A Masters in Business Administration is a coveted title. It can open potential career flexibility and serious advancement opportunities, but it does come with a steep price tag. The average expense for an MBA degree would be around $100,000 to $200,000. With the high education costs, are the additional years and debt really worth it? Why are more and more people taking MBA studies instead of working? Does it really make a difference? Those who decide to take an MBA believe their salary will increase more than 200% from the pre-enrollment salary of around $58,000 to $140,000. While that sounds like a great reason to take an MBA, in reality things are a bit different. There are many factors to consider as an MBA graduate. Your salary will definitely depend on gender, location, and industry. Work experience pre-MBA also matters for employers.
So, what is the average salary of an MBA graduate?
Payscale conducted a survey where they analyzed the average salaries of an MBA degree holder in different job titles. Lead analyst of Payscale, Katie Bardaro, says “Getting a higher degree is not always a win, so you really have to be aware of what is common in your field and what is desired in your field”. Some people who take an MBA find it easier to have a career shift from their pre-MBA work. The average mid-career pay for any MBA graduate, regardless of the field, is $104,000. But the top industries for MBAs are manufacturing, non-profit, technology, finance and accounting, and products and services. The average mid-career MBA pay for marketing is $113,000. If you become a marketing director, you can get around $133,000. This is $20,000 higher than a marketing manager earning $102,000. A business development manager earns just $3,000 more than the marketing manager. In the finance industry, the average mid-career pay is $121,000 with the chief financial officer title giving the MBA graduate a high pay of $168,000. The finance industry is filled with MBA graduates even at the junior level. However, common jobs in accounting for MBA graduates earn a bit lower then those who focus on finance. A CFO can get an average salary of $125,000 while a financial controller and senior accountant get $90,500 and $60,800 respectively. That’s a big difference from the CFO position in the finance industry.
If you decided to take an MBA straight from college, then do not expect the higher scale of an MBA salary. Payscale revealed that MBA graduates with less than four years of work experience get an average of $55,779 while those with 5-9 years can get around $71,920.
Gender and location also play a role in your salary as an MBA graduate.
The average salary of a female is lower than that of a male candidate. Female candidates can get a salary ranging from $43,071 to $97,207. Male applicants can get $51,518 to $122,558. That’s around a $10,000 to $30,000 difference due to gender. As for location, common cities include New York, Chicago, Houston, Atlanta, and Dallas. But California has the highest paid MBA with 12.4% of people have an average salary of $99,625.
While the average salary of an MBA graduate is smaller than what MBA students expect from the beginning, it is not impossible to get a high six-figure salary. In fact, a Wharton graduate was reported to receive a $350,000 salary upon signing, while a Columbia Business School MBA graduate received $310,000 base salary from a private equity. But beyond the pay, remember that an MBA rewards you with new skills, a broader network, and more knowledge that you can use in your work or in starting your own business.
In the end, an MBA still pays off.