Pursuing an MBA requires a major investment of time and energy, with most programs requiring at least two years of a rigorous curriculum, extracurricular activities, networking, and internships—not to mention the months of test preparation many students undergo to get admitted to their program of choice and the cost of going back to school.
The good news? All that effort is worth it, as 87% of business school alumni have experienced a positive return on investment on their graduate business school degree, according to a survey of 3,600 grads conducted by the Graduate Management Admission Council (GMAC). The study also found that 94% of alumni rate the value of their graduate business education to be good, excellent, or outstanding.
“In the face of an ever-evolving work environment, international travel restrictions, and rising education cost, many are asking the question: ‘is a business degree worth it?’” Sangeet Chowfla, president and CEO of GMAC said in a press release. The answer is a resounding ‘yes,’ Chowfla noted, as research shows that graduates say their business degree increased their employability and earnings power, prepared them for leadership positions, and supported their desired lifestyle, he says.
The report, published in March, and consists of findings from surveys given to the participants over 12 years—offering a long-term perspective on the value of an MBA. Questions were first asked as respondents were pursuing their graduate business degree, and then after they completed their program. Below are three key insights from the report.
MBA students are motivated by increasing their job opportunities
Among the MBA and business master’s degree candidates surveyed by GMAC, 74% cite the prospect of more job opportunities as a motivation for pursuing their degree. Other popular motivations include increasing their salary potential and developing general business knowledge, skills, and abilities.
The study indicates most of those students found what they were looking for, as students see a return on investment both immediately after graduating and over time.
Among the class of 2021 MBA graduates from full-time programs, 87% of these students received job offers within three months of finishing their programs, according to the MBA Career Services & Employer Alliance. And 73% of graduates had a job offer before they had finished school.
These employment opportunities were largely facilitated by business schools themselves, with 68% of job acceptances by last year’s class coming from internships, interviews secured through their schools, job postings on school career systems, and activities supported by the school career center.
MBA graduates are seeing significantly higher earnings because of their degrees
The cost of pursuing a graduate degree can be daunting, but research shows that, on average, graduate management or MBA graduates earn significantly more than they would without their degree. They also experience notably higher earnings throughout their careers.
The GMAC report finds that the median starting salary offered to MBA graduates last year was $115,000, compared with the $95,000 pay the same employers planned to pay new hires that came directly from the industry. Over their lifetime, an MBA graduate can expect to earn $3 million more than someone with only a bachelor’s degree, according to GMAC.
And employers certainly take notice of applicants with MBA degrees; 54% of employers said business school graduates tend to have a fast-track to upper-level positions, and 68% said leaders in their organizations typically have a graduate business degree, according to GMAC’s 2021 corporate recruiters survey.
Moreover, 70% of employers agree that within their organization, those people with a graduate business school education tend to earn more than others, according the recent GMAC report.
Business school graduates are using their degrees to pivot careers
The GMAC report notes that a rapidly changing business landscape is prompting professionals to prepare by acquiring a diverse set of skills. There is a lot of value in being able to shift gears quickly no matter your industry.
Of the 3,600 survey respondents, 51% said they were pursuing an MBA to change their career path. The skill-set acquired in an MBA or graduate management degree program is attractive to many prospective students because it enables them to be dynamic across jobs and industries.
In fact, 38% of alumni changed industries after graduating, and another 37% of those surveyed changed job functions. Consulting takes in the most industry-switching graduates, with more than 70% of those who worked in consulting post-grad moving from another industry.
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