Job Options and Salaries for MBAs
Are you considering going back to school to earn a Master of Business Administration (MBA)? When making this decision, you should consider your career goals, the admissions requirements, costs, and your time commitments. When examining the costs of going back to school for your MBA, you may want to consider your future job opportunities and potential salaries.
Average Salary Increases
Although the reasons people go back to school to earn an MBA vary greatly, many prospective students hope to advance their business career opportunities and increase their salary earnings.
There are a lot of factors that impact post-MBA salaries, such as the university your degree is from, your role at your company, previous work experience, and the industry that you work in, but on average post-MBA salaries were significantly higher than pre-MBA salaries. Forbes conducted a comprehensive research study on accredited business schools ranked in the top 50 and pre- and post-MBA salary comparisons and found the following results:
- Post-MBA starting pay increased 50% from Pre-MBA starting pay for full-time students.
For part-time MBAs, post-MBA starting pay increased 41%.
- By the end of five years post-MBA, pay increased 80% compared to post-MBA starting pay for full-time students.
For graduates of part-time MBA programs, pay increased 56% after five years post-graduation compared to post-MBA starting pay.
These results are consistent with many other reputable research studies. Now let’s take a look at the different industries and their average salaries for MBA graduates.
Average Salaries by Industry
The salaries that recent MBA graduates earn vary widely depending on the industry. MBA students that go into consulting tend to earn the most whereas their classmates that go into the nonprofit sector earn significantly less on average.
For 2016 full-time program graduates, the average salary for consulting was $126,919 and for nonprofits, $81,776 according to U.S. News & World Report. For the class of 2016, the highest paying industries were consulting, financial services, and technology for full-time MBA program graduates (see Table 1 below). Also, graduates who earned the highest salaries attended a top-ranked university. All of the ten schools where students earned the highest average salary and bonus were ranked within the top 14 in the 2018 Best Business Schools rankings. Job opportunities are top consulting companies are competitive, and some companies will ask for student GMAT test scores as part of the job application requirements.
Table 1. Salary Breakdown by Industry
Class of 2016 graduates of the full-time MBA program
|Consulting|| $127,000 |
|Financial Services||$117,000 |
|Healthcare|| $103,000 |
|Consumer Packed Goods||$98,000 |
|Real Estate||$97,000 |
U.S. News & World Report
Average Salaries by School
As mentioned above, the ranking of the university you attend may also impact your starting salary post-MBA. A recent study from BusinessWeek of MBA salaries found that the median base salary for MBA graduates is $105,000. However, this varies significantly by the school. For example, the average post-MBA starting salary of Harvard Business School graduates is $134,000 while graduates of second-tier schools, such as Arizona State or Illinois-Urbana Champaign, earn an average starting salary of $72,000. As per US-News average salary of Darden Graduates is ~$154,000, Stanford, Wharton ~165,000
If you are interested in specific MBA programs, do your research and look at the statistics for those universities. Recent data on their MBA graduates can help you set realistic expectations on what your future earnings may be. For example, the Ohio State University’s business school programs salary and outcome data for recruiting purposes.