For those who wish to enter a business-related profession, a Master of Business Administration (MBA) is considered a prestigious designation that will open up doors. One of the main reasons why people pursue this graduate degree is because of the earning potential — MBAs often have much higher starting salaries than their peers with or without bachelor’s degrees. But that’s not the only motivation for professionals to earn an MBA.
Another benefit is that business school gives you ample opportunity to network with established professionals in business administration, which will set you up for success and help you land roles.
There is, of course, the fact that you’ll learn about different areas of business administration and gain a wide variety of critical skills. Management is chief among these. You’ll also get the opportunity to explore different niches and specializations. And, when you’re looking for an entry-level job, you may well find that you can start in a higher position than you would have otherwise. An MBA, after all, lends you a considerable degree of credibility — in addition to the actual degree!
The overall median (base) starting salary for MBA graduates in the United States was $115,000 in 2019, according to the Graduate Management Admission Council. This was a record high, and more than double that of entry-level hires with bachelor’s degrees. However, starting MBA salaries took a bit of a dip in 2020, likely due to the pandemic and accompanying global recession. This will likely rise again this year, 2021.
The average starting salary for MBA graduates is complicated by a number of factors. Location plays a big role, with those in big cities like New York and San Francisco often earning more than their peers in more rural areas. Industry and niche, too, play a significant role in both starting salary and earning potential. The business school from which you graduate also affects your entry-level salary, often more so than it will affect later business jobs.
While you’re likely to land an incredible role with an MBA from numerous business programs, some graduate schools are standouts. Bear in mind that while these programs have graduates with the highest median salary, that doesn’t mean they’re necessarily the best for every student. For instance, The Wharton School, widely thought of as the top business school, is missing from this list. (Data comes from US News and World Report.)
Stanford’s Graduate School of Business has the lowest acceptance rate among its peers — just 6%. The prestigious MBA program has a number of qualities, including access to world-class faculty and speakers. Students are required to participate in one global experience as part of the program.
NYU’s famous Stern has a wide range of programs tailored to meet the needs of its students, including a full-time and part-time MBA track, along with its Tech MBA and Fashion & Luxury MBA programs. According to a report, 91.8% of 2020 graduates received an offer of employment within three months of graduating.
The Ivy League university’s business school prides itself on offering an immersive and individualized learning environment with plenty of personalized support. The curriculum emphasizes both business theory and practice, combining a first-year core curriculum and second-year electives that give students exposure to a number of niches.
Kellogg offers several paths for students to earn their MBA, including a full-time and evening & weekend track. The school’s career management center has landed in the top 20th percentile for MBA satisfaction consistently, as per BusinessWeek. Additionally, the school offers more than 1,000 experiential learning opportunities.
The second-oldest business school in the country, Booth offers four MBA programs: the Full-Time MBA, Evening MBA, Weekend MBA, and the global Executive MBA Program. Each is taught by world-renowned faculty, a huge network and strong preparation for a management career.
Industry immersion, an emphasis on teamwork and world-renowned faculty are part of what make Cornell’s Johnson such a strong business school. The school offers several MBA programs with different timelines and specializations, such as the Tech MBA degree program, ideal for students who want to apply their knowledge to technology.
Harvard Business School’s full-time MBA program is focused on real-world practice. According to the prestigious school, more than 50% of graduates go on to found their own businesses, and HBS provides numerous resources to support them. The curriculum itself includes case method courses, FIELD projects, tech simulations, introspective exercises, and more.
Routinely introducing new programs to help students tackle real-world challenges, Columbia Business School aims to prepare students for a changing world. The school has 150 full-time faculty and 100 adjunct faculty, including thought leaders, researchers, and business practitioners.
UVA’s Darden School of Business has been ranked #1 best business education experience in the United States for nine years in a row by The Economist. In addition to the traditional full-time MBA program, the school offers an Executive MBA and Global Executive MBA format and boasts 17,000 alumni in 90 countries, across a wide variety of specialties.
More than 1,300 attend Fuqua, and a large share pursue MBAs in their many forms — Accelerated Daytime MBA, Daytime MBA, Global Executive MBA, and Weekend Executive MBA. The school offers a curriculum with a wide number of concentrations and few core classes, granting students more freedom with their curricula.
There is a wide variety of industries to which someone can take their MBA. After all, practically every organization in any field can use the help of a business professional. And starting salaries, too, vary by industry. Here are some of the highest-paid industries for people with MBAs. (Salary data is from Payscale.)
Technology isn’t just a field for software developers. This high-paying industry has many roles for people with a knowledge of and skills in established and emerging technologies, including business professionals. While some executive and leadership roles usually go to those with a tech background, such as chief technology officer (CTO), others are more appropriate for MBAs. Today, especially, many startup CEOs are business professionals, often with an MBA.
Do you dream of working at a major business firm? The so-called Big Three, including Bain & Company, Boston Consulting Group and McKinsey & Company, are coveted destinations for many MBAs. But they’re far from the only consulting firms where you can earn a six-figure salary right out of the gate. A highly lucrative field, consulting helps businesses improve their management and operational strategies and procedures, demanding the skills of knowledgeable business professionals.
Finance is another popular field for business professionals, MBAs in particular. It’s an extremely lucrative niche for people with bachelor’s degrees, but your earning potential is even higher if you have a graduate degree. There are a number of roles, such as financial analyst, accountant, financial manager and many others. Chief financial officer (CFO) is an executive role that even new MBA graduates might be able to land, especially at startups or smaller businesses.
Again, marketing jobs are not difficult to land with just a bachelor’s degree. But you’ll more than likely be able to start out at a higher level and with a better salary if you have an MBA. It also opens up possibilities in the field, including market research analysis. Many businesses also have chief marketing officers (CMOs).
Compensation isn’t limited to your base salary. You should also consider other elements of your package, which often includes:
This is the standard annual salary you’ll be offered. There may be opportunities for raises as you move forward in your career.
In order to entice prospective hires to join an organization, many employers offer bonuses on top of your base salary as part of your offer. A signing bonus, a one-time, often substantial lump sum, is common for MBAs. Another is profit sharing, a predetermined percentage of company profits to be paid to the employee.
Employers may give out other types of bonuses later on, such as a retention bonus, which is meant to encourage employees to stay with a company, or a performance bonus, awarded based on merit.
Although not immediately available to employees, stock options are frequently offered to MBAs on top of their base salaries as another means of encouraging them to join the company.
Retirement plans like a 401(k) are a common part of compensation packages, not just those for MBAs. Many employees match employee contributions up to a certain percentage of their paychecks.
Some employers offer tuition reimbursements to MBA graduates, usually if they return to their companies — in a higher-level role — after they finish their education.
There are other considerations, too — insurance, remote work options and PTO, to name a few — to keep in mind when choosing where to work.
No matter what their niche or school, MBAs often have successful careers. Remember, though, that the highest base salary isn’t the only factor to consider when choosing your path. Ultimately, you’ll more than likely have plenty of lucrative options.