In business, sometimes it’s hard to stand out from the crowd. You work hard, but so do a lot of your co-workers — and they are looking to get ahead just like you are.
Maybe an extra degree will push you over the top for that promotion.
According to U.S. News & World Report, the National Association of Colleges and Employers say that the average starting salary for Master of Business Administration (MBA) graduates is $79,043, more than $20,000 higher than those graduating with a bachelor’s degree in business. Those numbers go up with the prestige of the school they attend, U.S. News says, all the way up to averaging $173,860 annually with a degree from the top 12 universities in 2021.
And it’s not just the first year that salaries are higher for MBA grads. The returns multiply over time like any good investment.
Salary is not the only benefit of an MBA degree, U.S. News & World Report points out. Graduates make long-lasting relationships that can help them advance in their careers and get higher-paying positions. They can also learn skills that help them to become better managers and leaders in business and in their industries.
Even with the benefits, a 2018 GMAC survey showed MBA applications were down 7% in 2017. Young professionals might not be able to afford to quit work for two years to get the degree, or they may be hesitant to put in the after-hours work to earn their MBA.
Then there’s the cost — about $130,000 for the two-year degree at one of the top 10 U.S. universities, according to MBA Online. If they are out of work for two years, there’s also lost wages.
But a survey by Forbes magazine found that for MBA graduates in the top 50 schools usually paid off the cost of their degree within four years.
Of course, just getting into an MBA program is work. MBA programs look at college grades, work experience, Graduate Management Admission Test (GMAT) scores and a personal essay, where the applicant explains why they want an MBA. If they make it through all that, there will be an in-person interview.
Once the student gets in, they will spend the first two semesters on general management courses in accounting, finance, human and company performance, marketing, operations and strategy. The final two semesters will be spent specializing in one area.
Some people, especially the ones right out of college, are able to study full-time for their MBA while living and attending classes on campus. Others, especially older students, may have to study part-time for two to three years while taking classes after work.
An executive MBA — part-time study for people already in management positions — can be very expensive, but the manager’s company will often pick up part of the cost on for a good employee with even more leadership potential.
So, is the return on time and money worth it? That depends on what you want to do.
Someone planning to be a game warden, jeweler, childcare provider or dentist would do better to look at other advanced degrees.
People wanting to go into business, found a company or become managers are going to benefit the most from an MBA degree.
For those already in the business world, an MBA degree can help them climb the corporate ladder. People in business looking for a different path — into a different area of business — will also benefit from the skills they learn and connections they make while getting an MBA degree. The return on their investment should pay off in career advancement and salary for the rest of their career.
