If you’re on the fence about finally getting your MBA, recent studies have shown how much an MBA can increase your salary.
With the rising costs of MBA programs, it’s vital to take a hard look at how much an MBA increases wages versus the degree cost.
TransparentCareer and RelishCareers recently published a study that looked to answer the very question of how impactful MBAs are in relation to overall salary. In a survey of over 11,000 MBA graduates and student data points, they collected and analyzed data for nine years ending in 2018.
Average salary increases after obtaining an MBA
According to their study, MBA graduates reported an average salary of $36,742 more than their coworkers without a degree. The study further showed the average salary of an employee before they earned their MBA was $79,505. On average, their average wage after obtaining their MBA was $116,248.
Zach Mayo, a co-founder and the director of product development at Relish stated, “Before this analysis, we were confident that we would see a significant salary increase, but the magnitude of that increase was surprising.” Their study results made waves and emboldened the MBA program coordinators to continue to raise tuition slowly.
Industries with the largest gains
From the same study, Relish and TransparentCareer reported the five industries that saw the largest salary increases after employees obtained their MBA:
- Consulting – pre-MBA = $86,187 / post-MBA = $132,601 (a 53.85% increase)
- Food, Beverage, & Tobacco – pre-MBA = $63,069 / post-MBA = $104,319 (a 65.4% increase)
- Private Equity – pre-MBA = $98,393 / post-MBA = $136,132 (a 38.35% increase)
- Investment Management – pre-MBA = $82,531 / post-MBA = $121,376 (a 47.07% increase)
- Technology, Internet, & Ecommerce – pre-MBA = $85,134 / post-MBA = $121,897 (a 43.18% increase)
Industries with the lowest gains
The study continued on to show the five industries with the lowest reported increases. This is how they stacked up:
- Education – pre-MBA = $59,681 / post-MBA = $74,507 (a 24.84% increase)
- Accounting & Audit – pre-MBA = $67,952 / post-MBA = 88,946 (a 30.89% increase)
- Law – pre-MBA – $97,229 / post-MBA = $105,366 (a 8.37% increase)
- Restaurants, Hotels, Hospitality, & Tourism – pre-MBA = $68,521 / post-MBA = $83,502 (a 21.86% increase)
- Government, Politics, & Military – pre-MBA = $77,645 / post-MBA = $90,631 (a 16.72% increase)
Employers still have confidence in MBA programs
Employers continue to compensate MBA earners more than their coworkers without degrees because MBAs still have a certain stigma about them. According to MBA.com, nine out of ten corporate recruiters believe MBA graduates can hit the ground running and become successful in their organizations.
In addition to the usual stigmas, employers believe MBA holders generally have a larger skill set to draw upon and can build up strengths and diversify in other areas faster than other employees. MBA programs also tend to prepare employees for leadership and management positions in organizations.
An increase in communication skills
MBA programs require clear and concise communication and demand graduates to demonstrate competency in effective communication. The Graduate Management Admission Council surveyed recent MBA graduates about their opinion about MBA programs and communication skills. GMAC found four in five graduates believed their communication skills were significantly improved due to their MBA program.
Since communication skills are increasingly important in our remote work economy, employers are actively hiring people with practical interpersonal skills and professional credentials. Employers are increasingly investing more money into employees they hope will pay off in the long run.
If you’re looking for an increase in salary and long-term investment in yourself, an MBA may be the solution.