BEFORE investing the significant money and time needed to undertake an MBA, potential students should be keen to know the chances of getting a decent return on their investment. Of course, future remuneration isn’t the only motivation for undertaking further study, but if you knew that it would likely cost you more than you got back in future earnings, you might well think twice.
MONEY, IT’S A GAS
Luckily, for potential MBA students, the latest Alumni Perspectives Survey undertaken by the Graduate Management Admission Council (GMAC) shows that “alumni from all years typically recouped one-third of their financial investment in their graduate degree within the first year after graduation and 100 per cent of their investment in their degree after four years” (see graph, top right). Ten years after graduation, alumni, on average, nearly doubled their return on investment. There are some caveats that anyone approaching these statistics must bear in mind: The response rate was 27 per cent for 2011 dropping off to as low as 5 per cent for alumni graduating in 2001, and there is no doubt some selection bias – those that are more successful are surely more likely to answer a questionnaire made to measure success. Also, prospective full-time MBA students need to factor in the lost earning when calculating their return on investment. Nevertheless, as the graphs suggest (right, middle and bottom), if you are a cut above the admittedly talented average and geographically mobile, post-MBA incomes can be significant.
ALL YOU NEED IS LOVE
Most people’s studying and career choices are motivated by more than money. When Cana Witt, MBA career development manager at Lancaster University Management School, asks each incoming class why they are their, “to get away from a bad boss” features remarkably highly. She notes that GMAC’s research found something similar. Although earning more money features highest (43 per cent) as the reason alumni change jobs, Witt thinks it’s “interesting to note how many of the reasons are people related, perhaps through being blocked, or ignored, or unmotivated, or over-worked, or the working relationship with the boss.” The next three highest reasons for moving jobs were: no room for improvement (32 per cent); wanted to develop broader base of experience (31 per cent); corporate culture did not meet expectations (29 per cent).
Beyond salary and job satisfaction, MBAs can be about learning the skills to build a company from scratch. Professor Amanda Broderick, dean of Salford Business School, notes: “Career development is, of course, central to any MBA applicant – but true value is gained by those programmes that not only develop the business leader for employment, but also develop the entrepreneurial and business innovation skills and knowledge for self-employment and the creation of employment for others.”
OPEN DOOR POLICY
Whatever the motivation, MBAs can open doors. The GMAC report found that “three out of four alumni of the class of 2011 with jobs report they could not have obtained their job without their graduate management education.” And: “93 per cent of the class of 2011 alumni employed at the time of the survey had found the job they were looking for.”
However, as important as it is to look at the positives – of which there are many – it is vital to consider the negatives too. Broderick says the unsuccessful MBA student doesn’t: engage with the business network they develop during their MBA experience; nor capitalise on their exposure to different mindsets and ways of doing things, using these inputs to stimulate business innovation; nor appreciate that we operate in an international environment where excellence is expected. Bob Ludwig of GMAC adds that those not benefiting from an MBA course have not done their homework: “Putting too much emphasis on rankings and not on what is the best fit for them; going to a programme/school where your target companies/industry do not recruit; not being clear about your expectations for the degree.”
It is reassuring that despite the economic turndown employers still demand MBA graduates. But before embarking on their studies, potential students need to ask themselves a few questions if they are not to make mistakes and be in the minority that don’t get what they want.
Neil Dewsbury, senior partner at the global resource consultancy Flame Pharma, cautions: “It is important to be very self motivated and driven.” He says, “an MBA will always be very hard work, and many are not prepared for the step-up.” Dewsbury adds: “A number of candidates study for an MBA alongside their working life, and in a lot of cases the individual will already be quite progressed in a career – juggling the two pressures is very demanding.” Ludwig suggests potential MBA students ask the following questions:
Assess yourself: Where are you in your career? What is it you expect to do with the degree? Is the MBA valued in the industry or job that you want after graduation? Does that company/industry recruit at the school/programme you want to attend?
Define your expectations: What do you expect to get out of the programme? What do you expect to be able to put into the programme – in terms of time and resources? Are you willing to enhance your networking skills?
Do your homework: Thoroughly research the programmes that appear to meet your needs. Research may entail not only visiting websites and looking at written material, but also talking with alumni, current students and faculty staff. Ask questions such as: Who will be teaching the programme? Tenured faculty or adjunct faculty? Does the institution you are considering have a sound reputation? Who will your fellow classmates be (in business school you learn a great deal from the experiences of others in your programme)?