When considering whether to pursue a master of business administration (MBA), several questions come to mind, but most boil down to: Is it worth it?
Hundreds of thousands of students enroll in MBA programs annually to gain the combination of foundational and specialized business skills to excel in their careers.
Yet, business school is a commitment of time, effort, and money. If you enroll in a full-time program, you’ll take two years off work. If you’re in a part-time or Executive MBA program, you’ll juggle studying with your full-time job. The price of an MBA varies by program type and school but, on average, costs between $55,000 and $161,000. Naturally, the question of return on investment (ROI) is a big deciding factor for prospective MBA candidates.
So, how do you know if an MBA is right for you?
Here’s a breakdown of the current demand for MBA degrees, three ways you could experience a return on your investment, and how to decide if it’s worth it.
Access your free e-book today.
DOWNLOAD NOWDemand for MBA Degrees
The skills gained in an MBA program can set you up for success—and organizations recognize the value of hiring MBA graduates.
According to a report from Statista, in 2021, 97 percent of surveyed companies hired MBA graduates, up from 80 percent in 2020 and 50 percent in 2009. The data for 2022 is on track to yield similar results, with a projected 92 percent of companies hiring MBA talent.
This demand for employees with MBAs shows in employment rates of 2022 business school graduates: 86 percent were employed at the time of graduation, according to a report by the Graduate Management Admission Council (GMAC).
It’s clear that organizations value MBAs, yet the same GMAC report also shows an increase in how graduates rank the degree’s value. In 2022, 85 percent of full-time MBA students reported their program’s value as “good to outstanding,” up from 82 percent in 2021. Likely contributing to this trend is the rise in career changes; the majority of 2022 business school graduates who used their degree to make a career change were successful.
The market demand for MBAs—as well as personal demand to reach career goals—is rising. Yet, graduate degrees are an investment, and deciding to pursue one is no small decision. Here are three ways an MBA can provide a return on investment.
Related:10 Reasons It Makes Sense to Get an MBA
3 Ways an MBA Can Provide a Return on Investment
1. Career Trajectory
One way an MBA can provide a return on investment is the expansion and acceleration of your career.
“Business school is a two-year time commitment and a financial investment,” says Vai Schierholtz, director of marketing for MBA Admissions at Harvard Business School. “But, ultimately, the value of all the things you gain from a professional standpoint puts you in a position to accelerate your career.”
In an MBA program, you’ll learn how to solve complex problems and make decisions. These skills are highly valued in leaders and can not only help you land roles with increasing responsibility but lead your team through difficult challenges.
While you can develop these on the job or through other educational opportunities, an MBA provides a unique immersive experience, especially if you take the program full time. It provides the technical and soft skills to be an effective contributor and leader in a business setting.
“An MBA teaches you the hard and soft skills you need in business,” Schierholtz says. “Alumni often say that the hard skills helped them in the first three years of their first job, but their career accelerates after they start using the soft skills they developed in the MBA program.”
2. Earning Potential
Along with career acceleration comes increased earning potential. When you think of return on investment, you might wonder: How will an MBA impact my salary and bonuses?
According to GMAC’s Corporate Recruiters Survey, in 2021, the average starting salary for MBA holders was between 22 percent and 40 percent higher than for bachelor’s degree holders. Seventy-one percent of corporate recruiters agree that employees with a business school education earn more at their companies. GMAC reports that North American full-time MBA students received a 50 percent median compensation increase from pre-MBA to post-graduation: from $80,000 to $120,000.
“There’s a cost for you to go to business school, but the return on investment from a purely financial standpoint is compelling,” Schierholtz says. “Especially when you factor in long-term career prospects, like earning potential and the ability to make an impact in an industry that’s important to you, business school is a fantastic choice.”
While no specific salary is guaranteed, an MBA can set you up to earn more than you would without it.
3. Connections
Finally, an MBA can provide immense value in the form of connections.
Typical MBA programs create sections of students who take the required curriculum together. These sections are often comprised of a diverse set of individuals to foster empathy and new perspectives. Because you’ll engage, study, and work with these people for at least your first year, you’ll likely develop strong connections.
“Something people may not consider about business school is that it's two years to make new friends from incredible places around the world,” Schierholtz says. “Some of my best friends in life now are from my time at business school. Business school is a transformative experience. Any time you go through a transformative experience with others, it creates bonds that will last a long time. I think that's one of those returns on investment that you can't really value.”
Aside from the students and faculty you’ll spend time with during an MBA program, you’ll also enter into an alumni network upon graduating. For instance, Harvard Business School’s alumni network is made up of 87,000 alumni worldwide, spanning 170 countries and a host of roles and industries.
The connections you’ll make in business school can enhance your personal life and lead to professional opportunities to advance your career.
Is an MBA Worth It?
Countless factors can influence the return on investment of an MBA. Ultimately, whether the degree is worth it depends on your career goals and circ*mstances. Weighing your personal finances, location, and family situation is an important part of the decision process, as are your professional goals and which program you decide to pursue.
Patrick Mullane, executive director of HBS Online and HBS Executive Education, provides advice on researching your options.
“Investigate the median salary of graduates by industry and compare that to what you’ll pay earning the degree,” Mullane writes in an article for Forbes. “The overall median may be skewed by higher-paying sectors, so be sure to focus on the industry you’re likely to enter upon graduation. Many people think education at any cost is worth it. It’s not.”
Weigh your personal circ*mstances and professional goals and consider how your school and future role could provide a return on investment.
While this is a personal decision, know that the time has never been better for MBA graduates in the workplace. The market demand for MBAs is high, and most MBA graduates report gaining value from their degrees.
If you aim to accelerate your career and become a well-rounded business leader, an MBA can help.
Are you considering earning an MBA? Explore our three-course Credential of Readiness (CORe) program and download our free guide to preparing for business school.
