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Is Business School Worth It?

Matt Hazenbush

Matt Hazenbush - mba.com

Matt Hazenbush is the former editor of mba.com and Director, Research Analysis and Communications for the Graduate Management Admission Council (GMAC).

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Every year, thousands of people just like you make the choice to invest in themselves with a graduate business degree and realize its powerful professional, personal, and financial benefits.

Will you join them, or will you be left wondering how an MBA or business master’s degree could have transformed your life and career?

But before you commit, you probably have a few questions, like is business school worth it? And what’s the return on investment of an MBA or business master’s degree?

Is business school worth it?

Is Business School Worth It: The Transformative Power of a Graduate Business DegreeTo help you determine the answer for yourself, we partnered with the Research Department of the Graduate Management Admission Council (GMAC) to do all-new analysis of more than 10 years of data collected from prospective students mapped to data collected from the same individuals following their business school experience. Comparing data collected at these separate points in time provides all-new insights on the value of a graduate business degree.

Our findings, as well as the perspectives of several recent graduates, are sharing in our report Is Business School Worth It: The Transformative Power of a Graduate Business Degree.

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Additional data on career outcomes and salaries are provided by the MBA Career Services & Employer Alliance (MBA CSEA), the leading professional network for MBA and business master’s career services professionals and the employers who hire those students.

“The skills graduate business education provides are very much in demand – not just traditional functional business skills, but also skills that have been needed even more during the pandemic such as dealing with ambiguity, problem solving and resiliency,” said Megan Hendricks, Executive Director of MBA CSEA.  

“As we look forward to the ongoing evolution of business schools and the future of work, an MBA degree continues to provide a unique opportunity to invest in a professional journey that leads to both short and long-term career success.”

Why go to business school?

Business school students decide to pursue their degrees for a variety of reasons – but a common thread is a desire to invest in themselves to accelerate and elevate their careers.

Whether you’re motivated to level up on your current career path, make a significant career change, or launch your career from the best possible position, investing in a graduate business degree offers tremendous value: it equips you with the in-demand skills, credibility, network support, and career opportunities necessary to have long-term success in an increasingly dynamic global economy.

“I aspired to managing a department but knew that I lacked the knowledge and skills necessary to understanding business from a strategy management perspective,” said Thuy Vu, a 2021 MSc in Business and Management graduate of the Stockholm School of Economics. “So, I decided that it was time for me to earn a business master’s degree abroad and learn alongside like-minded talents from all over the world.”

The top three specific motivations business school candidates cite are to increase the job opportunities available to them (74%), increase their salary potential (72%), and develop their general business knowledge, skills, and abilities (71%). A majority of candidates are also motivated to accelerate their career path (67%), develop their leadership skills (62%), gain professional credibility or credentials (58%), and allow them to change career paths (51%).

Emerging from business school with a degree in hand – and more importantly, valuable experiences – allows graduates to go on to realize high levels of career satisfaction. Among alumni, most agree that their current job makes use of the skills they gained in business school, is related to their desired career path, has opportunity for upward mobility, and is work they find personally meaningful.

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Who goes to business school?

There’s no one type of business school student. Classrooms are more diverse than ever before, and schools offer a wide array of program options that can help you meet your individual goals and needs.

Leading business schools attract talented students from a diverse mix of academic, professional, and demographic backgrounds. Among applicants who took the GMAT™ exam – the number one assessment in business school admissions – citizenship spans nearly 200 countries, and only about a quarter studied business as undergraduates. In US MBA programs, the percentage of Hispanic enrolled students doubled over the last 10 years, and the representation of Black and multiracial students are trending up as well.

Leading business schools value diversity and build their classes with diversity in mind not only to make the pipeline of global business leadership more reflective of the societies it serves, but also to improve the overall learning experience of their programs.

All students, regardless of background, benefit from a classroom experience that exposes them to diverse perspectives, which stem from a diversity of backgrounds and experiences shared in class discussions. Through learning, working, and growing alongside a diverse cohort of classmates, MBA and business master’s students emerge from their programs more thoughtful, empathetic, and informed about the world around them, and will bring that experience to bear in the leadership positions they’ll occupy in the future.

“The international and diverse backgrounds of my course were a great way to work alongside different cultures and experience a global business setting,” said Oliver Rink, 2020 MSc Business with Consulting graduate of Warwick Business School. “Communication is a major aspect of my daily life and it was a key part of my studies at Warwick. I can now apply the resources provided by WBS and adapt to new and changing situations to provide the best possible work within the projects and the company I work at.”

Regardless of where you are in your career journey, business schools can offer you a program that’s well suited to your experience level. Schools offer a varied portfolio of program types, including pre-experience business master’s programs for students just starting their careers, full-time MBA programs for students with roughly three to nine years’ experience, and a mix of professional MBA programs offered in flexible schedules and delivery formats, typically targeted at experienced professionals.

Quiz: Which Type of MBA Is Right for Me?

When it comes to MBA programs, you have a lot of options. Which type of MBA is right for you? Take our quiz to help you choose.

Can a graduate business degree advance my career?

Most business school graduates see an immediate professional payoff for their degree, as well as sustained professional growth over time.

Business master’s and MBA graduates have widely applicable skillsets and are highly sought after by leading employers across industries. Every year, a wide pool of organizations competes to hire business school graduates for highly desirable leadership or leadership track roles.

According to MBA CSEA, 87 percent of last year’s full-time MBA graduates received job offers within three months of graduation. Most, in fact, had a job offer before graduating (73%).

Activities facilitated through business schools are the primary source of most graduates’ job acceptances. Overall, 68 percent of job acceptances by last year’s class came via school-facilitated activities, including converting an internship into a full-time job offer (26%), interviews secured through the school (15%), job postings on school career systems (9%), and activities supported by the school career center (6%).

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Last year, GMAC’s annual survey of hiring professionals found that the majority of employers who recruited on business school campuses agreed that business school graduates tend to have a fast-track to upper-level positions in their organizations, and that leaders in their organizations tend to hold a graduate business degree.

Why so much confidence in business school graduates? The top reasons recruiters cited included that they are strategic thinkers, have strong communication skills, and have a versatile skill set. These skills – applicable to just about any business leadership role – are the hallmarks of a generalist graduate business education, proven over decades and continually updated to stay on top of the rapidly evolving business landscape.

“The whole MBA experience gave me the confidence to really consider how I could fit at an organization, and to not only go into an internship or interview thinking that they’re evaluating me, but that I’m evaluating them, too,” said Chelsea Gardner, 2020 MBA graduate of UNC Kenan-Flagler Business School. “That was a powerful shift in perspective.” 

Overall, 9 in 10 graduates agree that their graduate business education increased their employability (87%), and 7 in 10 agree their graduate business education provided them opportunities for quicker career advancement (68%). Of graduates who entered business school from entry-level roles, 3 in 4 advanced at least one career level within two years of graduating (75%).

Can business school help me change careers?

Upskilling with a graduate business degree can be an effective means of pivoting your career into a new field or role – or even a new country.

For most, long gone are the days where you’d land a job with a firm and stay put for the duration of your career. In fact, some researchers have said the average person should now expect to have as many as seven “careers” during their professional lifetime. Couple that with increasingly rapid shifts in the business landscape, the reality is that you can’t so much plan for the future as much as you can prepare for it.

Especially as we now come out of a global pandemic, people are increasingly reevaluating their careers and are eager to make a change for the better. In fact, about half of business school candidates say changing career paths is among their motivations for pursuing a degree (51%) – and around the same amount end up doing just that (50%).

Among the 38 percent of alumni who changed industries after graduating, the most common industries they pivoted into were products & services (21%), technology (20%), and finance (15%). Among the 37 percent of alumni who changed job functions, the most common roles they took on were consulting (30%), marketing (18%), and general management (18%).

“The MBA provided me with a solid grounding in core business topics like finance, corporate and business strategy, mergers and acquisitions, marketing, and accounting,” said Terry Sing Lee, who pivoted his career from the military to management consulting with the help of his MBA from Melbourne Business School.

Another common motivation among business school candidates is pivoting their career to a new country, like the United States, Canada, or countries in Western Europe.

A graduate business degree is an excellent means of international career mobility, enabling students to gain familiarity with the norms of a new country, gain work experience through internships, and earn a marketable degree that may qualify them for full-time employment there. In addition, the global diversity of leading business school classrooms prepares students to lead in international organizations. In fact, 70 percent of alumni agree that their graduate business education prepared them to work in culturally diverse organizations.

How much more can I earn with a graduate business degree?

The average business master’s or MBA graduate earns significantly more than they would without their degree – and sees substantially higher earnings over the course of their careers.

Among employers who recruit on business school campuses, the median starting salary offered to MBA graduates last year was US$115,000 – notably higher than what the same employers planned to pay for direct-from-industry hires ($95,000). According to MBA CSEA, last year’s mean starting salary for MBA graduates was US$124,000, and according to the Executive MBA Council the average salary and bonus package of Executive MBA graduates was US$193,000.

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Median salaries for business master’s graduate new hires – including US$85,000 for Master of Business Analytics, US$85,000 for Master of Finance, and US$75,000 for Master in Management – also came out ahead of median salaries for newly minted bachelor’s graduates (US$65,000).

“Earning a business master's degree not only built up my technical skills in business analytics but also made me a stand-out applicant in the competitive job market,” said Barbara Wu, 2020 Master of Business Analytics graduate from Emory University’s Goizueta Business School. “With the unique skills I earned in my master's program, I was able to secure a much higher salary than I would have before I went to business school.''

Seventy percent of global employers agree that employees with a graduate business school education tend to earn more than others in their organizations. This is especially true in the consulting (81%), healthcare (74%), and products/services (72%) industries.

Across the entire sample of graduates from the last 10-plus years, the average percentage increase in salary was 42 percent. Nearly 8 in 10 alumni agree that their graduate business education increased their earning power (77%).

This is often referred to as the business school salary premium, and over the course of your career the difference between what you make with your graduate business degree versus what you would have made without it adds up to a life-changing amount. According to analysis from the 2021 Corporate Recruiters Survey Report, an MBA graduate can expect to earn US$3 million more than someone with only a bachelor’s degree.

So… Is business school worth it?

When all is said and done, do business school graduates feel their investment of time, energy, and money was worth it?

The data, and the personal stories of graduates, clearly demonstrate that MBA and business master’s degrees are a well-worn path to career advancement and leadership positions across industries, organization types, and continents.

Overall, 94 percent of alumni rate the value of their graduate business education to be good, excellent, or outstanding. What’s more, nearly 9 in 10 report that they’ve had a positive return on investment on their business school degree (87%).

Most telling of all, the vast majority of alumni say their graduate business education improved their lives professionally (84%), personally (72%), and financially (69%).

“Business school was key to unlocking my full potential. It was my means of becoming the learner, the professional, and the leader I dreamt of being, all while advancing my knowledge of finance, statistics, marketing, and management (to name a few),” said Mariyah Adnan, 2021 Masters in Management graduate from the Georgetown University McDonough School of Business. “The Masters in Management program for me was the bar that separated me from simply having a job to developing a career. For that reason, business school was worth it for me.”

Whatever your specific business career goal or motivation, investing in the business school experience can help you achieve it. Whether you’re just starting your career or knocking on the door of the highest levels of management, the world’s leading business schools will have a program option that’s a strong fit for your goals, preferences, and level of experience.

How would a graduate business degree transform your life and career? There’s only one way to find out.

MBA Return on Investment Calculator

Use our ROI Calculator and play out your earning scenarios with and without an MBA.

Matt Hazenbush

Matt Hazenbush - mba.com

Matt Hazenbush is the former editor of mba.com and Director, Research Analysis and Communications for the Graduate Management Admission Council (GMAC).