How much does an MBA increase your salary?
In today’s competitive job market, professionals often seek advanced education to gain a competitive edge and boost their earning potential. Among the various academic pathways on offer, pursuing a Master of Business Administration (MBA) is frequently seen as a strategic move towards achieving higher career goals.
Here, we’ll explore the average salary increase for MBA graduates, whether an MBA provides a good return on investment, and industry-specific trends.
The MBA advantage
Business schools, universities, and higher education institutions worldwide offer MBA programmes that cater to a diverse range of students – from those with substantial work experience to recent Bachelors degree graduates.
Employers recognise that MBA students possess a unique and invaluable skill set that combines business acumen, leadership capabilities and strategic thinking. Before enrolling, it’s worth asking how much the advanced degree will translate into a tangible salary increase.
Post MBA-salary and the average salary increase
One of the key metrics used to measure the success of an MBA programme is the average salary increase experienced by its graduates. According to a survey carried out by the Graduate Management Admission Council (GMAC), the organisation responsible for the GMAT (Graduate Management Admission Test), MBA graduates witness a significant bump in their salaries post-graduation.
In the UK, Glassdoor notes that the average MBA salary is around £47,000, though it can range from a base salary of £35,000 right up to £61,000.
The post-MBA starting salary is a crucial indicator of the programme’s impact on earning potential. This figure often reflects not only the investment in education, but also the enhanced value employers place on MBA holders.
The exact annual salary increase an individual can expect depends on their pre-MBA work experience and their chosen industry.
The higher education return on investment
When deciding whether to commit to an MBA, the cost of the programme should be weighed against the potential financial rewards. The return on investment (ROI) is a key factor in this decision-making process.
ROI in the context of an MBA programme refers to the financial gain achieved through higher salaries and better job opportunities upon completion, compared to the initial investment in tuition and other associated costs that come with further study.
While the cost of MBA programmes vary between institutions, the programme delivery can also impact how much it costs to study. On-campus programmes will likely be more expensive than distance learning programmes due to the costs associated with commuting. Degrees taught part-time may take longer and be more of a long-term time commitment, but the reduced schedule compared to full-time MBA study enables working and earning an income at the same time.
Industries with the highest earning potential post-MBA
The job market is dynamic, and MBA holders can leverage their versatile skill sets to explore diverse career paths. The demand for professionals with a Masters degree in business administration cuts across industries because corporate recruiters value the academic and transferable skills that MBA grads can bring to the table.
Lucrative job opportunities and higher salaries for individuals with an MBA can be found across a variety of sectors. Some industries where they may be available include:
- Consulting – consulting salaries keep rising, and these roles are very much in-demand.
- Finance – finance managers and investment bankers are two of the possible high-paying roles MBA graduates could aim for within financial services.
- Technology – one of the fastest growing sectors which shows no sign of slowing down, this is a future-proof industry where those at the forefront of innovation can be financially rewarded.
- Energy – individuals with an understanding of how politics, money, and the environment interact, and those with specialised knowledge in sustainability, are in high-demand.
- Consumer packaged goods – this industry has seen consistent growth and resilience against economic hardship, making it a buoyant sector to progress in.
Specialised MBA programmes
In addition to traditional executive MBA programmes, there are also specialised courses that are tailored to career goals in specific sectors.
There is a wide range of specialist MBA courses and the course content may vary by institution, so if you have a certain career path in mind, it’s important to look for the programme most suited to your needs.
Entrepreneurship and start-up success
The MBA advantage extends beyond climbing the corporate ladder. Many entrepreneurs and start-up founders hold MBA degrees, utilising their business acumen to navigate the complex landscape of launching and managing a successful business.
An MBA degree can give you a full view of what it takes to run a business, covering essentials such as business strategy, finance, human resources and marketing. This knowledge can help business founders, who often have to wear many hats during the early days of establishing a new company. And, along with the entrepreneurial spirit instilled during an MBA programme, it can be used throughout the life cycle of a startup to improve its chances of success.
Increase your earning potential with an MBA
Pursuing an MBA can lead to a substantial increase in salary for graduates. The post-MBA salary increase, return on investment, and industry trends showcase the tangible benefits of investing in a Masters degree in business administration.
As the job market continues to evolve, an MBA remains a valuable asset for working professionals and recent graduates. Whether you aspire to progress in your current industry, switch to a new industry or start your own business, the comprehensive skill set acquired through an MBA programme can open doors to high salaries and fulfilling career opportunities.
The University of York offers two online MBAs which will equip you for roles with a higher average starting salary – the Master of Business Administration (MBA) which will prime you for success in the private sector, and the MBA Public Sector Management for those with leadership ambitions at nonprofits. These part-time MBAs allow you to study flexibly, fitting your degree around current commitments. Taught entirely online, you will connect with peers across the world and grow your global network as you study.