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What Is the ROI for an MBA Degree?

Employers have consistently valued graduates of Master of Business Administration degree programs for their understanding of accounting, finance, business law, marketing and management strategy. The same is true for their training in leadership and soft skill development. Their continued access to rewarding positions and high salaries demonstrates the degree’s value.

It is easy to appreciate that value in terms of several advantages over non-business school graduates:

  • Skill sets required for leadership
  • High career earnings
  • Sharp career trajectory
  • Career versatility across industries
  • A solid foundation for a professional network
  • An entrepreneurial mindset

This article examines the ways an MBA degree provides a high return on investment for working professionals.

Skill Sets Required for Leadership

Rarely do working professionals enjoy the opportunity to develop a wide range of skills in the confines of a particular field and position. Professionals who enroll in an MBA program have the opportunity to gain experience and learn new skills that apply across industries, including strategic management, project management, critical thinking, problem-solving and analytics. These elements complement the sound business principles students learn in core courses, and specialized knowledge they gain in electives.

While in business school, students work in collaborative teams, a prominent feature in today’s organizations. They gain exposure to students and professors from diverse backgrounds and learn the nuances of cooperation and the techniques for exerting influence in a multicultural, globalized world.

Case study projects and competitions, common to MBA programs, offer practice in addressing contemporary business challenges without the pressure of making a mistake and losing one’s job. Students have the freedom and flexibility to stretch their capabilities and integrate soft and hard skill sets with their innate talents. Employers are well-aware of how this training prepares MBA graduates for leadership and show preference by fast-tracking graduates in training programs and into positions of authority.

High Career Earnings

According to the National Association of Colleges and Employers, the average starting salary for MBA grads (class of 2020) was $20,000 a year above that for professionals with only an undergraduate business degree.

Earnings survey results vary but are nearly always impressive for MBAs. The Wall Street Journal projected a yearly earnings of $115,000 for 2021 MBA graduates. Those specializing in consulting, finance and tech saw the most significant salary increases.

When you figure in the improvement in discretionary income to be gained from earning an MBA, as well as the compound interest generated over time from greater annual savings, the financial benefits really begin to accrue. These benefits result in more affluent lifestyles and the realization of more financially secure retirements earlier.

Sharp Advancement Trajectory and Career Versatility

Businesses are risk averse; they want to invest in people with the ability to solve complex problems in order to reap returns. This impetus explains why so many national and multinational corporations require an MBA for management and executive roles and why they often offer tuition reimbursement for professionals who earn the degree. They know they can count on a return on their investments.

Companies often recruit MBA graduates from outside their industry for leadership development, preferring them over employees with industry experience. This preparation provides MBA graduates with career versatility and the opportunity to pivot. Often, the graduate’s business network, kick-started while in school through networking events and student-led conferences, leads to introductions. MBA graduates have the luxury of evolving into different interests and pursuing new opportunities. Many even choose an entrepreneurial path, and some do so following graduation.

Once in the management track, professionals gain greater exposure within their organizations, through interdepartmental meetings and collaborative projects, and this leads to more advancement opportunities. Conversely, those without graduate degrees are often overlooked and bottlenecked when the careers of MBAs begin to take off.

According to GMAC‘s 2021 report, 54% of corporate recruiters said that business school graduates tend to have a fast track to upper-level positions in the technology sector. The consulting and finance/accounting industries also expect robust demand for MBAs.

Top organizations know how to source the right talent for leadership, and they have always valued MBA graduates for their strategic thinking, business acumen and soft skills. If you would like to accelerate your leadership trajectory without stepping away from your current position, an accelerated MBA like UNC Pembroke’s online program is an affordable option to earn the degree in as few as 12 months while still working.

Learn more about the University of North Carolina at Pembroke’s online Master of Business Administration program.

Have a question or concern about this article? Please contact us.

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