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MBA Degree Pays Off With Higher Salaries & Promotions, Say Graduates

AMBA research shows 94% of MBAs expect senior management roles after graduation with salaries on the up

By  Cara Skikne

Tue Dec 11 2018

Recent MBA graduates are optimistic about how their MBAs will increase their salaries, help them progress in their careers, and increase their problem-solving skills in the near future. That’s according to new research from the Association of MBAs (AMBA).

AMBA’s latest research provides fresh insights into how graduates see the next few years of their careers unfolding after doing an MBA. They spoke to 1,591 MBA graduates within their first two years of graduation and found that the overwhelming majority found their MBAs to be worthwhile.

According to AMBA, ‘The findings suggest that graduates believe MBAs will have a transformative impact on their salaries. The study also indicates that even those who do not think they will be earning substantially more still feel that they will reap the benefits of an MBA and, crucially, that this will outweigh the financial cost of completing one.'

The findings demonstrate that MBAs largely see an upwardly mobile career trajectory. 94% see themselves operating at a senior management level in the next few years. More than a fifth of graduates see themselves running their own organization.

‘More than three quarters of MBAs surveyed say that they predict that they will earn 20% more in the next three years and almost half expect to earn at least 50% more within the same timeframe,’ says AMBA.

While this survey is based on MBA graduates' expectations, Will Dawes, research and insight manager at AMBA, stresses that these expectations are not uninformed. “These are intelligent people already looking for jobs and who know the marketplace well. We have asked them how they anticipate the immediate future to keep estimates realistic.”

AMBA data is backed up by other sources: the recent success of US business schools, like Georgetown McDonough, achieving record employment rates despite various admissions challenges, and Financial Times data from 2018, which shows almost two-thirds of MBA alumni at ranked schools more than doubled their salaries. 

The transformative power of the MBA degree is on show at Rotterdam School of Management in the Netherlands where 71% of the school’s most recent job-searching students changed location after graduation. 66% changed industry; 44% changed role. In their first year after graduation, alumni can expect an average annual salary of over $80,000.

At Hong Kong’s CUHK Business School, 88% of MBA students got jobs offers in Asia after graduation—an increasing number of them international representing 14 different countries. 31% of the class are women.

Interestingly, according to AMBA, there is no difference between the percentage change that men and women foresee in their post-MBA salaries. While further research needs to be done to establish if the percentage increase in men's and women's salaries is indeed the same, it does indicate that the benefits of an MBA are proportional in men and women, despite the gender pay gap.

“We are not trying to blindly suggest men and women are paid the same for the same jobs,’ says Will, “but it’s encouraging that the real impact of an MBA as a percentage change of salary is positive in terms of how business schools are upskilling men and women.”

The study also highlights how many recent graduates are motivated to complete an MBA in order to change sectors. Almost half (48%) of all graduates believe they are likely to change sector in the next year.

The most popular desired transition is into consultancy (19%), although a wide range of sectors were mentioned including banking and financial services (8%), IT (6%), energy (5%), healthcare (5%), consumer goods (5%), the not-for-profit sector (4%), marketing (4%), food and drink (3%), education (3%) and government-related work (3%).

Will sees a link between the confidence to change sectors and tangible skills from the MBA, as well as learning and empowerment that the experience provides. The research shows that seven out of 10 MBAs are more confident about themselves, seven out of 10 MBAs surveyed think they can innovate to their organization work better, and seven out of 10 also believe they can and make organizations more efficient.