When it comes to success in the business world, earning an MBA is often seen as the ticket forward. However, earning this graduate degree requires a significant investment. This degree can easily cost between $50,000 and $100,000, which can be particularly overwhelming for those still working to pay off prior student debt.
To prepare to make this investment, students need to make sure they know exactly what this degree can do for them. Fully understanding the ROI of an MBA can help position students to make the best decision possible for their education and the future of their careers.
Calculating the ROI of an MBA: Exploring the numbers
As you begin to explore the benefits and investment requirements of an MBA, it can be helpful to look at the average outcomes of other students who have completed the degree.
US News & World Report surveyed graduates of 132 different programs and found that the average salary and bonus paid to 2020 graduates after finishing their full-time program was $101,034. For those who went through more selective programs, that number reached even higher. A quick look at the 10 schools with the highest average earnings shows their graduates average $172,265 a year.
For an additional perspective on the financial benefits of the degree, a survey from Bloomberg Businessweek found that those who left jobs with salaries around $50,000 to pursue their degree full-time saw an 80 percent increase in their salaries after graduating.
In addition, US News & World Report found that the salary and financial outcome of students following their MBA also depended on the industries they entered. The top-paying fields for those with MBA degrees were:
- Consulting
- Financial services
- Technology
- Retail
- Real estate
- Health care (which includes products and services)
- Media and entertainment
- Energy
The average student finishing an MBA also was able to find a job relatively quickly, with 85.2 percent of them getting hired within 3 months of graduation.
Examine your projected debt-to-cost ratio
To calculate your ROI, you also want to look at your debt-to-cost ratio closely. The debt-to-cost ratio explores the relationship between your typical starting salary and the amount of debt you will have to take on to earn the degree. Consider every factor conceivable, such as industry and region, to better understand your likely starting salary. The article from US News & World Report, which breaks down starting salaries based on popular industries, can be a great place to start. Then use the cost of the degree at your desired school to begin calculating your ratio.
Boosting Your ROI
Now that you know your starting debt-to-cost ratio, you can determine what strategies will help increase your ROI from earning an MBA. Here are a variety of strategies you can use to set yourself up for success.
Know your goals before you get started
Before you begin applying to different MBA programs, you should know your desired goals and how the degree will help advance your career. Knowing your goals will help you determine which program fits your current needs and has the curriculum to assist in you achieving these future goals.
Given the differences in earning potential based on industry, taking the time to determine the benefits of the degree before you even apply will also help you see where the MBA can take you specifically, which is the first step to understanding the ROI you can earn from this degree program.
Consider signing bonuses and advancement opportunities you can earn
In addition to looking at initial salary rates, you may also want to consider the potential signing bonuses and advancement opportunities that you will be in a position to earn. Signing bonuses make starting salaries even more appealing and can help you to pay off the debt from the degree program faster.
Moreover, future advancement opportunities can position you for an additional salary increase, as your training will help improve your leadership and management skills. Factor in the average trajectory within your chosen field to your ROI calculations by looking at your salary goals after 3, 5, and 10 years.
Reflect on the education and soft skills you gain during the program
During your program, you will also have the chance to nurture important soft skills that will benefit you in the workplace. You will learn more about team building, leadership, and management, which can help you take on important roles within any business. As many as 92 percent of respondents to a LinkedIn survey reported that soft skills were more important than technical skills in the workplace. An MBA degree, which helps to broadcast the training you have had in your soft skills, is a great way to make yourself more appealing to employers across industries. In addition to your soft skills, you will also find that the training and skills you gain during your degree will offer you an incredible amount of self-confidence and a better understanding of the business world. You will feel prepared to tackle the challenges that come and this will be reflected in how you manage yourself professionally, further boosting your career and reputation.
Put your network of professors and your school’s career resources to work
During your degree period, you will learn from some of the best business minds that your school has to offer. They will help you better understand how to thrive in the business world and the latest techniques and strategies for managing an organization. During your program, you are well-positioned to tap into this remarkable network and gain mentors who can help you find your path forward. A valuable mentor can help you build connections that lead to jobs, troubleshoot problems that arise, and offer advice about how to move forward successfully.
Your school will also likely have a variety of career resources available to you as a student. Rather than trying to navigate your career search single-handedly, use this time to uncover resources that can help you make the most of your training and degree.
Consider ways you can minimize your costs associated with the MBA
When calculating the ROI from your MBA, consider strategies that you can use to minimize your costs associated with the degree. For example, pursuing scholarships, finding a job that will help pay for a portion of your schooling, or pursuing an online MBA program can all make it easier for you to afford this prestigious degree.
The Final Decision Is Yours
As you balance all of these competing factors during your decision-making process for your MBA, remember that the final decision lies with you. You need to look carefully at your own strengths, areas that challenge you, and anticipated career trajectory to better understand the value that an MBA can offer you and how you can put these opportunities to good use. Finding ways to boost your ROI and ensure that the time and money you put towards this degree will benefit you will help you make the best possible decision for yourself professionally.
If you are interested in learning more about MBA programs and how they can help you professionally, learn more about our online MBA from Abilene Christian University. See if earning a rigorous master’s in business administration from our online school can help you launch your career to the next level and build a strong return on your investment.