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GMAT Versus GRE: Don’t Stick A Fork In The GMAT Just Yet

Reports of GMAT’s death, it seems, have been greatly exaggerated.

As Poets&Quants has reported, for several years the Graduate Record Exam has been improving its standing as chief alternative to the Graduate Management Admission Test, with top-ranked schools each year reporting a growing share of MBA program entrants who eschewed the latter in favor of the former. The onset of the coronavirus pandemic and the launch of online versions of both tests only reinforced the impression that one exam was ascendant and the other struggling: The GRE got rave reviews, the GMAT not so much. B-schools’ move to make admission test-optional, while temporary in most cases, further eroded perceptions of the GMAT as an essential component of MBA admissions.

So the GMAT is doomed and the GRE is the test of the future for MBA aspirants, right? Not so fast. A new poll from a leading MBA consultancy shows that even as the GRE has made big gains and GMAT has slipped in recent years, most candidates for graduate business education still prefer the GMAT by wide margins. In MBA Crystal Ball’s LinkedIn and YouTube poll of more than 3,000 respondents, 21.2% voted in favor of GRE, while 78.7% gave GMAT the thumbs up. In other words, 4 out of 5 applicants expressed a preference for GMAT over GRE.

“I was a bit surprised,” Sameer Kamat, founder of MBA Crystal Ball, tells P&Q. “I was expecting a bigger share for GRE, possibly in the 30%-40% range.”

ANOTHER MAJOR SHIFT: TOP MBA EMPLOYERS MOVE AWAY FROM GMAT

Sameer Kamat, founder of MBA Crystal Ball

The GRE, administered by Educational Testing Service, has one major advantage over the GMAT: It can be used for admission to any graduate school, including law school. The GMAT, administered by the Graduate Management Admission Council, is strictly a B-school entrance exam, and one that — in the current pandemic-dominated environment, at least — seems increasingly less vital to the educational aspirations of MBA candidates.

There’s another big shift underway that bears on this situation: In past the GMAT has been seen as instrumental in not only gaining admission to B-school, but in securing a desirable job post-MBA. But as P&Q reported recently, that may be changing in one major industry, as the top three consulting firms — major employers of MBAs from all the top-tier B-schools — place less emphasis in their hiring on the entrance exam employees used to get into B-school.

“While the GMAT/GRE choice doesn’t matter as much to the B-schools, over the years it’s become common knowledge that there are several employers (specifically in industries such as consulting and banking that attract the highest number of MBA grads), who use GMAT scores in their hiring process,” Sameer Kamat says. “Applicants who plan to get into these sectors have traditionally preferred taking the GMAT.”

MBA Crystal Ball’s poll shows that graduate business education aspirants may not yet be fully aware of the reality of the shift.

“As P&Q has published in a recent article, MBB might be changing their stance on this,” Kamat says. “The absence of GMAT scores will not stop them from hiring the strongest candidates. It may take a while for other leading MBA recruiters to show the same flexibility. If and when that happens, GRE may gain a bit more over GMAT.”

GMAT IS A ‘RELIABLE INDICATOR’ OF POTENTIAL

P&Q examined the data on GMAT and GRE submission rates reported by U.S. News in its latest ranking, finding that GRE submissions went up at 16 schools, and down at only four. However, GMAT commonly accounts for twice as many submissions or more, and at some schools — Stanford GSB, Harvard Business School, Chicago Booth School of Business, Carnegie Mellon Tepper, and others — the ratio is deeply lopsided in GMAT’s favor. See the next page for a table showing all the numbers from the top 25 U.S. schools.

Meanwhile, in its new poll, MBA Crystal Ball recorded not only the test preference of respondents, but qualitative responses, as well. Some examples:

“I will go with GMAT,” says Shardul Pendharkar, an MBA aspirant in India. “GMAC has tracked academic performances and career progressions of many high GMAT scorers after the test was established. Their research has shown a strong correlation between a high GMAT score and a strong MBA performance/post career progression. GMAT has proven to be a very reliable indicator of a candidate’s future potential and it’s for this reason that schools value this score a lot!”

On the tests’ respective difficulty level, Abdulmalik Abdulraheem of Nigeria writes: “I’ve written both exams and I can tell you the GRE Quant is no longer as easy as it used to be. The difficulty level has increased, though it’s still not as rigorous as the GMAT Quant. So the conclusion is if you can score a 90th percentile on the GRE Quant you can do almost the same with the GMAT.”

Though in the minority, Archit Aggarwal of India writes in support of GRE “because of its non-adaptive nature”: “You just have to perform well in the overall section and have the flexibility to skip. However if you are fine with the adaptive approach then I’d say, go with GMAT (especially engineers), as GRE verbal could be enigmatic. Regarding quant I agree with other comments, it’s not that easy anymore. If GMAT quant is 9/10, GRE is definitely 8/10.”

MBA Crystal Ball

See the next page for a table showing the percentages of GRE and GMAT submissions by new entrants to the top U.S. MBA programs, as reported by U.S. News among the data in their latest ranking.

Graphic courtesy of AtlanticGMAT.com

THE CHOICE OF TESTS DIFFERS BY MBA APPLICANT TYPE

Another respondent to MBA Crystal Ball’s poll says the respective tests appeal to different types of applicant.

“The GRE is biased in favor of people with qualitative/social sciences backgrounds,” says Andrew Foley, a graduate business education aspirant in the U.S., “and the GMAT privileges more quantitatively-oriented applicants. I also think we need both types of thinkers in business schools and in top management positions afterward: management is a messy business of numbers AND people, after all. Accepting both tests helps ensure that we have paths for each type of applicant!”

Sameer Kamat, MBA Crystal Ball’s founder, says it’s clear that the GMAT is not ready to concede its market dominance just yet. But he adds that circumstances might lead to a third scenario: More schools going test-optional, and both tests losing favor.

“For the time being, GRE probably has a little more work to do before it can overtake GMAT,” he says. “While both these biggies fight for dominance in the ring, there’s also the possibility that many more B-schools might pull the rug from under their feet by making their test-optional policy permanent or offering score waivers.”

DON’T MISS: GRE SCORES AT THE TOP 50 MBA PROGRAMS IN THE U.S. or IN A GMAT-OPTIONAL WORLD, AVERAGE SCORES PLUMMET AT THE TOP 50 SCHOOLS

The post GMAT Versus GRE: Don’t Stick A Fork In The GMAT Just Yet appeared first on Poets&Quants.