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Is an MBA Worth It?
Have you been working at your job in the business world for a long time, but recognition for the work you do is slow to come? Do you feel stuck in not only your job but also at the salary you make? Maybe you desire to be a manager, a CEO of some large national corporation, or even to start your own company?
These are all great questions to ask yourself if you are thinking about getting an MBA. But unfortunately, an MBA doesn’t always guarantee either career enrichment or even a larger salary, so it’s good to know if the degree is worth the time, cost, and financial sacrifice you’ll have to make. More importantly, it’s essential to know beforehand if an MBA is the right decision for you.
Are You Sure You Want an MBA?
If your main motivation for obtaining an MBA is financial, should you really make the commitment and pursue the degree? Well, yes, a good financial return is possible for people with an MBA, but, then again, the answer could be no because the debt a student accrues doesn’t balance out the investment.
2018 graduates from full-time MBA graduates started a new job with an average salary of $87,683.88. However, the average debt a full-time student accrues is $51,671.60. So, in essence, a student’s true salary that he gets to keep after taxes and paying off this debt may be only around $30,000.
The best way to look at the MBA investment is over time. Ten years after getting the degree, the average financial return is $390,751. For a top tier business school like Stanford, that figure becomes 1 million. Plus, those who have the degree claim that the skills learned and the contacts made while in business school are highly useful and important.
Ten Misconceptions About an MBA Degree
Despite the time and expense an MBA degree entails, still many business professionals believe that the credential will improve their current lot in the work world and lead them to a better place. The reality, however, is something else. Here are ten misconceptions about the MBA degree.
- You won’t make more money. While many MBA graduates expect to earn around $140,000 a year, the reality is more like $76,000 and that’s with 5-9 years of professional experience. People without any professional experience can count on making a lot less.
- The school you choose to attend makes a huge difference. Salaries for graduates from top business schools like Harvard may reach $115,000 but more like $60,000 for graduates from lower-ranked schools.
- Professional experience is more important than an MBA without it.
- MBA programs require a two year or more commitment, although some programs can be completed in a year. But that still equates to a long period without any income if you are attending school full-time.
- If you get an MBA, make sure it is relevant to the industry in which you work.
- Like other degrees and certifications, MBAs lose their relevance over time. Make sure to stay updated on the changes in your industry after you get the degree.
- All the things you need to learn for an MBA are available online at much less cost. True, you might not have the credential of “MBA” next to your name or access to a network with great contacts, but these are small sacrifices when the cost and time needed to get an MBA are taken into consideration.
- Depending on the industry you work in, an MBA can make you look overqualified for many jobs.
- There are way too many MBAs already. ¼ of the master’s degrees given out are MBAs. Additionally, the amount of jobs available to MBAs is low. Plus, recruiters tend to focus on MBA graduates from top tier business schools.
What Does Getting an MBA Involve?
Executives at various companies or professors in prestigious MBA programs still believe the MBA tract prepares students for unparalleled success in business. It can offer them, at best, the skills to start a business or to become a leader of an organization. In fact, the degree is held in such high regard that many hiring managers view it as a mandatory requirement for jobs in management or other high-profile positions.
To get an MBA, though, is a big commitment financially (and even psychologically) for two years and requires potential students to take the GMAT. If a student desires to attend an MBA program at a top business school, his score on the GMAT is considered more but it isn’t the most important factor. Some schools now accept GRE scores and don’t weigh admission solely on a high score but instead are more focused on a candidate’s professional work experience, essay, prior college grades, etc.
That all said, Here’s what’s involved if you pursue an MBA. Students can choose either to attend business school full-time or part-time. However, MBA programs are considered so rigorous that students who choose the full-time route but also wish to work a professional job is almost impossible and not recommended.
Similarities Between Full-Time and Part-Time MBA Programs
If you are still driven to pursue an MBA with the potential sacrifices you’ll have to make because you believe, in the end, you will be better off with the degree than without it, there is the option to work on the degree part-time versus as a full-time student.
Most business professionals who choose to attend school full-time are seeking to completely change their careers. If that isn’t your goal, then working on your MBA degree part-time is the smart choice to make, plus there are only a few differences and more similarities between both approaches.
Full-time students immerse themselves in a long, intensive educational experience. Chances are they have no other pressing obligations, they’re probably single and don’t have any children, and they can relocate any place needed to attend a good school. A lot of full-time MBA students are those who have recently acquired a bachelor’s degree and are not yet working in the business world. While in the second year or so of study, full-time students can participate in on campus recruitment.
Full-time students usually pay full graduate tuition, must carry a minimum number of credit hours each term, and maintain good grades. Tuition assistance may be available to them for scholarships and as teaching assistants. Full-time students normally work summer internships. But just getting in to an MBA program as a full-time student is very competitive, plus admission is weighed more heavily on GMAT scores, especially if it is for entrance to a highly-ranked school.
Many MBA students, though, are already business professionals or have been in the workforce for a long time and choose to attend part-time for various reasons. In this case, students either pursue the Executive MBA where their employer assists them with tuition in exchange for a commitment to stay in their current jobs for a certain period after receiving the degree. Another part-time approach to the MBA for students is for those who work full-time but attend school after work in the evening and on weekends.
Coursework for MBA students is the same whether they are attending school full-time or part-time. The courses are just as expensive and academically challenging with a focus in accounting, statistics, economics, communication, and other intensive areas. Part-time students have the small luxury of breaking-off pieces of the requirements in chunks versus pushing through for the full two years (sometimes three) without a break.
Job Outlook for MBA Graduates: Consulting and Management
After all the hard work of attending business school is over and the MBA is in hand, many business professionals work for banks or in high finance. Some of them are happy to return to their jobs in the hope they’ll receive pay increases or better positions. And if not, they may seek these elements out by getting new jobs.
Other graduates, however, lean toward two key areas because they are the most lucrative: consulting and management positions. Statistics support this with MBA grads earning as much as $101,108 as consultants and $92,802 in management positions. But these numbers are not consistent and could be lower.
The skills that consultants and managers use are not far removed from the things they learn while working on their MBAs. Primarily, they use analysis to find the strengths and weaknesses within a business, then propose a well-thought out solution. Specifically, consultants supply advice to a company or corporation that can’t seem to find it amongst their internal employees. Management, on the other hand, are people who help to define, create, then carryout a company’s business plan.
Both consultants and managers get to experience a lot of variety in their work. For instance, those in management positions may take part in something called Leadership Rotation. This development exercise gives an MBA grad exposure for short periods of time to different departments in a company. Consultants do something similar where they learn the business practices and disciplines of departments like Human Resources or Finance.
Whether obtaining an MBA is worth the time and expense is hard to say. There are no guarantees it will secure you a better job or salary, although that will probably happen as you build your professional work experience. The industry you work in, the school you choose to get the degree, and a host of other factors can influence if the MBA is the right choice for someone.
So, have you decided to pursue an MBA? Do you know the reasons why you want it or need it? Lots of schools offer this advanced degree, even some schools overseas that have more relaxed admission requirements, such as GMAT scores. Whether you still have questions or you’re ready to take the plunge towards this advanced degree, you can always start by checking out the MBA program at CityU to learn more about prerequisites and admissions and see if it or another school is right for you.
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