|By Ronald Alsop, CareerJournal
Jean Wyer is a seasoned recruiter at PricewaterhouseCoopers, but a recent headhunting request took her aback. Business schools were calling on her not to hire their graduates, but rather to help them find accounting professors.
That experience showed “just how dire the shortage of accounting Ph.D.s is becoming,” says Dr. Wyer, a principal at PwC. “What terrifies me as a practitioner is the possibility that some schools may decide to stop having accounting majors if they can’t find enough qualified people to teach.”
The growing shortage of doctoral graduates from business schools is indeed worrisome. The accounting field is especially feeling the supply-demand pinch. But other disciplines such as finance and management are suffering from a scarcity of Ph.D.s, too, as they try to replace professors who are retiring or moving into corporate and consulting jobs.
AACSB International, the accrediting organization for business schools, estimates a shortage of 1,000 Ph.D.s in the U.S. this year that will grow to 2,400 by 2012. Some universities, particularly public schools, have cut back on Ph.D. programs because they’re costly to operate. In addition, AACSB found in a survey of deans that many have limited their enrollment because of fewer qualified applicants.
For students, the Ph.D. shortfall means larger classes and more online content. It also is pushing schools to steal professors from their competitors, driving up the cost of salaries, summer supplements, and other benefits such as research support.
James Thomas, dean of the Smeal College of Business at Pennsylvania State University, is concerned about the rise in salaries as he tries to fill 11 vacant positions, including nine that are tenure track. “If we fill all of them, we will have to do some budget juggling given the salary and supplement increases dictated by the present faculty marketplace,” he says. “Professors are becoming more nomadic as they go where the money is; moving to another school may mean a 50% increase in compensation.”
Dr. Thomas successfully countered in a couple of recent raids on his accounting faculty and says “merit increases, summer support and endowed professorships” are becoming even more important retention tools. Some schools also are offering reduced teaching loads with more time for research, as well as a faster route to tenure.
According to AACSB, newly hired professors with doctorates commanded average salaries of $137,400 in 2006, up from $113,400 in 2000. But those are just the averages; some faculty stars may fetch salaries of $250,000 or more.
Those fresh out of doctoral programs earned an average $100,800 in 2006, compared with $77,200 in 2000. New doctoral graduates fare especially well in accounting and finance, with average salaries of about $114,000.
“Sooner or later, the price factor will kick in, and more people will view becoming a business school professor as quite attractive,” says Mark Zupan, dean of the Simon Graduate School of Business at the University of Rochester. “But that hasn’t happened yet.” For now, Dr. Zupan is courting midcareer professors, who are starting families and find the quality of life and cost of living in Rochester, N.Y., appealing. “Rookies are too mobile,” he says.
The best short-term solution appears to be enlisting more adjunct faculty from the business world. While schools can’t go too far in hiring faculty without doctorates and still remain accredited, AACSB sees plenty of room for more business professionals.
It recently began promoting its Professionally Qualified Faculty Bridge Program to bring new blood into the classroom. The first one-week bridge session last fall at the University of California at Irvine attracted 26 people with expertise in such areas as accounting, marketing, supply-chain management, information systems and real estate. A second bridge program is scheduled for May at the University of Southern California. “The cavalry is on its way,” declares John Fernandes, president of AACSB.
Similarly, PricewaterhouseCoopers plans to create a program called PwC Teaches that would put the firm’s partners through a short academic training program and then lend them to schools. Dr. Wyer hopes to place more than 30 partners on about 20 campuses, teaching primarily tax and audit courses. PwC also may provide financial sponsorship for employees who want to earn a Ph.D. themselves and teach accounting full-time.
While many managers certainly are interested in academia, especially as they approach retirement, business-school deans are cautious. George Daly, dean of the McDonough School of Business at Georgetown University, is recruiting more non-tenure track faculty from companies, often with M.B.A. rather than Ph.D. credentials. But he is careful to hire people who are “thoughtful and reflective” and can do more than just relate “war stories” from the corporate battlefield.
Penn State’s Dr. Thomas says he receives at least one query a week from executives who are nearing retirement or itching for a career change. “But they forget that engaging a large group of students isn’t something everyone can do,” he says. “I advise them to try their hand at a local community college or even high school before they waltz into a top university.”
Other Readings of Interest
— Mr. Alsop is a Wall Street Journal news editor and editor of The Wall Street Journal/Harris Interactive Business School Year 6 Survey. He’s also the author of “The 18 Immutable Laws of Corporate Reputation: Creating, Protecting, and Repairing Your Most Valuable Asset” (Wall Street Journal Books/Free Press, 2004).
— January 09, 2007