skill for financial professionals to develop if they want to move up the corporate ladder and be a real true business partner on the finance and general management team. In addition, at the IMA, we’ve been working on a new Competency Framework which outlines a lot of the strategies and skills. There’s more of an emphasis on that, but also on the data analytics technology skills, which we will be working into the CMA program. The CMA program now covers data analytics, but as we continuously update the curriculum, we will be adding even more data analytics to the exam.”
These types of programs may enable some students to pay off their student loans and debts more quickly, but nothing is guaranteed.
“Unfortunately with higher education, the prices are outpacing inflation and students are taking on high levels of debt,” said Whitney. “The good thing about a certification, for example with the CMA, is it sets you apart from others going for a job. When you graduate with a BS in accounting or a bachelors in economics or management, whatever it might be, if you don’t have a certification it can be difficult to get that first job in particular. And even when you get that job, it’s hard to distinguish yourself from others. So earning a CMA helps you get a job. It helps you get promotions and earn more salary. We do a salary survey each year. CMAs on average earn 60 percent higher median total compensation compared to non-CMAs, so it definitely helps with getting the job, with getting more interesting jobs, and higher-paid jobs.”
The IMA has been supplementing its Competency Framework to keep pace with the kinds of skills that employers are asking for today of accountants who get hired in industry jobs.
“We’ve developed it with subject matter experts,” said Whitney. “Then we also released it for public comment and we got some very good input from professionals in the field to ensure that it’s relevant. In addition to the Competency Framework for the CMA program, we also did a job analysis. That’s a research study to determine what management accountants do on the job and what they need to know to do their job effectively. Based on that data, we are currently making changes to the CMA exam which will reflect even more of that technology and data analytics.”