Well, is an MBA worth it?
An MBA, or Master of Business Administration, is an advanced degree for aspiring business professionals.
It’s a flexible degree that covers accounting, management, economics, operations, marketing, and elective courses that allow candidates to customize the degree based on their goals and interests.
- Earning an MBA can lead to a wide range of high-paying management careers, and it’s the most popular professional degree worldwide.
- According to a 2017 survey from the Graduate Management Admissions Council, 92 percent of MBA program graduates would choose the degree again.
An MBA can certainly be a worthwhile investment, but is it the right choice for you?
In this guide, we’ll explore everything you need to know to make an informed decision.
A Brief History of the MBA
As the United States industrialized in the 20th century, MBA programs were established to teach the new skills necessary to succeed in business.
These programs blended business and science practices to meet an emerging need for skilled business professionals.
The first school to offer an advanced business degree (a Master of Science in Commerce) was The Tuck School of Business at Dartmouth College.
The first MBA program was established at Harvard University in 1908.
- Initial MBA programs failed to address many important business skills, including communication and leadership skills.
- These programs gradually became more comprehensive, teaching practical business skills and ethics.
- Curriculums also now include technology and information systems, marketing, human resources, statistics, and more.
Today, the MBA has become one of the most valuable assets for business graduates, and more than 100,000 MBAs are earned every year.
Types of MBAs
Over time, the MBA has also evolved to become more flexible.
- The traditional MBA is a full-time, two-year program.
- Students in these programs can explore a concentration or specialization in-depth and typically participate in a corporate internship.
However, many students seeking MBAs are working professionals looking to increase their career opportunities and/or salaries.
These students want to work and complete an advanced business degree at the same time. For this reason, other options include:
- Part-time MBA: In part-time programs, classes are usually held once a week, typically on evenings or weekends to accommodate working professionals. These programs take longer to complete but are convenient for those who need to juggle work and school.
- Online MBA: Even more convenient is the online MBA, which is becoming an increasingly popular option. Most online MBAs can be completed on a part-time basis, and many are also offered in an accelerated format. This allows students to balance work, school, and home life while still completing the degree in two years or less.
- Accelerated MBA: While accelerated MBAs can be completed online, there are also on-campus accelerated options. Courses in accelerated programs generally meet 2-3 times weekly for longer periods of time. These programs can be completed in as little as one year.
- Professional/Executive MBAs: For those who already have work experience, the professional MBA and executive MBA are part-time programs that accommodate students with full-time jobs. The executive MBA is typically for those with ten or more years of experience and is a fast-paced program requiring less foundational courses. The professional MBA is for business owners and executives with less than 10 years of work experience.
- Hybrid MBA: The hybrid MBA is a great option for students who want to combine online and on-campus courses. Most coursework is online, with occasional mandatory visits to campus. There are some programs that divide online and on-campus coursework equally. If you live close to a campus location and enjoy both independent and group study, a hybrid MBA may be right for you.
- Dual MBA: Another option is to pursue a dual MBA. If you want to apply business skills to a field like public policy or criminal justice, you may wish to earn two graduate degrees at the same time. This means your study of business won’t be as in-depth as a traditional MBA, but you can earn two degrees in the same time it takes to earn one, and typically for a discounted price.
How much does an MBA cost?
As with any degree, the cost of an MBA varies.
- On average, tuition for a two-year MBA program exceeds $60,000.
- At top business programs, you can expect to pay $100,000 or more.
In many cases, earning the MBA online is even more expensive than earning the same degree on campus.
Of course, you will save time on travel expenses and may find it easier to continue working while earning an online degree.
In addition, there are some more affordable online programs through colleges like Keiser, Liberty, and Grantham.
- These programs have an average tuition cost of $8,000.
- As a word of caution, however, some of these degrees may be perceived as less reputable by employers.
- Earning an accelerated degree is another way to save both money and time on your MBA.
When choosing your program, consider quality and reputation in addition to cost.
- No matter what MBA program you choose, you’ll be shelling out a substantial amount of cash.
That investment is only worth it if you learn the skills to be an effective business leader—and if the degree is considered valuable by prospective employers.
Additional MBA Costs
To apply for an MBA, you will need to take either the GMAT or the GRE.
- The GRE costs $205, while the GMAT costs $250.
- Most MBA programs also have hefty application fees, typically ranging from $100 to $280 per application.
- As a general rule, the more competitive MBA programs charge the highest application fees.
Including test-taking and submitting applications, applying to three top business schools can cost over $1,000 in fees.
What careers can I pursue with an MBA?
When making such a substantial investment, you’ll want to know what you’re getting in return.
Potential careers for MBA graduates include:
- Marketing Manager
- Operations Manager
- Chief Technology Officer
- Information Systems Manager
- Senior Accountant
- Chief Financial Officer
- Management Consultant
- Investment Banker
- Program Manager
- Financial Analyst
- Investment Fund Manager
- Operations Research Analyst
- Management Analyst
- Health Services Manager
- Sales Analyst/Manager
- Information Technology Director
Because an MBA covers a wide variety of skills, it can lead to a wide range of career opportunities.
How much money will I earn with an MBA?
For the careers listed above, the median salary range is $84,290 (Investment Banker) to $149,978 (Chief Technology Officer).
- Most of these careers offer a median salary above $100,000.
Of course, your starting salary may be less than the median salaries listed here.
- However, a survey from educational provider Training the Street indicates that 46 percent of new MBA graduates have had job offers for $125,000 or more.
- And 28 percent of MBA graduates surveyed received three or more job offers.
In addition, many MBA graduates enter careers that pay signing bonuses, year-end bonuses, and other financial benefits like equity or even tuition reimbursement.
- According to The Financial Times, graduates of top MBA programs often increase their pre-MBA salaries by at least 90 percent.
So, earning an MBA degree is a significant financial commitment, but it’s generally a wise investment in your future.
MBA graduates are in high demand and typically earn high salaries with excellent benefits.
When an MBA Is Worth It
If you have a business career or would like to have a business career, an MBA is a tried and true way to advance your salary and climb the career ladder.
- An MBA is also a worthwhile move if you want to get into a new industry or area of business.
- Most programs offer specializations in industries like healthcare, oil and gas, consulting, and so on.
- Concentrations are also available in business functions including marketing, finance, management, business analytics, etc.
By pursuing a concentration related to your career goals, you’ll earn an impressive degree and the foundational knowledge you need to transition to a new industry.
- Some MBA programs even offer concentrations or courses in innovation and entrepreneurship.
Even if a program you’re interested in doesn’t have these options, an MBA can help you develop the skills and knowledge you need to start your own business and make it a success.
- In some programs, you can also enter startup competitions and take electives that help you develop your business plan and receive input from peers and experienced faculty members.
So, an MBA is usually worth it if you:
- Want to advance an existing business career
- Plan to enter a business or business-related field and want a high salary
- Want to switch industries or enter a new area of business
- Hope to start your own successful business
If you’re looking for a high-paying leadership position in management, business, or finance, an MBA degree can help you get there.
When an MBA Is Not Worth It
For the most part, an MBA is not worth it if you don’t have plans to work in a business-related field.
- If you’re working/want to work in another industry, an MBA can be helpful if you have management ambitions, but it may not be a necessity.
It’s also important to note that some MBA programs are better and more reputable than others.
- With more and more schools offering MBA programs, employers are considering where your MBA degree came from.
An MBA from an unknown school or from an online-only program may be less valuable than expected.
And if that’s the case, investing time and money in an MBA program may not be worthwhile.
- To receive the greatest return on your investment, it’s wise to aim for a top-tier business school (or as close to the top-tier as possible).
In addition, an MBA doesn’t guarantee you a job offer. It can certainly get you interviews, but it’s up to you to secure the job.
Alternatives to Earning an MBA
If you decide that an MBA isn’t right for you, or if you’re not ready to make the investment, there are other options to consider.
Do you already know what area of business you’d like to focus on?
- If so, you can pursue a more affordable graduate degree that takes less time to complete in fields like accounting, economics, and finance.
For instance, a Master of Finance degree takes just one year.
- Self-study programs like the Chartered Financial Analyst (CFA) and the Financial Risk Manager (FRM) are considered equivalent to a graduate education by some employers.
- CFA and FRM holders are often sought after during the hiring process.
- Obtaining certifications like the Project Management Professional or the Certified Information Systems Analyst can show that you are competent in your field of interest and worthy of a promotion or higher salary.
Pursuing certifications instead of an MBA saves you time and money, and you can easily remain employed while doing so.
If you’re weighing your options, consider questions like:
- What are employers in your dream career/career field seeking?
- What skill sets will you need to succeed in this field/career?
- Is earning an MBA the only way to acquire these skills? What other training, certifications/programs, or work experience can help you build these skills?
Research the answer to these questions based on the career you’d like to have.
If possible, talk to others in that career field, especially those in management positions, and ask if an MBA is necessary.
If not, what other options are worth pursuing?
Advice from Business Experts
We asked top-performing business experts what they thought about the worth of an MBA.
Here’s what they had to say. Enjoy!
Timothy Schauer, associate professor of business at Sweet Briar College:
I have seen instance after instance, from the perspective of an educator, an employer and a recipient, the value of an MBA in advancing business careers. Personally, the cost of my MBA education was recouped in just one year with a job change obtained because of the knowledge gained through an MBA degree.
Although some higher education administrators may disagree, I encourage undergraduate students to work within the business field in some capacity, at least a year or two after graduation.
Doing so provides much greater context when they begin their master’s level education. It is like adding gasoline to a fire. Also, many companies provide tuition reimbursement, thereby lowering the student’s out-of-pocket expense.
Matthew Burr, HR consultant with Burr Consulting:
I went back to school in January 2016 for an MBA from Syracuse University, at the same time I founded my HR consulting firm, October 2015, I loaned out to ensure I had money in the bank to fund my business and live while in school.
After completing the degree in December 2017, I have seen tremendous growth in my consulting firm and am now a full-time professor at Elmira College. There is no chance I would have both without the MBA, this was my second master’s degree. I recognized the opportunity to grow my business and teach full-time with the MBA.
Is it worth it? It depends on what you plan on doing with the degree. My answer is yes, if you get into the right program. I am now in the process of paying down the debt, I paid $51,000 last year alone.
Dr. Kiely Flanigan of Flanigan Coaching & Consulting:
While the cost of earning an MBA can be prohibitive at some schools, it is worth pursuing when your goal is to land a job in a corporation.
As a former Senior Director of Talent Development, I saw an MBA used as a calling card–an assurance that the candidate has the business acumen, analytical skills, cross-functional collaboration, and professional presence to help her/him get up and running faster and proficiently in the role.
Add in school accreditation, program ranking, and personal achievements, and the MBA becomes a certification for success in the corporate world.
Tim Toterhi, a TEDx speaker and the founder of Plotline Leadership:
An MBA teaches you the language of business. A lot of people think they can fake this, but you come off sounding like a tourist trying to speak French from a guidebook. Sure, you can learn most of the material via a Google search, but the real value comes from context and contacts – the two things obtained from actually being there.
That said, unless you go to a top-tier school, the degree isn’t worth the cost, especially in the short-term. First, the chances of getting a promotion or salary increase simply because you graduated are near zero. And second, you saddle yourself with the type of debt any good business person would avoid.
You can get locked out of opportunities if you don’t have a four-year degree, but that’s not the same for an MBA. Hiring managers and HR pros like myself are much more interested in what you can do vs. what’s hanging on your wall.
I’m happy I have mine. It was a great experience, but would I do it again at today’s costs? Probably not.
Laura Troyani, founder and principal of PlanBeyond:
While I have over fifteen years of on-the-job experience as a marketer, my MBA means I can offer more than just marketing expertise to my small business clients. With a grounding in other business areas like finance, technology, and operations, I can anticipate how marketing activities can impact these other business areas and help my clients make more educated decisions.
For instance, one recent client was making decisions about what software features to include in an upcoming release and which ones to put on the back burner. I was able to inform that conversation and point them towards features that would help with monetizing their solution faster and building adoption quicker.
This type of holistic business view is especially important to small business presidents and CEO’s. They don’t have the resources to bring every skill set they want or need in-house. As a result, having someone with a core area of expertise that can also advise in other areas is extremely valuable.
Paul Bromen, a serial entrepreneur and CEO of UponaMattress.com:
The MBA is worth it in a few select scenarios. It is best for career switchers. I had several classmates who went from being teachers or Peace Corps members that are now fast-tracked junior executives.
They doubled their income in two years and are on promising trajectories. The other people I have seen benefit from an MBA are professionals in careers or companies where the degree is required to get promoted into management.
People who don’t benefit are those wanting to be entrepreneurs. These people should instead use their tuition and time to start a venture. They will learn more and be better prepared for future success.
Bottom line: The MBA can be a great way for ambitious people to accelerate their careers.
Final Thoughts: Is an MBA Worth It?
In most cases, it’s safe to say that an MBA is a worthwhile investment.
- Whether you’re already a business professional or simply hoping to be one, earning an MBA can be your ticket to a higher-ranking position and a better salary.
Most MBA graduates are happy with their decision to complete the program, and many receive a starting salary of $100,000 or higher.
- Those already working in a related field typically increase their salaries by 90 percent or more after earning an MBA.
The exception to this rule is if you won’t be working in a business or management-related field. In that case, an MBA is unlikely to be useful. It’s also a good idea to explore acceptable alternatives to an MBA in your desired field.
- You may be able to find an out-of-the-box option that will save you time and money while leading to similarly positive outcomes.
And sometimes, earning an MBA from an unknown or online-only program is not worth the investment because the degree won’t be valuable to top employers.
To truly make the most of your MBA investment, it’s best to attend a reputable business program that you’re confident will effectively prepare you for a high-powered career in business.