The popularity of the Master of Business Administration (MBA) degree as a practical career option is both longstanding and well-known. However, the years of hard work and financial expense associated with obtaining an MBA are no less established and evident.
This begs a very important question. When evaluated in terms of total return on investment (ROI), is an MBA worth it?
Will an MBA Increase My Salary?
Due to the significant cost of pursuing an MBA, you should consider it a financial investment and expect it to pay dividends over time. While income generation is only one of many attractive benefits that an MBA can provide, most people who seek an MBA want it to translate into higher salary earnings in the future.
The good news, according to most experts, is that the typical MBA degree tends to deliver great ROI in the long run. This news is particularly reassuring because the average cost of an MBA program is enough to give most people pause.
In her article “Will your online MBA result in a higher salary?,” Fortune Magazine writer Kara Driscoll reports that the average MBA cost, in terms of program expenditures alone, can run from $60,000 to more than $200,000. Despite this hefty price tag, recent surveys by the Graduate Management Admission Council have shown that individuals with an MBA, by and large, significantly out earn colleagues without one.
With a median salary of $115,000, MBA graduates make 75 percent more money than their colleagues who only have a bachelor’s degree. However, it is important to remember that a wide range of elements and characteristics can impact your overall salary trajectory, with or without an MBA. Here are just a few important factors to consider:
Work Experience and Expertise
Of course, no MBA degree comes with any kind of financial guarantee. Countless factors will likely come into play when it comes to determining your future professional endeavors and the financial compensation that will go along with them. The majority of employers, for example, will consider your previous work experience at least as important as any academic degrees you accumulate.
In fact, if you work in the business world while completing your MBA program, you are likely to move up the chain of command at your current company after you graduate. Whether professional or scholarly in nature, practical expertise in the specific areas that are most relevant to you are best positioned to lead to increased income.
As quoted in Fortune Magazine, Lorna Patches, professional resource center executive director at the University of Kentucky’s Gatton College of Business and Economics, says MBA students have the opportunity to obtain critical workforce skills when they “wholeheartedly invest” in their MBA program’s networking initiatives. The right connections can also help you further your professional outreach and help you find better employment and partnership opportunities. Students can help build their industry networks through internships and other practical MBA program initiatives as well as career events such as associative conferences and job fairs.
Business School Reputation
No two business institutions are equal in terms of official accreditation and public reputation. While it is important to consider that the overall reputation of your MBA program may have a substantial effect on your ongoing earning potential, it is also important to remember that name recognition isn’t all that a school has to offer. In addition to ensuring that your school of choice is reputable, you should take care to select one that meets your specific and unique wants and needs. Consider making lists of pros and cons to find the MBA program that is right for you.
Location, Industry, and Demand
Average MBA salary and the overall abundance of high-paying jobs varies considerably according to where you work, the industry on which you concentrate, and the specific skill sets that industry values.
Geographic areas that offer the highest salaries for MBA graduates tend to be major metropolitan areas with extensive and diverse business communities. The best cities for MBA graduates appear in the “Locations Where MBAs Earn Increased Salaries” section below.
Before choosing an area of study for your MBA, you should carefully consider what professional industries or specializations interest you the most. This is particularly important because different industries can pay MBA graduates dramatically different salaries. Industries experiencing high demand are often willing to pay extra for candidates with the expertise that an MBA provides.
Additionally, fields that tend to require high levels of specialization (for example, bioscience or real estate) may offer higher salaries because fewer MBA graduates have garnered that expertise. To learn which industries and specializations are currently paying MBAs the most, read on to find “The Top MBA Salaries by Industry.”
The Top MBA Salaries by Industry
If you want to make more money with your MBA, you may want to follow one of the following career paths:
Consulting and strategy
According to a Graduate Management Admission Council survey, the $145,000 median salary of MBA graduates in the consulting industry is roughly twice the salary of business consultants who only hold a bachelor’s degree.
The US Bureau of Labor Statistics projects an 11 percent growth rate for the technology management field through 2029, driven by the rapid integration of AI technology across multiple sectors. Technology MBA graduates may find roles as software project managers or database administrators.
Large numbers of MBA students pursue the degree because they want to go into business for themselves. In addition to helping you launch a company, an MBA with an entrepreneurial focus can lead to high-paying positions in senior product management among other areas.
Financial services and economics
The US Bureau of Labor Statistics expects the fields of financial services and economics to grow by 4 percent through 2029. The increasingly specialized nature of these fields gives MBA graduates significantly elevated earning potential.
Always a lucrative area of concentration for the average MBA student, a general business focus offers a wide range of job opportunities. The number of high-paying general business positions will increase by 5 percent through 2029 according to the US Bureau of Labor Statistics.
Often becoming senior executives and marketing directors, MBAs in the marketing industry are well paid for their expertise. In fact, the US Bureau of Labor Statistics ranks marketing managers among the top 20 highest-paying occupations, reporting that this profession commands an average salary of more than $140,000.
Locations Where MBAs Earn Increased Salaries
As previously mentioned, your salary as an MBA can vary dramatically depending upon where you choose to live. The University of the People has identified the top-paying cities for MBA graduates as follows:
- New York with MBA salaries that range between $56,332 and $141,722
- Boston with MBA salaries that range between $59,810 and $133,549
- Chicago with MBA salaries that range between $53,722 and $126,980
- Houston with MBA salaries that range between $52,881 and $120,018
- Atlanta with MBA salaries that range between $50,920 and $118,139
Salary Is Not the Only Benefit of an MBA
While money is certainly hard to beat when it comes to motivating a career professional, people pursue MBAs for a wide variety of reasons. Furthermore, earning an MBA can improve far more than just your financial bottom line.
The added credibility and proof of ability that go hand in hand with an MBA will open many doors across many industries.
Increased Knowledge, Skills, and Perspective
From improved self-discipline to better communication, a good MBA program will teach you a great deal. Perhaps the most beneficial skill you will hone, strategic thinking is bound to widen your perspective and help you assess opportunities critically.
Sense of Accomplishment
Don’t underestimate the tremendous ego boost that comes with achieving a prestigious MBA degree. In fact, the Haas School of Business at the University of California, Berkeley has reported that “increased confidence” tops the list when it comes to the most important non-monetary benefits of securing an MBA degree.
As long as you choose your MBA program carefully, you are likely to earn a substantial return on your educational investment. Beyond its positive reputation in both the academic and business worlds, the Gary W. Rollins College of Business at The University of Tennessee at Chattanooga offers students a reasonably priced MBA with the flexibility to attend online, in person, or a combination of both.