The MBA degree is revered as a fast ticket to career success and financial prosperity. However, as the cost of education continues to rise, prospective MBA aspirants may find themselves grappling with a crucial question: is an MBA worth the investment?
MBA programs continue to attract ambitious professionals around the world. Yet, with the significant financial commitment and opportunity costs associated with pursuing an MBA, it has become essential to understand the return on investment (ROI) in the degree.
“It is incredibly important for candidates to consider ROI in their overall evaluation of the MBA. Finding a business school that offers strong employment outcomes in the desired industry will help ensure that students secure the return they are seeking,” says Rebekah Lewin, senior assistant dean for admissions and programs at Simon Business School at the University of Rochester in the US.
But there are numerous factors that shape the MBA’s financial and professional impact -- from the potential salary advancements, accelerated career growth, networking advantages, and industry credibility that an MBA can bring to the table.
Lewin recommends considering the cost of the program (tuition and living expenses), availability of scholarships, and expected average salary earnings post-MBA as a way to calculate the expected payoff.
She warns, however: “Some students focus only on the scholarship they are receiving without looking at the overall cost. Others are concerned about taking on debt and forget to fully consider future earnings and how quickly they can pay off their MBA if they go to a school with strong salary potential.”
Understand the rewards and the hurdles of an MBA
But it’s equally critical to remember these figures represent collective outcomes, and individual results can vary based on multiple factors, points out Michelle Zhu, MBA administration director at China Europe International Business School (Ceibs) in Shanghai.
Pursuing an MBA involves significant time, effort and financial resources. Zhu says it’s important to be prepared for potential challenges such as the demanding academic workload, adjusting to new cultural environments, and maintaining a balance between school and personal life. “By understanding both the rewards and hurdles, you can make an informed decision and maximize the return on your MBA degree,” she adds.
To enhance the return, Zhu says it’s also important to consider the less tangible aspects beyond the boost to earnings. “The hidden gems are the ones that aren’t immediately obvious but have a profound impact,” she adds. “These include the development of soft skills such as leadership, problem-solving, and interpersonal communication.”
An MBA also provides students with a global perspective on business, which is essential in today’s interconnected world. The network you build during your MBA studies can also provide lifelong personal and professional benefits, says Zhu.
Find the right MBA program fit
Each person’s definition of ROI could be different -- learning, skills development, network, salary or career impact or something else entirely. Once defined, they should research business schools to see which offer best aligns with this, says Helen Foley, MBA program director at London Business School.
“There is a vast array of information available outlining each program’s offer, so it is important for a candidate to know what matters most to them. Talking to members of the community – both current students and alumni – as well as collecting case studies will always provide the richest set of data for testing the likely ROI.”
The main mistake students can make is to not be open to the opportunities that the MBA will afford them, she adds. “While some students have fixed plans and some stick to them, it's important not to have too rigid an outlook. We encourage students to develop their ability to deal with the unexpected, to foresee bumps in the road, and to be prepared to change paths,” says Foley.
Most top MBA applicants are by nature very diligent and analytical, says admissions consultant Stacy Blackman in Los Angeles. “But the actual inputs of a ROI analysis for an MBA program are hard to measure because so many variables are qualitative. For example, the valuable networks and prestige afforded by an elite MBA brand can’t be assigned an absolute value or number,” she explains.
To maximize return, she advises her clients to focus on school fit with their career plan. “The MBA’s worth depends entirely on your professional profile and career aspirations and what you do once you are in the program. Fit with and performance on the program are essential,” Blackman adds.