MBA Starting Salaries
It’s Pay-back Time!
Let’s face it, MBA starting salaries are pretty important to anyone interested in gaining that qualification. Quite rightly so, considering the investment any MBA student makes in time, effort and finance.
Throughout this site we stress the broader gains to be made from this kind of investment, such as improved career opportunities, personal growth, and the development of effective management and leadership skills. But we’re realistic enough to know that financial pay-back is still important and MBA starting salaries will play a big part in the decisions you make about when, where, and how you will study.
So where do you go to find useful, reliable information to inform your decision about committing to an MBA?
MBA program rankings are a good place to start, especially those from leading business publications. These are both an excellent source of information about starting salaries paid to new MBA graduates, and a means of comparing different business schools.
MBA Starting Salaries in The Ranking Lists
A good place to start is Fortune’s list of highest (and lowest) paid MBA ranking with salaries. This provides pre and post-MBA salaries earned by graduates of 50 top business schools. MBA pay: a crystal ball is another Business Week article which reflects on MBA salaries up to 20 years after graduates completed their program. Whilst Business Week acknowledge limitations in the exercise, the article is still thought-provoking reading for anyone interested in potential differences in MBA starting salaries and long-term financial benefit.
A second reputable publication, the Financial Times, provides a very useful range of data to help you understand MBA starting salaries. Their rankings table allows you to select different fields to see how business schools rank. For example, the FT list allows you to view:
- Average starting salary, three years after graduation.
- Weighted salary, to take into account industry sector variations.
- Salary percentage increase, based on pre-MBA salaries.
- Value for money, which takes into account costs and duration of the program.As ever, rankings can only give you a guide to the kind of salary a typical MBA graduate can command. There are numerous other factors to consider.
For example, you should also consider such things as:
- The kind of industry or sector you’re currently working in, or are thinking of entering.
- Geographical location – of the business school, and of your workplace.
- Economic climate.
- The business school’s employer and sector links.
- Pre-MBA experience, what you already bring to your employability.
- The fact that talented, determined individuals tend to do well wherever they have studied!
Important as these points are, a report by the Graduate Management Admissions Council (GMAC) contains one interesting finding. According to the estimates of recruiters, during the five year period 2000 to 2006, starting salaries for MBA graduates in the United States were on average $11,000 more than for graduates of other programs. This is a notable point for anyone researching MBA starting salaries, and worth reading in more detail in the full GMAC MBA Salary article.
MBA Starting Salaries – the Bigger Picture
Read our new book:
Uncommon Leadership: how to build competitive edge by thinking differently
“a tour de force … all integrated into a fascinating intellectual package”
Professor Dennis J. Garritan, Adjunct Professor, Harvard University
A good starting salary after completing your MBA may well be a measure of success and, given the cost of an MBA, it’s only fair to expect an adequate pay-back. Yet important as salary is, it shouldn’t be your only consideration.
In their idea of “enduring success”, Harvard academics Howard Nash and Laura Stevenson, suggested that a more rounded and balanced view of success was needed. They drew their conclusions from talks with high achievers, interviews with successful professionals, and by surveying more than 100 executives attending Harvard management programmes.
Nash and Stevenson concluded that, for these people, success meant a range of things including: achievement; happiness; doing something significant; and leaving a legacy. It’s appropriate that such a conclusion should come from researchers from one of the highest ranking business schools, and it’s also notable that financial reward is not on the list!
You can read more about these ideas in our article: Success Maker, and a summary of Nash and Stevenson’s ideas can be found at Harvard’s working knowledge site: Enduring Success. Use these links to help you think more widely about the MBA you’re proposing to do.. MBA starting salaries might be important but they are only a starting point in terms of the real value of an MBA.
To help you with your decision-making we consider three of the more popular MBA ranking publications in our article: MBA School rankings. In addition, different business publications have adopted different criteria to create their rankings, so it’s important to know the basis on which a particular list has been generated. In our article: MBA Business School Ranking we discuss some differences, and the basis on which three of the main ranking lists have been devised.