So, you are considering applying to an MBA program this year but wonder whether the time, money, energy, and everything else involved in the endeavor is truly worthwhile. The easy answer is yes—go for it. Chances are high that after you earn your MBA, you will make more money, possess a better knowledge base that will propel your career forward, and have connections that will position you for success. But an MBA is not for everyone, and it is definitely not for anyone who is unsure about what is driving them to pursue the degree. Before you head down this road, think about why you want an MBA and where you want it to take you.
To jump ahead in this article, click on the topic that is of interest to you:
- What is the salary and job outlook for an MBA?
- Which programs offer the best return on investment?
- Other than improved earnings, what do you gain from an MBA?
- How can an MBA build your network?
- How do career goals factor into your MBA plans?
- What is the financial investment of an MBA?
What is the salary and job outlook for an MBA?
If you are thinking about pursuing an MBA, then chances are, you are weighing the degree’s return on investment (ROI). You are certainly not alone. In fact, the Bloomberg Businessweek survey that informs the publication’s business school rankings revealed that in 2022, 71% of the second-year student respondents at U.S. programs indicated that increased compensation was one of the five primary factors behind their decision to earn an MBA. Well, the news is good on that front. That same survey found that in 2023, graduates gained a median of $85,000 in their first post-MBA role, over what they had been earning before they entered business school. Getting an MBA also propels your salary higher than if you had merely a bachelor’s degree. A 2021 study conducted by data analytics company PayScale for Poets&Quants found that graduates of the leading 50 U.S. business schools are expected to earn a median total of $5.7 million in cash compensation after 35 years of post-graduate work—and this is exclusively in terms of salary, excluding bonuses, stock options, health care benefits, and other forms of remuneration. That amount represents a premium of $2.3 million over what individuals who have only an undergraduate degree will earn. Graduates of the MBA programs at Harvard, Stanford, Berkeley, Dartmouth, and the University of Virginia vault to the top with more than $8 million in earnings over that 35-year period, according to the study. Those kinds of numbers certainly make an MBA degree sound worthwhile!
Which programs offer the best return on investment?
Prospective applicants considering the possible ROI of an MBA can calculate what they might expect via simple back-of-the-envelope math: adding the average salary of a school’s graduating students to the average signing bonus, and then dividing that total by the average student debt of those who borrowed. In 2023, to compare the ROIs of top MBA programs, U.S. News & World Report ranked 28 business schools at which graduates of the full-time MBA program average six-figure salaries within three months of graduation—and the findings might surprise you. What are generally considered the most competitive U.S. MBA programs did not even crack the top 25! Harvard landed at number 27 (no, that is not a typo!), while the number-one ranked program was the Zicklin School of Business at Baruch College—which is 49th in the U.S. News overall business school rankings. It tops the ROI list because its students reported an average salary and signing bonus total of $129,050 within three months of graduating, while the average debt was just $17,689. That equates to a salary-to-debt ratio of 7.3-to-1. Now compare that with the ROI at Harvard, where the average salary and signing bonus within three months of graduating is $198,180, but the average debt is $88,757. That puts the salary-to-debt ratio at 2.2-to-1.
For information on full-time versus part-time versus executive MBA programs, click here.
Other than improved earnings, what do you gain from an MBA?
In addition to boosting your income, an MBA can fuel your career trajectory. Learning to work well in teams, solve complex problems, and strategically make decisions can translate into being an effective contributor—and hopefully, leader—in the workplace. Not only do you build technical skills over the course of your MBA studies, but you also gain soft skills in management and leadership that can help you navigate complicated challenges when dealing with people and projects. The professional development your MBA experience will provide will last throughout your entire career, well beyond your initial post-graduate role.
How can an MBA build your network?
An expanded network is another benefit of attending business school. You will meet fellow students in your classes, of course, but also via group work, volunteering, extracurriculars, study trips, and socializing. Given how global most MBA programs are these days—many have classes that are nearly 50% international—students are able to connect with classmates who come from all over the world, thereby expanding their global mind-set. In addition, business schools have vast alumni networks, and students can call upon these connections as needed throughout their career. Long after graduation, you might be invited to interview at a company, and a quick search of your school’s alumni database will give you the names of fellow graduates who work there. Bingo—you have contacts who can help you!
Where you can find the best MBA networking opportunities might surprise you. According to Bloomberg Businessweek’s 2023 MBA rankings, the University of Florida’s Warrington School of Business ranks number one for networking, based on the survey’s index that gauges the quality of networks cultivated by classmates, students’ interactions with alumni, the effectiveness of the career services office, the quality and breadth of alumni-to-alumni interactions, and the school’s brand power, according to recruiters. Rounding out the survey’s top five schools for networking are Georgia Tech, the Michigan Ross School of Business, the Tuck School of Business at Dartmouth, and—tied for fifth—Harvard Business School and the Stanford Graduate School of Business.
mbaMission Career Coach Elissa Harris offers her tips on overcoming networking nerves in this article.
How do career goals factor into your MBA plans?
While salary and job outlook, ROI, skill development, and network building certainly play into why someone would want an MBA, they are not the only factors one should consider. Before you apply to business school, really examine your career goals. The last thing you want to do is apply to a program that will not propel you to where you want to be professionally after you graduate. Although MBAs can generally be found working in every field, you should dedicate time to researching whether the degree will provide what you need to be able to achieve your long-term career aspirations. For example, does the MBA program you are considering have courses that relate to your area of interest? What is the typical level of job placement in the industry you want to target? An MBA will not be worth the investment if you end up scrambling for work at graduation.
For information on setting reasonable career goals, read this article by mbaMission Career Coach Elissa Harris.
How big of a financial commitment is an MBA?
Another important factor you need to weigh is your finances. Although that median $85,000 gain in salary noted at the beginning of this post probably sounds pretty good, not every industry or school will set you up for that kind of financial boost. You need to be real about your risk tolerance. Are you in a position to take two years off of work to complete a full-time program? If not, maybe a part-time or Executive MBA program would serve you better by allowing you to keep working. On the personal front, asking yourself whether now is the right time to go back to school is crucial. This question extends beyond just the financial aspect of pursuing the degree; ask yourself whether you have the time to dedicate to it as well.
As you are considering whether an MBA would be worth the time and other resources that earning it requires, do not be blinded by the potential gain in compensation. Think about what else the degree could change for you in the long term. If you feel that it would advance your career in terms of greater leadership opportunities, then you very well might be making the right choice about applying to business school.
If you have questions about MBA application strategies or about which schools you would be competitive at, sign up for a free 30-minute consultation with an mbaMission consultant.
