An MBA is a master’s degree, just like any other degree, but it is often thought to be the first among equals; the crème de la crème. Of course, a specific degree needs to have more than just star appeal and a highly fashionable status in order for you to invest your hard earned money in doing it. It needs to deliver a real return on investment in terms of enhanced earnings potential and increased job security/employability over your life time. The question is, will the highly prized MBA degree actually deliver net positive life time returns?
Well, according to this ROI infographic presented on inc.com an MBA degree does pay off, with MBA graduates reporting that they recoup 1/3rd of their investment over the first year of work, 100% of their investment 3 years after graduation and 2X their investment 10 year’s after graduation. And 3 out of 4 of those graduates surveyed say that they could not have obtained their job without their graduate business education.
Also, this research from top MBA.com shows that the career earnings of MBA are superior to those who don’t do an MBA. Their analysis showed that average annual salary increases over a life time were 5% for MBA graduates compared to just 3% for non MBA graduates. Over a 30 year working span that could amount to tens of thousands of pounds/dollars in incremental earnings as a direct result of doing an MBA
However, it’s important to note that not all MBAs are equal and you will get a bigger return on investment from some specific MBA subject areas. This study by Payscale.com shows the following trends in return on investment from an MBA, depending on degree subject. The estimated 30 year earnings for the following degrees are listed below.
1.Finance MBA – $3,210,000 life time earnings estimate
2.Marketing MBA – $3,060,000 life time earnings estimate
3.Technology MBA – $2,680.000 life time earnings estimate
4.Human Resources – $2,060,000 life time earnings estimate
As you can see a finance MBA can give you the biggest return on investment whereas a Human Resources MBA gives one of the lowest returns on investment.
Based on all the research, it does seem like an MBA degree still represents a good investment, given the likely returns. Still the initial outlay can be quite large and one way you can potentially reduce the costs is to do an online MBA. Online degrees are growing in status and reputation now and according to this report which reviewed 99 research studies between 1996 and 2008, courses including online learning produced stronger learning outcomes than face-to-face teaching. So, don’t be afraid on doing an online MBA, rather see it as a flexible and more cost effective way to get an MBA qualification and advance your career.