Earning power: What it is and how to boost it

Apr 20, 2011
Tags: Career

Simply put, earning power is your potential to get paid for the skills you bring to the workplace. Our research of current b-school grad students, alumni, and recruiters continues to show us that higher education leads to greater marketability, which leads to greater earning power. Greater earning power leads to greater job satisfaction…as well as greater ability to succeed in a rapidly changing economy.

Class of 2010 business school graduates had a lot to say about their education and its impact. In September 2010, about 800 still-new graduates told us that their starting salaries met or exceeded their expectations. Three out of five of these alums told us they considered the value of their graduate business degree excellent to outstanding in terms of boosting their earning power and putting their careers on a higher trajectory. 

More to the point, these Class of 2010 alumni reported a median starting salary of US$78,820—nearly 20% higher than the median starting salary reported by the Class of 2009 (US$66,694). And those earnings just continue to rise as b-school alumni add more experience to the skills they gain in school; b-school alumni who graduated during the last decade reported a median salary of US$94,542 (2011 GMAC Alumni Perspectives Survey).


The message is simple: Education increases your potential for future earnings. 

We survey corporate recruiters every year—in 2010, respondents said they planned to offer recent MBA grads salaries nearly double what they’d offer to undergraduate students with a bachelor’s degree. This tracks with data from the US Census Bureau report, Educational Attainment in the United States: 2009, which showed that advanced degree holders earned, on average, 42% more than someone with only a bachelor’s degree.

Even better, of the employers we surveyed in 2010, a majority viewed their MBA talent as more competent than other employees at the same job levels in several aspects, including managing strategy and innovation (86%); general business functions (82%); strategic and system skills (83%); managing decision-making processes (79%); and in leadership, motivation, and learning (74%)—a perception that could certainly affect salary levels.

Whether newly acquired or refined, the skills that graduate business degree holders bring to the workplace benefit the companies that hire them. Employers from our survey see graduate management degrees as symbols of quality and the people who hold them as part of their companies’ long-term investment in growing their business. 

Come back soon to hear more about Class of 2010 alums: How their degrees are paying off in terms of job satisfaction and what strategies they are using to develop their careers. We’ll also have some information to share about corporate recruiters’ hiring plans for the coming year. Meanwhile, let us know what you think and what you want to know. Thanks for visiting!