The Benefits & Challenges of Getting an MBA
When it comes to advanced degrees, an MBA has historically been the closest thing to a sure bet. Those who earn their MBA typically enjoy a significant boost to their salary, even in times of economic uncertainty. The MBA also offers benefits in one’s business skill set, professional network, and career advancement. But the Covid-19 pandemic has the business world rethinking everything, including the value of traditional business schools.
Nearly half of all business schools are expecting a drop in enrollment, according to the Wall Street Journal, though only one in five expected that decrease to be more than 10 percent. As classes are migrating online during the pandemic, some students, such as those at NYU Stern, have begun to ask for some of their money back. In a world where online education increasingly offers a wide selection of non-degree options, one needs to recalculate what once was a foregone conclusion, and decide whether attending business school really is worth it.
The Covid-19 pandemic has drastically changed the way business schools are viewed and experienced. But the available data suggests that they’re still an attractive investment.
To get a detailed look at the current value of attending business school, read on.
Worth It: Increased Salary
Historically speaking, the increased salary that comes with earning an MBA has been one of the degree’s primary incentives. Even in a financial recession, MBA graduates typically enjoy a significant boost to their annual pay. But with the economy in an uncertain state due to the Covid-19 pandemic, has the math changed?
A 2019 report by the Graduate Management Admission Council (GMAC) found that more than half of US employers planned to increase starting salaries for MBA graduates. The median annual base salary US employers offered was $115,000, which was more than double the median annual base salary for new hires with only a bachelor’s degree.
A follow-up 2020 report, which included data based on the impacts of Covid-19, found that the average starting salary for an MBA graduate dipped, but only slightly, to $105,000. In the salary category, the MBA outperformed practically every other business-focused graduate degree: master in management; master of accounting; master of finance; and master of data analytics.
One’s post-MBA salary depends on a variety of factors: where one got their MBA; how much experience they’ve accrued; and which area of business they’ve chosen to focus on. But what doesn’t seem to vary, even in times of economic uncertainty, is that those who earn an MBA will outearn the majority of those who don’t.
Worth It: Valued Skills
Covid-19 has upended the business world. It’s accelerated paradigm shifts in thinking about office space, supply lines, and retail businesses. But so much remains to be solved. Is an MBA program still worth it when the business landscape is undergoing a period of massive disruption?
The foundational knowledge provided by an MBA program is relevant in practically every business climate; that’s precisely what makes it foundational. Recent research by GMAC found that even in light of the pandemic, recruiters still identified three key skills in MBA graduates: strategic thinking, communication, and versatility. Recruiters are looking for adaptable candidates who can lead with innovation through times of disruption, and MBA programs offer exactly that type of talent.
MBA programs aren’t static institutions, and neither are their curriculums. In the past, their agility in programmatic topics has guided MBA students through tech booms, stock bubbles, financial recessions, and other realignments of business thinking. The current moment is hardly different. A recent article in US News & World Report found that many MBA program directors are already beginning to incorporate the topic of Covid-19 disruption into business cases and learning modules. Getting an MBA is an opportunity to dedicatedly study the impacts of a major disruption like Covid-19, and learn to lead through it.
Worth It: Professional Networking
For MBA candidates who were set on choosing the on-campus experience, Covid-19’s push into online instruction has been seen as a serious downside. This has been most pronounced at traditionalist programs such as the University of Pennsylvania’s Wharton School, where eight out of ten MBA students said they were not excited about beginning the program this year, due to its mandatory shift to online-only instruction.
The premier perk of on-campus programs, in recent years, has been the chance to network effectively with other future business leaders. But is it still possible to benefit from the networking opportunities an MBA program provides if one attends in an online-only format?
The world’s network is increasingly digital, and online MBA students often remark upon the connections they forge with peers from a wide variety of geographic and experiential backgrounds. The Covid-19 pandemic has given virtually everyone some preliminary exposure to the power of videoconferencing, and even in more normal conditions, this is a skill that today’s business leaders need.
Furthermore, the network one accesses when attending an MBA program extends beyond one’s immediate cohort, and includes a wide network of tens of thousands of business school alumni. That connection isn’t borne out of physical proximity, but it’s a real and strong connection nonetheless.
Regardless of pandemic countermeasures, the network one gains when joining an MBA program, online or on-campus, will significantly outweigh the network one gains from not attending.
Worth It: Career Advancement
For MBA candidates, it’s not just about an increase in pay; it’s about advancing their careers, and MBA graduates are historically favored to land jobs with higher levels of responsibility. But with companies tightening their belts, is an MBA still the best way to advance one’s career prospects?
The MBA is not immune to the shocks of a global pandemic, but data suggests that employers remain confident about the importance of graduate-level talent in their organizations. A 2020 survey conducted by GMAC to assess the impact of Covid-19 on the MBA world found that 89 percent of employers still planned to hire MBA graduates in 2021, and 95 percent of respondents from Fortune 100 companies said they were either confident or highly confident in the ability of graduate business schools to prepare students to be successful in their organization.
It’s natural to worry about a large investment during an uncertain economic window, but it’s almost a certainty that today’s MBA students, who will be graduating in 2022 or 2023, will find themselves exiting into a recovered economy. Those who earn their MBA now will be better prepared to take advantage of the upturn than those who lack advanced degrees.
The Bottom Line: Is Attending Business School Worth It?
By practically every available metric, business school represents a significant and objective return on investment. But you also go to business school for the rewards you can’t think of yet, and the decision of whether or not to get an MBA shouldn’t be a wholly quantitative one. Qualitative metrics are important, too.
Much of the value of attending business school lies in intangibles: it allows one to study concentratedly about topics that interest them; it provides space and time to fail; and it offers the ability to connect with others in creative ventures.
The question isn’t whether or not business school is worth it, the question is how much is it worth? That answer, like so many others, is ultimately up to you.