Twitter


MBA: Return on Investment

With globalization, there is an international move towards university and post-graduate education. This development is profound in the global MBA market. With this move, there are some generally shared trends that are and will be impacting the MBA student and market. This article is the first in a series about these MBA trends both on a global and a local market level. Interest in doing an MBA continues to grow exponentially across all age groups and profiles. This really is an interesting phenomenon considering the negative coverage "MBA" educated people receive in the general media due to the financial crisis, high unemployment rates in the West, and a host of scandals.

At the level of stewardship, Rakesh Khurana at Harvard Business School and Frank Brown from INSEAD continually call for further professionalisation of business education and the way the organisations are run and the programme content they deliver. Many MBAs have even signed oaths saying that they will abide by an ethical code of behaviour. Just the fact that this has taken place at all shows you the level that things have degenerated.

Is it really worth doing an MBA?

If salary is your only goal, maybe it is not. If on the other hand you desire to shift business practices or which is the case, the recruitment and performance bar are raised to get the work you desire, an MBA is part of the career trajectory. Many WCW alumni reported last year that their salaries more than doubled during the last 5 years after doing an MBA at one of the top Global MBA programmes. This is quite impressive considering that this target profile group is between the ages of 27-33 years of age.




According to recent figures, for example the QS TopMBA.com Applicant Survey, an increasing number of MBA applicants in the 21st century are keen to choose a ‘good' job, a career path that would allow them to use their skills to help make the planet a better place. But the same people, as MBA graduates, may look at their debts and wonder how they can balance their desire to get into the field of sustainability but also make some money?

Based on the latest survey by QS World MBA Applicant Survey, "80% of the world's MBA candidates would consider the USA as the No.1 destination for MBA programs."

Increase your salary as a result of an MBA

The Association of MBAs* 2008 career survey shows an unequivocal increase in salary over time as a result of acquiring an MBA qualification. While MBA salaries often do increase immediately on graduation, the real benefit in terms of salary can be found during the next stages of a graduate's career. MBA graduates experience salary increases of 46 per cent immediately after the MBA, 129 per cent in the three to five years after the MBA, and 208 per cent in the six to ten years after the MBA. In addition, 27 per cent of MBAs are employed at board level in organizations within ten years of graduation.

Overall increase in salary as a result of an MBA

Even with the omission of the lowest and highest-growth countries represented – New Zealand and China – the adjusted increase in salary remains significant.

Source: The association of MBAs is the international impartial authority on postgraduate business education. Its accreditation service is the global standard for all MBA, DBA and MBM programs. The 2008 Career Survey is the seventh such publication produced for the MBA community.

MBA Salary - a Free Calculator to measure how worthwhile your investment in MBA studies Is

The MBA360 website has lately come out with a new service for MBA students to make it possible for them to envision the salary they will probably earn on conclusion of

The Investment

The modern student will test the MBA program according to all the relevant criteria, including location, length of studies, cost of tuition and upkeep, loss of salary, among others.

The Return

On the other hand, the salary that the graduate will eventually earn should cover all the expenses of study in a relatively short time. The long-standing question is whether or not the investment is worthwhile. The main unknown factor is how long it will take to make a return on the investment. That is to say, the cost of tuition and costs divided between salary earned before earning the MBA degree and the upgraded salary of the graduate.

Following is a sample of a student planning to study in the USA:

  • Average tuition in a Class 1 business school - $100,000 for a period of 24 months
  • A comparison based a period of 24 months which is the length of study towards an MBA:
  • Before receiving the MBA: annual salary of $60,000 (while saving save half his salary)
  • While studying for the MBA, the student will work a part-time job (50%) and will earn $40,000 ($80,000 in 24 month)
  • This same student can receive aid of $10,000
  • This is to say that the cost of the degree in total is: $120,000 +$60,000 = $180,000. - $10,000 = $170,000
  • The student will work in northeast USA and will be employed in the field of risk capital advice.

The result according to the calculator:

During the third year the student will return his investment. On the assumption that his cost of living will rise by 7% each year he will save the sum of $201,424 after 3 years. In other words ROI will occur after 3 years. This refers to an investment with an annual return of 33%- a very nice return in any case.

(Not taken into account is financial aid including long-term loans, etc. that add interest)

The MBA360 gives the potential MBA student an opportunity to estimate his potential earning power and his rate of ROI – it's just a click away. Just click and get your result.