Recently there have been many studies being produced to quantify the benefits and value of an MBA. For those who are not as familiar with an MBA, it’s a master’s degree in business administration. The concentrations for an MBA education can range from accounting to entrepreneurship to management and everything in between. It is commonly assumed, and rightly so, that the leading business magnates of the world hold MBAs such as Walmart CEO Doug McMillon, who earned his MBA at the University of Tulsa, Facebook COO Sheryl Sandberg, an MBA alumna of Harvard Business School and even NBA Hall of Famer Shaquille O’Neal holds an MBA from the University of Phoenix.
These are tremendous success stories and are usually the only ones to make the mainstream media. But before you apply to business school, please look below at data produced in 2018 that takes a closer look at how MBAs impact salaries, career advancements and more:
CNBC produced the following data of the Top 5 MBA Programs and starting salaries:
- Harvard University (Tied): Average starting salary: $158,049
- University of Chicago (Booth) (Tied): Average starting salary: $159,815
- University of Pennsylvania (Wharton): Average starting salary: $159,815
- Stanford University: Average starting salary: $159,440
- Massachusetts Institute of Technology (Sloan): Average starting salary: $148,451
The Forté Foundation did an in-depth study and surveyed 900 male and female MBA alumni who graduated between 2005-2017 on the economic mobility of women and minorities with MBAs and the numbers are eye-opening.
- In their last pre-MBA position, first post-MBA job, and their current role, men earned more than women at each juncture.
- The gender pay gap widened between women and men post MBA. On average, women earned 3% less than their male counterparts pre-MBA, the gap widens to 10% for first post-MBA position, and 28% for current compensation, adjusted for years of experience.
- There was a positive return on investment from the MBA with a 63% salary bump for women and 76% for men from the last pre-MBA job to the first post-MBA role.
- For minority women and men, the return on investment is even greater than non-minorities in their first post-MBA job in terms of a salary bump: Women (minority 70%, non-minority 63%); Men (minority 84%, non-minority 70%).
- The pay gap narrows post-MBA between minorities and non-minorities. (24% pre-MBA, 16% first post-MBA job, 12% current role)
- Minorities still earn less than their non-minority peers at every juncture from pre-MBA to their current job. The most notable pay gap is between non-minority men and minority women in their current position, a difference of 52% or $76,589.
When it comes to career advancement and opportunities resulting from acquiring an MBA, this study examined other typical measures of career progression including a number of promotions and direct reports plus level-title, since the first post-MBA position. The data revealed the following:
- The outcomes revealed that, on average, men have received 2.3 promotions since completing their MBA program, while women have only received 1.8.
- Men have an average of 3.3 individuals reporting to them, women only have an average of 1.8.
- Men have achieved, on average, the equivalent of the Director level within their organizations; women trail behind one rung on the career ladder with an average level of Senior Manager.
- There were no statistically significant differences between minorities versus non-minorities.
Is an MBA worth it?
To quote the famous philosopher Jay-Z, “Men lie, women lie, numbers don’t”. There’s an over 63 percent salary bump or higher post-MBA for both minority and non-minority women. Though the salary boost for men post-MBA is higher at 75 percent.
These findings, in my opinion, are as accurate as they come. I received my MBA in 2013 from Mount Saint Mary’s University in Los Angeles, CA and just as the data presented, I was offered a new position with a considerable salary increase. Eventually deciding to strike out on my own, I used all the knowledge acquired during my time in school and skills learned in my first post-MBA job to do so successfully.
If questions still linger, please reach out to me on social media for more insight at @JustinKey101.