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Average MBA Degree Salary
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MBAs and Other Business Programs for Working Professionals
The following article discusses the MBA salary in detail.
Table of Contents
- Salary Before and After Your MBA
- Factors Affecting Salary
- Grad School Focus
- How to Research Salaries
- Popular MBA Career Paths
- The Value of Your MBA
- How to Talk Salary in Your Job Search + Video
- Remember, Salary Isn’t Everything
- Bottom Line
So you want to get your MBA. Perhaps you want to do more interesting work, or climb the ladder at your company faster. Maybe your organization has a tuition reimbursement program, and you figure it would be a shame to waste the opportunity. Or perhaps the job you want to do requires a master’s level degree, and an MBA seems like the right one for you.
Whatever the case, if you’re researching MBA salaries, you most likely see this degree as the next step in your career. Likely you are wondering whether the salary will really prove worthwhile, and how to ensure you come away with the compensation package you want after grad school.
Smart thinking, because getting a new degree won’t necessarily help you land a new career if you aren’t strategic. That’s why it’s important to consider the reasons for getting an MBA – or a Master’s in Business Administration – before doing so. And let’s not lie: salary is usually a biggie.
Below we’ll discuss what kind of impact an MBA can have on the salary range you can command, as well as some ways to influence that salary.
Let’s get started.
Raising their potential salary is a definite reason many people to go grad school for their MBA. According to Forbes, “Post-MBA Starting Pay was up 50 percent over Pre-MBA Pay for full-time students. This is consistent with the 50-60 percent increase reported in my 1994 book, The MBA Advantage (page 37), and with the 51 percent increase published in my 1997 book, The Success Principle (page 242). This suggests that the 50 percent step-up in pay at graduation has been stable over time and across different schools surveyed.”
In other words, you can pretty much depend on a 50 percent pay jump as soon as you graduate with your MBA. So let’s say you were making $60,000 before heading to school. Chances are good that on exiting with degree in hand, you’ll get a salary in the $90,000-range.
But the news is even better than that. By the end of five years after earning your MBA, you can expect to make a full 80 percent more than you made before earning your MBA. So not only does going to school give you an immediate pay jump, but you will continue to widen the distance, salary-wise, between yourself and those who do not have an MBA.
Of course, these numbers are averages, and do not take into account the many differences between various roles you may work in after earning your MBA. Below, we’ll talk about some of the more specific factors that might affect your salary.
Just like in any other field or with any other degree, a multitude of specific factors will impact your exact salary in the long run. Let’s take a look at a few of the most common below.
For-Profit Versus Non-Profit
The sad truth is that non-profit or not-for-profit business models tend to have a harder time coming up with funds, because they rely on funding from external bodies rather than generating it themselves with a for-profit business model. However, that doesn’t always mean they can’t pay competitive rates, because sometimes they can. Indeed, some non-profits are incredibly well funded, and may be able to pay you as well as some corporate entities.
However, this is not always the case, and you should be careful to assess salary thoroughly when offered or considering a non-profit position. If you simply cannot afford to work a job you would like and still pay off your school loans/eat/etc., then this isn’t the time to take on that sort of job. You can always move to this sector later on, when you’re more financially stable.
Social entrepreneurship cuts across traditional sectors of business and non-profit organizations by seeking to address all aspects of society and not merely emphasizing one area such as education, health, welfare reform, human rights, worker’s rights, environment, economic development, agriculture, etc.
By seeking to champion change within communities and society as a whole and not specializing in singular causes as non-profits often do, social enterprise is allowed to utilize the market forces and leverage profitability into both charitable causes and business growth.
Social entrepreneurship offers more than just monetary returns or simply providing a big salary. It allows the entrepreneur to create something beyond them and provide stability for communities into the future, especially when applied on the local level.
Sector also impacts your salary level. Again, if your goal is to work in the charitable giving sector, for instance, you should expect to earn quite a bit less. However, many fields do offer quite a bit in the way of compensation. Consider IT, consumer products, the finance sector and other fields that operate on a highly capitalistic model. If this interests you, you can probably look forward to a high salary.
Where you live has significant bearing on how much you can make. Salaries vary greatly from country to country. It is significantly easier to get a high salary in Europe or North America, for instance, than it is in Africa or South America. It may surprise some people to discover, however, that salaries also vary significantly between states and regions in the United States.
For instance, according to the Graduate Admissions Management Council, the Northeast, Midwest and West Coast are far likelier to yield good salaries to MBAs than the Middle Atlantic, South or Southwest. The differences aren’t huge – a range of $15,000 or so – but if you want to earn the highest salary you can, searching for jobs in the former regions is a good idea.
Also keep in mind that it is much easier to attract a large salary in the big city than it is in rural areas.
Your job function most certainly impacts your salary. If you end up in an administrative role, your salary likely won’t be nearly as high as if you intentionally put yourself on a management or executive track. Keep in mind that the job you accept right out of grad school will absolutely influence those you’ll be in line for later on, so think carefully before deciding that something is good enough “for now.”
Other Influencing Factors
Obviously, your previous level of experience makes a big difference to the earnings you will receive. If you had a relatively high salary before entering grad school, that will come into play during salary negotiations after you have your degree in hand. The MBA will help you jump a level or two upon graduation, but probably not much more than that, so don’t expect it to immediately vault you to executive status. You will still have to work your way up, it may just happen faster.
Your focus is also a huge factor in how much you will make throughout your career, beyond the other job factors we’ve just discussed above. Almost all grad school programs offer focuses so students can build specialty in their interest areas. Upon graduation, these focus areas prepare you for different jobs, which will affect salary.
For instance, if your focus is in finance, you may be prepared to work a management analyst job. According to the Bureau of Labor Statistics (BLS), this sets you up to earn a salary of around $80,000 (based on the median pay these workers earn in their careers). However, if you focus on computer science, technology management, information security, and information technology, or IT, you may earn a much higher salary: closer to $128,000. If your focus is in marketing, you may become a marketing manager and earn a salary of around $123,000 by the middle of your career.
You get the idea. Your focus absolutely impacts how much you may earn throughout your career, so check before deciding on it that you will be happy with the salary you are able to command.
Below we’ll talk about some different ways to research salary, but just know that you can learn a lot of information by searching different job positions on the Bureau of Labor Statistics website. They possess a wealth of information breaking salary down by a multitude of factors:
- Job type
- Time in the job
- Job growth
- Job availability
… and much more. If you know you want an MBA but you’re not sure exactly what path to pursue, it may behoove you to spend some time on this site researching what you can earn in different roles. If your goal in getting an MBA is heavily motivated by how much you can make, this is an especially good idea.
Of course, we cannot possibly cover every eventuality or combination of factors in your grad school focus and job search, which is why you need the tools to do the research yourself.
Keep in mind that this isn’t a hard and fast discipline. To find out more about salary amounts, you may have to check in several areas. Resist the urge to rely simply on what you see on job boards and Craigslist, though, as these are often not the best source of real information on the subject. Instead, do a little sleuthing using the following resources.
Use Salary Calculators
Sites like Salary.com should not be treated as gospel, but they can actually be very helpful when it comes to figuring out how much you might make for a certain position. They are even helpful to entrepreneurs, allowing you to compare prices for different products.
PayScale is a site that helps you determine whether a salary you were offered is actually worth it. By assessing your job title, location, the number of years you have been working and other factors, it helps you determine whether or not the offer you’ve received (or the amount you’re currently making) aligns with what you are actually worth. This is an excellent way to learn more before saying yes to a job.
Remember that even with an MBA, not all organizations will actually pay you a salary. Some might still pay you a wage, which means that instead of drawing the same amount every month, you get paid varying amounts depending on the actual hours you work. In some cases (as when you’ll be pulling lots of overtime), this isn’t a bad thing, so don’t dismiss wage positions out of hand. If you want to figure out how much a wage is when translated as a salary, use this calculator.
Talk to Recruiters
Another way to learn more about the type of salary you might command is to talk to job recruiters. Although recruiters have a somewhat mysterious aura, all they do is help companies find excellent talent. For you, they’re totally free to work with, since it is the companies that pay recruiters.
If you’re looking for a job after graduation (or testing the waters while still in school), feel free to call up a recruiter and ask about your potential salary, the types of jobs they think you might be able to find, and even whether or not they’ll be able to place you.
Other Anecdotal Research
Lastly, anecdotal research may be your best friend when it comes to salary. If you’re earning your MBA currently, your classmates and professors may be able to offer you a wealth of information. For instance, classmates can fill you in on how much they made at previous jobs. Professors, many of whom may also work in the private sector, can often give you an idea of how much you might be able to make by choosing a certain focus or by working with certain companies.
It may feel difficult to ask people about salary because money can be an uncomfortable topic, but resist the urge to steer clear. There is no information more valuable than that of individual people who know what they’re talking about, and the Internet simply does not compare. Keep this in mind if you want the most accurate help determining what your MBA salary might be.
- Bank Financial Analyst — A bank financial analyst is responsible for the examination of the financial information of a business and to use this to make investment recommendations. They do this by using spreadsheets and statistical software.
- Big Data Analyst — Big data analysts collect, gather, analyze and translate ‘big data’ for an organization. They use this data to predict future events and to calculate whether past actions have been beneficial for the company they work for or not. As more and more big data is available, their role is becoming increasingly important.
- Budget Analyst — Budget analysts organize and apportion the funds of the company that they work for. They allocate the financial resources to the different departments at the start of the financial year and monitor whether these budgets are being adhered to and are properly managed.
- Business Intelligence Analyst — Business intelligence analysts are becoming a vital part of organizations. They look at all the aspects involved in a company, which includes daily processes, efficiency, staff and procedures, and then put strategies in place to strengthen these. To do so, they perform a lot of research, as well as gathering data, and they translate this into easy to understand reports for management.
- Business Systems Analyst — The role of a business systems analyst is to improve the processes of the organizations they work for by effectively working both as a project manager and an information technology manager. They review systems, as well as internal and external data and then make suggestions to improve this, generally also managing the suggested changes.
- CMO — Chief Marketing Officers are responsible for the development, implementation, management and review of a company’s marketing strategy and their marketing development. They are classed as one of the top level executives, which means they work together with other chief officers throughout the organization.
- Director of Marketing — Directors of marketing are responsible for the direction, planning and overseeing of all marketing strategies within the organization they work for. They also keep up to date with changes on the market and adjust their strategies to keep up with these. They manage business planning, staff operations and budget development and they are a true expert in the field of effective marketing, showing leadership throughout.
- Financial Analyst — As a financial analyst, you will use your knowledge of numbers to advise the company you work for on how to utilize funds for the organization. The focus is most often on investments. Many also venture into risk analysis as part of their job. There are two main types of analysts, which are the ‘buy side’ and the ‘sell side’ analysts.
- Marketing Analyst — Marketing analysts look at buyer trends, past marketing efforts and consumer information in order to predict future purchasing behavior. Their role is to advise on future marketing efforts and to monitor the effectiveness of any activities that are already being employed.
- Marketing Manager — Marketing managers are responsible for the overall running of a company’s marketing department. They supervise other employees as well as develop, implement and monitor market efforts. A large part of their job revolves around maintaining a budget for the marketing department and calculating returns on investment for various projects.
- Product Manager — Product managers, more often than not, focus specifically on software development, although there are also other kinds of product managers. In all fields, their role is to oversee the development and implementation of new products, to determine demand and to review whether or not demand is met.
- Inventory Analyst — As an inventory analyst, you will administer and examine the way a company buys and sells goods. You will also make sure that the right amounts of inventory are always in stock and that your organization complies with all the relevant regulations.
- Pricing Analyst — Pricing analysts work with various financial teams in order to determine what the floor, target and ceiling price of a product should be. They also scope issues and then start to define them in order to come up with solutions that enable them to actually measure prices. They are very strategic specialists, who aim to improve costing processes. To achieve this, they must also have excellent communication skills in order to report to senior managers.
- Quantitative Analyst — As a quantitative analyst, your role is to crunch various pieces of data in order to advise the organization as a whole on what the best possible financial decisions they could make are. You will also be responsible for the creation of mathematical formulas so that you can perform future projections.
- Systems Analyst — A systems analyst works at leadership level to help in the definition of goals and aims. They develop, design, fine tune and implement systems to ensure these goals and aims are achieved. Additionally, you will help to improve the computer systems within your organization, ensuring they can rapidly respond to new technology.
In spite of fears that time spent out of the workforce, or in a limited capacity during school might have an inhibiting effect on career mobility, the opposite seems to be true. A survey of 2015’s graduating class showed that MBA grads had success leveraging their internships and work projects into job offers 50% of the time.
In fact, more than half of 2015’s job-seeking business school graduates received early job offers prior to graduation – nearly 7 in 10 for domestic students. 18% of the offers extended to 2015’s graduating MBA’s were for senior level positions. Nearly 9 in 10 of 2015’s graduates felt that their MBA education improved their ability to find a job that met their expectations.
When you’re searching for a job, and trying to find one that matches your salary requirements, you may feel pressure to ignore these desires in favor of looking agreeable or as though you’re “in it for the right reasons.” However, no doubt part of your reason for getting an MBA was so you could earn a higher salary, and this isn’t something to be ashamed of.
YouTube Special Feature
Prof. Deepak Malhotra offers 15 pieces of negotiation advice, followed by Q&A, in an informal session for students at the Harvard Business School. Deepak Malhotra is the best-selling author of “Negotiation Genius” and “I Moved Your Cheese”.
In the following sections, we’re going to talk about how to talk about your salary requirements with your network, with recruiters and with companies so that you stand the best chance of earning the salary you need.
With Your Network
Your network is an excellent resource when it comes to the job search. People who already know you, like you and want to help you are the most likely to aid you in meaningful ways, so don’t shy away from telling them what you’re looking for and how much you need to make. It’s best, when talking to your network, to be as honest as the relationships allows.
Don’t cut anyone out of your network, either. Your friends, family members, coworkers, schoolmates and professors all count, and can be valuable sources of job leads and information.
We have talked a little bit about how to use recruiters to learn more about salary, but this section is really about how you should tell recruiters what you’re expecting in terms of salary when you work with them, i.e. when they are trying to place you with one of the companies they work with.
The main gist of the idea is that your salary should be a range. That makes it easier to talk to the companies they represent about how much you need, and leaves room for adjustments if expectations change along the way. You can also tell recruiters how much you would like to make, and ask their advice on what type of range you should consider putting to companies.
Of course, oftentimes you won’t use recruiters; you’ll just go straight to the company yourself. If this is the case, be open about your salary needs just as you would with your network or a recruiter. Don’t be afraid to give them a range, but be aware that they will naturally gravitate toward the lower end of that range, so be mindful when choosing it.
Giving a range accomplishes another thing as well. Even if companies cannot afford to actually pay you your ideal salary, they know what it is and may be able to make up for it in other ways, as with benefits or signing bonuses.
Landing a job with an amazing salary doesn’t mean much if you end up hating your job. This happens more than you might think, too: new graduates assuming that the great job they landed will fulfill their dreams, then quickly discovering that they’re a terrible fit for the size of the company, or its culture or even just a particular manager. Luckily, the Internet makes it possible to weed out many companies you wouldn’t like up front.
Research Companies on GlassDoor
GlassDoor lets you assess companies for factors beyond salaries, such as company culture, particular managers, organizational style and more. These are great tips for helping you assess whether a particular organization or even an entire field is for you. You can search by company and position, gleaning information about various companies, departments and more.
That being said, GlassDoor is also an excellent place for you to find information on salary, so don’t forget to look into that as well.
Follow Companies on LinkedIn
Following companies on LinkedIn is another excellent way to learn more about corporate culture, how employees are treat and more. You can do much more here than you can on GlassDoor, however, because on LinkedIn you can actually reach out and make connections with people. Especially if someone is already in your network and belongs to a company you might like to work for, you can send them a message (called InMail) letting them know your interests and asking them any questions you might have about culture, salary or other factors.
Find Out About Benefits
Even if you will love the company and its culture, and be happy with the salary, don’t forget to take benefits and perks into account. Even if you choose the best MBA degree it doesn’t command a high enough salary that you can afford to ignore perks them.
For instance, some jobs award compensation in the form of performance-based bonuses and stock options or purchase plans. You may also receive benefits such as profit sharing or tuition reimbursement, and some companies will offer you large signing bonuses when you sign. And if your health insurance isn’t good, you may end up paying a lot out of pocket to maintain your health, so don’t forget to ask about that. While none of these factors will make or break your career, it’s definitely worthwhile to ask about all.
Your new MBA may be the gateway to your dreams, but your salary – among other factors – will probably have a big impact on how happy you are at your job. That’s why it’s so important to perform the necessary research ahead of time.
Ideally, you will find out how the above factors impact your potential salary before deciding on a focus, and hopefully even before you enter graduate school. It can be devastating to discover after spending so much time and money that your particular degree doesn’t align with your desired geographical location, say, or the amount of money you need to make to pay off those loans.
Of course, if you really want to work in the wide world of business, then an MBA is likely to be a good move for you. Hopefully these tips just help you prepare in the right ways, so you can enjoy your new career for years to come.