What comes to mind when you think of earning an MBA?
Perhaps it’s a higher salary, a coveted leadership position at a Fortune 500 company, or the skills and confidence to found your own startup.
But is an MBA required to achieve any of those things? Not always, at least not anymore. So, in a time when MBA tuition costs are rising, you’re right to wonder, Is an MBA worth it?
The answer: it depends. On what? Good question—and one that we’ll answer in this blog post as we dive into:
The pros and cons of getting an MBA
Insights from the GMAC 2023 Corporate Recruiters Survey
How to evaluate the potential ROI of MBA programs
Alternatives if you decide an MBA is not worth it for your goals
Let’s begin.
Getting an MBA: pros and cons to weigh
Earning an MBA (Master of Business Administration) isn't exactly a walk in the park. The most prestigious MBA programs are demanding, costly, and require a minimum of two years to complete. Will all of that be worth it for you?
Let's consider some key findings from the Graduate Management Admission Council (GMAC) 2023 Corporate Recruiters Survey.
Demand for MBA degrees
MBA graduates tend to have a strong foundation in business knowledge and skills, making them attractive candidates to a wide range of employers.
According to the recruiters surveyed in the GMAC report, MBA graduates are the most in-demand among global employers compared to candidates with business master’s or bachelor’s degrees.
In 2022, 91% of recruiters reported having hiring demands for MBA graduates, making it the highest demand across degree types and experience levels. For context, candidates with relevant industry experience were in demand by 88%, while candidates with only a Bachelor's degree were in demand by 84%.
Note: These figures show the need for some nuance if you’re using demand for MBA degrees to determine whether getting an MBA is worth it for you. On the one hand, the data show recruiters look for MBA holders at a higher rate than for candidates without an MBA. However, the difference in demand for candidates without an MBA isn’t too far behind.
How much does an MBA increase your salary?
Claims on how much an MBA increases your salary can vary, but according to the GMAC survey, the average starting salary for MBA graduates in 2023 is $125,000 annually. However, salaries also depend on other factors, such as prior work experience, job function, industry, and the company's financial health. So MBA programs aren't cheap, but most people go into these programs with the mindset that the tuition costs will pay off down the line, and they are generally correct.
The survey also found that, despite inflation, most companies planned to offer raises to MBA graduates in 2023. Still, how much your salary increases after earning an MBA will depend on the same factors that determine your starting salary.
So, how much more can you expect to make with an MBA? Find out by using this MBA salary calculator from the GMAC. The tool will ask you a few questions about your career before estimating your post-MBA salary.
How much does an MBA cost?
MBA degrees are generally among the most expensive to earn: the average MBA program costs $61,800, according to data from the Education Data Initiative (ranging from $30,000 to $120,000). However, the cost can vary significantly depending on the institution, program duration, location, and reputation.
Top MBA programs, such as The Stern School of Business at New York University, can cost over $100,000. On the other hand, MBA programs at lesser-known business schools can cost below $30,000.
That said, where you get an MBA can affect your earning potential. MBA graduates from more reputable schools will have more leverage when it comes time to negotiate salary. So, sometimes, paying more money for your MBA degree can make it more worth it in the long run. We'll explore this topic more in a moment.
What jobs require an MBA?
An MBA can open doors to various career paths and industries. However, it's worth noting that it's not always a strict requirement for most professions. Some jobs that may require or prefer candidates with an MBA include:
Business Consultant/Management Consultant: Consultants work with organizations to provide expert advice on various business matters, including strategy, operations, finance, and marketing. An MBA can provide the business acumen and problem-solving skills needed for this role.
Investment Banker: Investment bankers help companies raise capital through mergers, acquisitions, and public offerings. MBA graduates often have the financial expertise and analytical skills sought after in this competitive field.
Financial Manager: Financial managers oversee an organization's financial health and make strategic financial decisions. An MBA with a concentration in finance can be advantageous for this role.
Entrepreneur/Startup Founder: Many entrepreneurs pursue an MBA to gain essential business skills and knowledge to launch and manage their ventures successfully.
Business Development Manager: Business development managers focus on identifying new opportunities for growth and partnerships. An MBA can enhance their strategic thinking and negotiation abilities.
MBA skills
Earning an MBA can equip you with a diverse set of skills that can benefit various aspects of your personal and professional life. However, given the level of commitment needed to attain MBA skills, there are pros and cons:
Pros
Business Acumen: An MBA program provides a comprehensive understanding of various business functions, including finance, marketing, operations, and strategy. This broad knowledge base allows graduates to make informed and strategic decisions in their careers.
Leadership and Management Skills: MBA programs often emphasize leadership development and management techniques. Graduates develop the skills to effectively lead teams, manage projects, and handle complex business challenges.
Analytical Thinking: MBA coursework involves analyzing case studies, financial data, and market trends. As a result, MBA students develop strong analytical skills, which are valuable in making data-driven decisions.
Communication Skills: Effective communication is vital in the business world. An MBA program often includes presentations, group projects, and networking events, helping graduates enhance their communication skills.
Cons
Limited Specialization: While MBA programs provide a well-rounded education, they might not offer the depth of specialization found in specialized master's programs. Graduates seeking expertise in niche fields may need additional education or training.
Experience vs. Education: Some employers may prioritize real-world experience over formal education. In certain industries, hands-on experience and a strong track record may hold more weight than academic qualifications.
Dynamic Job Market: The value of MBA skills in the job market can fluctuate depending on economic conditions and industry trends. The demand for MBA graduates may vary over time, and some sectors may place less emphasis on recruiting candidates with an MBA.
Overqualified Concerns: In some cases, having an MBA may lead to concerns about being overqualified for certain positions. Employers might worry that an MBA graduate will leave for a better opportunity once it becomes available.
MBA networking opportunities
Pursuing an MBA offers unique networking advantages that can significantly impact your professional growth and career prospects. Still, leveraging an MBA program for networking opportunities also has pros and cons.
Pros
Extensive Professional Network: MBA programs provide a fertile ground for building a diverse and extensive professional network. Connecting with fellow students, professors, alumni, and industry professionals can lead to valuable relationships that last throughout one's career.
Access to Industry Experts and Alumni: MBA students gain access to industry events, guest speakers, and alumni networks. These interactions offer insights from seasoned professionals, mentorship opportunities, and valuable knowledge about various industries.
Enhanced Career Opportunities: Effective networking during an MBA program can open doors to internships, job placements, and promotions. Building strong connections with influential individuals can give MBA graduates a competitive edge in the job market.
Peer Learning and Collaboration: Networking within an MBA program allows students to learn from their peers' diverse experiences and perspectives. Collaborating with like-minded individuals fosters creativity and exposes students to fresh ideas and problem-solving approaches.
Cons
Time Management Challenges: Engaging in extensive networking activities can be time-consuming, potentially diverting attention from academic commitments and personal life.
Superficial Connections: In the pursuit of building an extensive network quickly, some students may form superficial connections that lack depth and authenticity.
Relevance and Focus: Not all MBA networking opportunities may align directly with a student's career goals or interests. Spending time at less relevant events might yield limited benefits.
Does it matter where you get your MBA?
To some degree, yes, where you get your MBA can matter, since different schools will offer different kinds of networking opportunities, different peer groups, different recruitment opportunities, and different returns on your initial investment. When considering whether it matters where you get your MBA, employers' preferences become a crucial factor.
Top-tier MBA programs, such as those at universities like Harvard, Stanford, and Wharton, often carry a strong reputation in the business world. Graduates from these elite MBA programs may benefit from the school's brand name, extensive alumni network, and access to top-tier recruiters.
Attending a less prestigious MBA program doesn’t necessarily diminish the degree's value. However, it’s possible you’ll be at a disadvantage if you're competing for the same role with someone with an MBA from a top-tier business school.
And one more important factor to consider: According to the 2023 Corporate Recruiters Survey, approximately half of employers hold online and in-person MBA degrees in high regard. However, the majority view talent from in-person MBA programs as possessing stronger leadership, communication, and technical skills.
Is an online MBA worth it?
That depends: an online MBA will generally help a student develop many of the same kinds of skills as an in-person MBA, and will confer the same kinds of knowledge, but, as mentioned above, people who attend in-person MBA programs are sometimes seen by employers as possessing stronger leadership, communication, and technical skills. So the value of an online MBA depends on various factors, including individual career goals, personal circumstances, and employer preferences. Although employers globally tend to hold in-person MBA degrees in higher regard, online MBA programs can still offer significant advantages.
Who Might Find an Online MBA to Be Worth It?
Working Professionals: Those who wish to pursue an MBA without taking a career break or leaving their current job can benefit from the flexibility of online programs. They can study at their own pace and balance work and study commitments more effectively.
People with Geographic Constraints: Online MBA programs are especially valuable for individuals living in remote areas or countries where access to traditional MBA programs may be limited. Online education allows students to enroll in top-tier programs without relocating.
Self-Motivated Learners: Online MBA programs require discipline and self-motivation to stay on track with coursework. Individuals who thrive in a self-directed learning environment may find online programs rewarding.
Cost-Conscious Individuals: Online MBA programs often have lower tuition fees than their on-campus counterparts, and they eliminate the need for relocation or commuting expenses, making them more affordable for some students.
Entrepreneurs and Business Owners: Business owners or entrepreneurs looking to expand their knowledge and skills to grow their ventures can pursue an online MBA without disrupting their business operations.
Who Might Not Find an Online MBA Worth It?
Hands-On Learners: Some individuals prefer the in-person learning experience, with face-to-face interactions and hands-on activities. Online MBA programs might not provide the same level of in-person engagement.
People Hoping to Build Extensive Networks: While online MBA programs offer networking opportunities, the connections may not be as extensive or intimate as those formed in in-person cohorts, which can be a vital consideration for certain career paths.
People Who Prefer Structured Learning Environments: Individuals who thrive in structured and scheduled learning environments might struggle with the flexibility of online programs, where time management and self-discipline are crucial.
Specialization Seekers: Those seeking highly specialized MBA tracks, such as healthcare management or luxury brand management, may find more comprehensive offerings in traditional on-campus programs.
Students with Limited Technology Access: Online MBA programs require reliable internet access and proficiency in using digital tools for communication, assignments, and exams. Individuals with limited technology access or familiarity may face challenges.
Is an Executive MBA worth it?
Whether an Executive MBA is worth it will vary depending upon individual circumstances, but in general, an Executive MBA program is often a valuable investment. An Executive Master of Business Administration (EMBA) is a specialized graduate degree designed for experienced professionals with substantial work experience and leadership potential.
What is an Executive MBA?
Unlike traditional MBA programs, EMBA programs are tailored for mid to senior-level executives who want to enhance their business acumen, leadership skills, and strategic thinking while continuing to work full-time.
Who Might Think an EMBA is Worth It?
Mid to Senior-Level Professionals: EMBA programs are ideal for individuals seeking career advancement to executive-level positions or transitioning to top leadership roles within their organizations.
Working Professionals with Time Constraints: Those who want to continue working while pursuing an advanced degree can benefit from the flexibility of EMBA programs, which allow them to apply their learning directly to their current roles.
Entrepreneurs and Business Owners: EMBA programs can provide valuable insights and strategies for entrepreneurs and business owners looking to scale their ventures and lead their companies more effectively.
Who Might Not Find an EMBA Worth It?
Early Career Professionals: EMBA programs are typically designed for individuals with significant work experience. Those in the early stages of their careers might find traditional MBA programs more suitable to develop a broader skill set.
Specialization Seekers: Individuals with a strong desire to specialize in a specific area of business, such as finance or marketing, may find more effective offerings in specialized master's programs.
People with Financial Constraints: EMBA programs can be expensive, and some candidates may face financial challenges in covering the tuition costs without employer support or financial aid.
Alternatives to an MBA degree
While an MBA can be a valuable degree for advancing your career in the business world, it's not the only path to success. There are several alternatives you can consider to develop your business acumen, gain relevant skills, and achieve your career goals.
Those alternatives include:
Specialized Master's Degrees: Pursuing a specialized master's degree can offer in-depth knowledge and skills in specific areas of business, such as a Master's in Finance, a Master's in Marketing, a Master's in Data Analytics, or a Master's in Supply Chain Management. These programs provide focused expertise and may be more suitable if you’re seeking a specialized career path.
Professional Certifications: Earning industry-specific certifications can enhance your skills and credibility in certain fields. Certifications like Certified Public Accountant (CPA), Chartered Financial Analyst (CFA), Project Management Professional (PMP), or Certified Digital Marketing Professional (CDMP) are highly valued in their respective industries.
On-the-Job Experience: Practical work experience can be a valuable alternative to formal education. Climbing the corporate ladder, taking on challenging projects, and assuming leadership roles can provide hands-on learning and skill development.
Entrepreneurship and Startups: If your career goal is to start your own business, diving into entrepreneurship can offer invaluable experience. Learning by doing, seeking mentorship, and building a strong network within the entrepreneurial community can be rewarding and lead to personal and professional growth.
Online Business Courses and Workshops: Online platforms offer a vast array of business courses and workshops, providing a more flexible and cost-effective way to learn specific skills and stay updated with industry trends.
Company-Sponsored Training and Development Programs: Many companies invest in employee development through training programs, workshops, and leadership courses. Taking advantage of these opportunities can advance your career within your current organization.
Networking and Professional Associations: Actively participating in industry-specific professional associations, attending conferences, and networking events can provide valuable insights and connections, leading to career growth.
Reading and Self-Study: Business books, industry journals, and educational resources can be a cost-effective way to expand your knowledge and stay informed about the latest trends and practices.
ROI on MBA Final Thoughts
Pursuing an MBA requires careful consideration of personal and professional goals—there is no universal answer to the question “Is an MBA worth it?” While an MBA can offer valuable benefits, such as enhanced business acumen, leadership skills, and networking opportunities, weighing the pros and cons based on your circumstances is essential.
It's also important to remember that an MBA is not the only path to success, and alternative options such as specialized master's degrees, certifications, on-the-job experience, and entrepreneurship can be equally rewarding.
If you decide an MBA is worth it and want support on your applications, we recommend speaking with our graduate school admissions consultants. We can help you craft a strong statement of purpose and navigate the MBA application requirements.
If you want to explore options for support, schedule a consultation and begin taking the next step toward getting your MBA!
Ameer is a freelance writer who specializes in writing about college admissions and career development. Prior to freelancing, Ameer worked for three years as a college admissions consultant at a Hong Kong-based education center, helping local high school students prepare and apply for top colleges and universities in the US. He has a B.A. in Latin American Studies from the University of Chicago and an M.A. in Spanish Linguistics from UCLA. When he’s not working, Ameer loves traveling, weight lifting, writing, reading, and learning foreign languages. He currently lives in Bangkok, Thailand.
Top values: Growth / Diversity / Empathy
