Highest and Lowest MBA Salaries
Posted February 23, 2016 by Lee Davidson
- Senior Associate, Copywriter/Editor - AACSB International
Recently, we wrote about what happens after you earn your MBA. As a continuation of that discussion, we take a deeper look at salary earnings for recent MBAs, which are part of a Poets & Quants report that examines highest and lowest MBA salaries from 2015 graduates whose schools provided data. I’ll skip the suspense and tell you that the numbers are outrageously low and outrageously high. They range from 18,000 USD to 467,000 USD—both for graduates of “elite,” highly ranked schools. As John Byrne of P&Q succinctly puts it, “The highs and lows, of course, are all extremes.”
What Determines an MBA Salary?
If school rankings don’t determine a high salary, what does? Byrne continues: “Typically, MBAs who nail down the biggest pay packages of their class have highly desired skills, proven work experience, and successful pre-MBA track records that make a company pay up big time.” Part of what ensures that MBA graduates have these “highly desired skills” is quality standards in business programs. AACSB Accreditation is one way of knowing that your business degree is held to the highest standards in business education and in sync with the latest thinking in business practice. AACSB business programs must continually strive to stay relevant with the needs of the business world—and subsequently infuse industry-related material into their curriculum—which ultimately serves students who go on to seek employment after graduation.
Another factor that contributes an MBA salary is the industry in which the graduate enters. Some MBA graduates are passionate about nonprofit or government work, which are known to offer lower salaries than other industries, such as private and financial sectors. But again, this is not a rule: for Wharton MBA graduates last year, the median salary for “social impact” jobs was 91,000 USD, according to P&Q. So post-graduation salary should be just one consideration of many when deciding to pursue an MBA.
Does an MBA Guarantee a Higher Salary?
According to one Forbes contributor, no. Ashley Stahl lists “Ten Reasons You Don’t Need an MBA,” starting with No. 1: “You won’t make more money.” Of course, this is a very conditional statement. Stahl further rationalizes her point by saying that MBA graduates won’t earn the high salaries they might expect, and not right away. However, she also notes that the value of an MBA degree is greatly dependent on a school’s ranking, which we’ve seen isn’t necessarily true (the above-mentioned 18,000 USD salary belongs to a graduate of Stanford—which ranked No. 1 in US News last year).
Salary reports in the media are very similar to rankings in that they don’t show a very full picture. You get the highs and lows and an idea of an average, but job placement is such an individual process; one person’s experience will not be like yours. After all, you are unique, and you can offer a distinct set of skills and background to a potential employer. Your focus—throughout your MBA program and after—should be on reinforcing that point.
What Does Lead to a High MBA Salary?
There isn’t one conclusive answer to this question. Employers consider many things when making hiring and salary decisions. But having an MBA demonstrates that you have invested in a deeper knowledge of business practices, shown initiative in attaining high-level leadership abilities, and learned invaluable networking and collaboration skills. These are the things that, when put to practice in the workplace, will help you eventually advance up the ranks. Rather than viewing the MBA degree as an immediate gateway to a six-figure salary, looking instead at the long-term value in career enhancement might be a more realistic—and satisfying—perspective.
Stay tuned for the next installment of this topic, when we explore strategies for ensuring you get the most value out of your MBA.