Pursuing an online MBA may require a significant financial investment upfront, but experts say the degree can often be parlayed into higher salary earnings over time.
Will your online MBA result in a higher salary?BY Kara DriscollApril 24, 2021, 10:23 am
The cost of an MBA degree can fall anywhere in the range of $60,000 to more than $200,000 in total, but most grads see an increase in earning potential almost immediately. According to the Graduate Management Admission Council’s 2020 Corporate Recruiters Survey, MBA graduates will earn more than their colleagues without one.
At $115,000, the median salary of MBA grads is 75% more than that of people with a bachelor’s degree alone, the survey found. The compensation increase is more apparent for graduates going into consulting, finance, and technology. At $145,000, the median salary of MBAs in the consulting industry is twice that of bachelor’s degree holders, according to the survey.
The Graduate Management Admission Council is not the only organization to determine that MBA graduates will earn more than their colleagues without the advanced degree. MBA recipients in 2021 will earn over $29,000 more than individuals who earned their bachelor’s degree in business this year, according to compensation projections from the National Association of Colleges and Employers.
Pursuing an MBA doesn’t guarantee a higher starting salary, of course. Rather, online MBA students obtain critical workforce skills when they “wholeheartedly invest” in the program’s networking opportunities in addition to the coursework, according to Lorna Patches, executive director of the professional resource center at the University of Kentucky’s Gatton College of Business and Economics.
“You’re investing not only tuition, but time, energy, and a commitment from your family for their support,” Patches says. “From working with candidates across all of our programs, the return on investment is head and shoulders above what’s invested in terms of tuition for the program.”
How do salary prospects stack up for different types of MBA programs?
You may spend considerable time debating the pros and cons of various types of MBA programs. But business college administrators say earning potential is similar for graduates of online MBA and traditional, in-person MBA programs.
Graduates of the Ohio State University Fisher College of Business’s hybrid working professional MBA (WPMBA) see substantial benefits from completing the program, according to Mandy Williams, director of career management and corporate relations at the school. The 2019 and 2020 graduating classes each saw an overall average post-MBA salary increase of $20,000.
The highest-paid salaries for OSU WPMBA grads were in operations logistics and operational excellence roles. And the top roles for those students looking to grow their careers were in information technology, marketing and sales, and general management, according to Williams.
“Consulting, health care, technology, and financial services have been the most popular industries for our working professionals and are the ones reporting the highest salaries,” she says.
The value of the degree doesn’t change with an online program
Companies see the same value in an MBA degree, no matter how the student attended class, according to Mark Johnson, associate dean of MBA programs at Wake Forest University School of Business. Instead, salary prospects depend more on the quality of the institution, he adds.
Johnson says prospective students should remain open-minded and explore as many different schools as they are willing to research in order to find a fit that will result in an education that has a return on the investment.
“Look at the curriculum, but also ask questions about career placement,” Johnson says. “Do graduates of the program receive a promotion and/or salary increase shortly after graduation? Those are things some people don’t think about when they’re considering programs.”
Wake Forest MBA students experience an average 23% increase in salary after graduation, while 59% of students receive at least one promotion, and 35% change organizations after they get their degree, according to data from the university.
“Companies are looking for people who have work experience but also demonstrate a willingness to invest in themselves,” Johnson says. “An MBA is a significant financial and time commitment, and it’s that commitment that can result in a salary increase or a promotion.”
At the University of Mississippi, online MBA graduates’ salaries range from $100,000 to $250,000, which is on par for mid-career business professionals, according to Walter Davis, faculty director of MBA programs and professor of management at the University of Mississippi School of Business Administration.
Created in 2006, the online MBA program at Ole Miss is well established compared with other online MBA programs, Davis says. Because graduates are learning from the same professors and gaining the same skills as traditional MBA students, he adds, students should be confident in an increased earning potential from their degree.
“You should weigh the reputation of the programs that you’re considering against the cost of tuition, the cost of the materials,” Davis says. “It’s a highly personal decision as to whether the value, cost, and reputation put together makes sense as an investment for your career.”