Is An MBA Worth It? How To Know The Answer For You
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Studying an MBA can be a life-changing moment for people. No other qualification in the world can give you the boost in earning power, career opportunities, personal development, and global network that an MBA can. It's why it's one of the most famous and highly valued qualifications in the world.
But there's no getting away from the fact that MBA's are expensive. The top programs in the world can cost as much as $150,000, and that's before you factor in living costs and other fees. It begs the question: is an MBA really worth it?
In this article, we'll explore:
1. What is an MBA?
2. Who is an MBA for?
3. The cost of an MBA
4. The biggest benefits of an MBA
5. How to calculate your return on investment
6. Whether an MBA is worth it for you
What is an MBA?
An MBA stands for Master of Business Administration. It's a generalist degree that teaches students the fundamentals of business such as marketing, finance, accounting, analytics, communication, leadership, management, and much, much more.
Because the skills taught in an MBA can be applied to a wide range of businesses and industries, it's one of the most sought-after degrees in the world for employers. However, for the same reason it's also one of the most expensive.
Who is an MBA for?
An MBA is typically suited to mid-career professionals who are hoping to take the next leap in their career— normally into management or leadership roles. According to the Graduate Management Admission Council’s latest Prospective Students Survey, the bulk of MBA applicants are aged between 25 and 30.
Although MBA graduates end up in a range of different industries, the three most popular are consulting, finance, and tech. This has remained consistent for a number of years.
The cost of an MBA
According to the BusinessBecause Cost of MBA Report 2023, the average total cost of a global top 20 MBA program is US$202,000. This includes tuition fees, living costs, healthcare costs, and other additional fees.
Of course, this is the very top end of the spectrum when it comes to the cost of an MBA. Tuition fees start from around US$30,000 in the United States, and tend to be lower in other regions.
The benefits of an MBA
Salary Boost
Arguably the clearest and most obvious benefit of an MBA is the salary boost it gives you. The majority of programs in the Financial Times Global MBA Ranking 2024 provided a salary boost of 100% or more. Graduates of the Indian School of Business MBA saw the highest average salary increase, at 229%.
The GMAC Corporate Recruiters Survey for 2023 revealed that the average starting salary of an MBA graduate is US$125,000. That figure is significantly higher than any other business master's degree.
The opportunity to change career
Because an MBA is a generalist degree, you can apply the problem-solving, analytical, and communication skills honed during the program to a wide array of career routes—whether that's fast-tracking your current career or aiming for a total career change.
This is exactly what Charlotte Burnett managed to do when she graduated from her MBA at UNC Kenan-Flagler Business School. Charlotte joined the MBA after serving in the US Army, and by the end of the two-year program, she'd secured a brand-new career as an associate with JP Morgan.
“The MBA program was extremely collegiate and collaborative,” she says.
When it comes to using an MBA to change your career path, Charlotte's not alone. According to a recent study by the Graduate Management Admission Council (GMAC), 50% of business school alumni change industries after their program.
International opportunities
But that's not all. Most MBA programs tend to have an international travel element, such a semester abroad or a summer exchange program. These initiatives give you a chance to build your international network and open yourself to job opportunities in other countries.
And of course, if you decide to study abroad then you can take advantage of the school's links with local recruiters. Many countries, such as the United States, also offer post-study visas that allow you to stay in the country after completing your MBA, giving you valuable time to search for your new role.
'Hard' business skills
The typical Master of Business Administration curriculum covers topics like corporate finance, strategy, marketing, organizational behavior, and accounting. MBA students graduate from business school with a good understanding of what each business function does, and how they interact with one another.
It's another reason why MBA's are so valued by employers.
Soft skills and personal development
Yet the so-called 'hard' business skills you gain in an MBA are only one side of the story. Also valuable are the soft skills you'll gain, such as communication, leadership, teamwork, management, critical thinking, decision making and problem-solving.
These skills will help you not just in business—as they are what employers are looking for—but in almost every aspect of your life.
A network for life
As the old adage goes, it's not what you know, it's who you know. And it's especially true in the world of business.
One of the most powerful rewards of the MBA experience is the quality and size of the network you build while completing your degree. And you have the power to directly impact the value of your network. It can extend far beyond your classmates and peers to include your professors, mentors—and even business leaders you meet along the way.
But perhaps the most compelling reason to believe in the value of an alumni network is that more than 90% of survey participants said they would recruit graduates of their alma mater. It's not what you know...
Calculating your return on investment
Although the benefits of an MBA are fairly clear, you still need to make sure you're going to be able to recoup your initial outlay.
To do that, you can use an MBA ROI calculator to get an idea of your likely return on investment. Of course, a tool like this can only give you a rough idea of what you can expect to earn after graduating, and when you can expect to repay your investment.
• the total cost of the program, including tuition fees and living costs
• your opportunity cost, which is your lost earnings while studying an MBA
• the average starting salary and bonus of MBA graduates from your target schools
• the scholarship and financing opportunities at your target schools.
All of these factors will help you calculate your return on investment for an MBA.
So, is an MBA worth it?
However, it's worth remembering that an MBA isn't for everyone. For one, it's highly focused around the consulting, finance, and tech industries, so if you're not looking to work in one of those areas then an MBA might not be for you.
Ultimately, it comes down to you and your own career aspirations. Think about your career goals, and then ask yourself whether an MBA would help you achieve them. If the answer is yes, then perhaps it's time to start your MBA journey.