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The Master of Business Administration: Is the MBA Worth the Time, Effort, and Cost?
by Randall S. Hansen, Ph.D.
Are you a job-seeker who is looking for more responsibility and pay, seeking more leverage in obtaining a work/life balance, or contemplating a move into management -- and are considering returning to school to get your MBA? Or perhaps a job-seeker exploring changing careers by going back to school for your MBA? Or perhaps a consultant looking to add a credential to your dossier. Or perhaps a college junior or senior contemplating going straight through and obtaining your MBA right after your undergraduate degree?
Regardless of your reasons, if you are contemplating attending graduate school to obtain your MBA, you should read this article before you make your final decision. This article will take you through all the important issues you need to contemplate before making your decision of whether -- and when -- to obtain your MBA.
What is an MBA? It's a Master of Business Administration degree, granted after one to two years of graduate-level university study that provides training in the theory and practice of business management. The MBA is basically a document that certifies that you have a general competency in all the major functional management roles you'll find in the modern corporation. An MBA is a career accelerator across a number of industries and MBA graduates can usually command higher salaries.
Ideal Time to Get MBAWhen is the best time to enroll in an MBA program? The obvious answer is to enroll at a point in your career when the MBA is necessary to take your career to the next level, but the choice is never that simple.
For the college undergrad, the biggest question you need to ask yourself is why -- why are you interested in going straight through and getting your MBA right after your bachelor's degree? The top-ranked programs will not even admit you if you don't have at least several years of experience, and a freshly minted MBA with little or no job experience is often in a much tougher job hunt than a recent college grad with little or no job experience.
For the job-seeker, the question about getting your MBA involves how as much as when. Will you keep working while earning your MBA in a part-time program or do you have the financial resources to quit your job and return to school full-time? Will your current employer help finance your MBA? Do you need the MBA as part of a career change -- and if so, how are you going to do it?
Finally, there is the question of the economy. Some people think it's a good hedge to get an MBA during an economic slowdown -- a safe haven -- rather than face the tough job market; however, when the economy is bad, even having an MBA is no guarantee of obtaining a lucrative job offer. The best advice? Talk to recruiters and MBA career placement counselors -- and read the current trends in magazines such as Business Week, Success, U.S. News and World Report.
MBA Enrollment TrendsThe number of MBA degrees conferred annually has seen explosive growth over the last few decades, going from under 5,000 MBAs in 1960 to more than 100,000 MBAs in 2000 -- and now averaging more than 150,000 annually, according to the National Center for Education Statistics (NCES). Enrollment is also influenced by the economy, and as the economy turns toward a downturn, both recent grads and displaced workers head back to earn their MBAs.
Because of the growing number of graduate business programs that confer more and more MBA degrees, the degree itself is not as special or highly-valued as in the past. An MBA alone will not be the magic key to the door of career and job-hunting success.
Types of MBAOne of the questions you'll need to answer is whether you are interested in a general MBA, which is often shorter in duration, or a specialized MBA, which may take longer but make you more marketable.
Regardless of the type of MBA, the core topics you'll encounter include:
- Quantitative analysis
- Organizational behavior
Specialized MBAs offer more advanced study in a particular area of business (such as marketing) or a particular industry (such as higher education).
Finally, you'll need to determine the value of the "name" of the program you are considering. If you are searching for a big push that fast tracks your career, snagging an MBA from one of the top schools in the country may be the ticket. But, if you're looking to simply get ahead and move your careers along, don't discount the many MBA programs that are unranked but that offer you the degree and value you need. (See the link for Business Week, below, which is one of several organizations that rank MBA programs.)
MBA Costs -- and ReturnsAccording to one salary guide, an MBA is worth about $10,000-30,000 a year over a bachelor's degree, but the salary increase you could see may be much less -- or much more. Factors that can affect your salary include:
- whether you stay with your current employer or seek a job with a new employer.
- the amount of relevant experience you have for the job you are seeking.
- the reputation of the graduate school you attended.
- the type of job you are seeking -- and the level of supply/demand for workers.
- the industries where you are seeking a job.
- the location of the jobs you are seeking.
But don't forget to factor in the costs as well, with the average cost of graduate study leading to an MBA at about $40,000. Tuition and expenses add up to about $54,000 per nine-month academic year (resulting in an investment of more than $100,000 for the full-time two-year MBA). You'll find tuition closer to $30,000-40,000 at state university and college graduate programs, and those schools with generic MBA degrees.
What an MBA Can Do for Your CareerIf you're looking for the MBA to help you get into the executive suite, it may be just the ticket you need. According to a study by Accountemps, a global temporary staffing service for accounting and finance professionals, 80 percent of executives responding to the survey said that a graduate degree in business is still important to reach senior management ranks within most companies.
And there is growing evidence that having an MBA not only gives you more leverage in dictating new job titles and salary, but also gives you leverage in achieving a better balance between work (read: fewer hours working) and life outside work.
Final Words of Wisdom About MBAsWhatever you do, don't jump into an MBA program without doing all the necessary research and introspection. And once you have made the firm decision to attend a graduate business program, make sure you read one of our other articles: Criteria for Choosing a Graduate Program.
Graduate School and MBA SourcesThere are numerous other good sources of information about attending graduate school -- and about the MBA in particular.
Quintessential Careers Graduate/MBA Sources:
See also our article: Considering Graduate School? Answer These Five Questions Before You Decide.
For application help: Mastering Your MBA Application.
Other MBA-Related Sources:
MBA Trends -- a listing of articles pertaining to MBA trends, degrees, programs, etc., published in previous issues of Business Week.
MBAinfo.com -- a comprehensive MBA program directory and information source. Includes a great glossary of MBA terms.
gmac.com -- the official site of the Graduate Management Admission Council. Contains some great information, resources, forums, and worksheets to help prospective MBA students determine the best programs and schools for you.
For the most recent editions of the best MBA and graduate school-related books, please go this section of our online bookstore: Graduate School Books.
Questions about some of the terminology used in this article? Get more information (definitions and links) on key college, career, and job-search terms by going to our Job-Seeker's Glossary of Job-Hunting Terms.
Dr. Randall S. Hansen is founder of Quintessential Careers, one of the oldest and most comprehensive career development sites on the Web, as well CEO of EmpoweringSites.com. He is also founder of MyCollegeSuccessStory.com and EnhanceMyVocabulary.com. He is publisher of Quintessential Careers Press, including the Quintessential Careers electronic newsletter, QuintZine. Dr. Hansen is also a published author, with several books, chapters in books, and hundreds of articles. He's often quoted in the media and conducts empowering workshops around the country. Finally, Dr. Hansen is also an educator, having taught at the college level for more than 15 years. Visit his personal Website or reach him by email at randall(at)quintcareers.com. Check out Dr. Hansen on GooglePlus.
Have you seen all our career and job resources for job-seekers considering an MBA, currently attending an MBA program, or who have an MBA? Go to: Job and Career Resources for MBAs or MBA Resources.
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