While many students undertake an MBA program to increase their job prospects and to gain invaluable skills ready for the workplace, there are a great many also that do so with the knowledge that an MBA will give them the best possible chance of earning far greater salaries than those without college education or even with an associate’s or bachelor’s degree.
On average, MBA graduates are likely to earn around 50 percent more than they did before gaining their qualification, proving that undertaking an MBA delivers great return on investment of time and money for those students who are capable of succeeding in this popular degree.
In addition, there are other aspects that could be important in determining the actual salary that an MBA graduate can earn. For example, MBA graduates can expect a higher starting salary for positions with applicants of their caliber and the brand of their MBA school could also be a factor in securing a greater level of remuneration as well as the role they held prior to gaining their MBA, where in the country they are looking to work and the industry they are looking to work in.
As a general rule, management graduates and post graduate applicants are usually preferred for high level positions, as they are most able to demonstrate experience in dealing with a wide range of challenges and therefore their contribution to the overall profitability of small, medium-sized and large companies by taking the right financial and strategic decisions. As these graduates possess high levels of organizational and leadership skills, as well as strong team-building skills, the demand for MBA graduates is high in most all sectors of business.
All areas that are strong on management principles are seeking out top quality MBA graduates. Sectors including financial services, industry, engineering, health care and hospitality are where MBA graduates are able to find employment.
Average MBA starting salary can depend on the school where you studied your degree, as well as other factors already discussed above. Salary level and position gained can also depend on how well you can practically implement the concepts learned in your books and how well those concepts were taught – schools with tutors with industry experience are obviously going to be able to impart ‘real world knowledge’ in a more practical way than those with a pure academic background for example. An important factor which could determine an MBA graduate’s salary is the location of the job. Jobs situated in Europe or an Asian country, particularly those jobs located in large developed cities would recognize a higher salary than those positions in more remote areas. Likewise, the size and business of the organization could have a bearing on the salary offer.
At present, the average starting salary for MBA graduates can be as high as $110,000 to $130,000 per year for those graduating from top ranked institutions, while MBA graduates from other schools can earn in the range of $75,000 to $90,000 per year. Starting salaries for MBA students, as with all applicants to all roles, will obviously also depend upon the growth of the economy of a country. During times of economic recession, salaries across all sectors are invariably affected.
MBA graduates who find work within government roles can also expect salaries in the range of $50,000 to $75,000 per year, while those working in health care can expect upwards of $100,000 per year, due to the increased need for healthcare provision and the subsequent need for improved management in this sector around the world.
For MBA graduates with over seven years’ experience in the workplace, they can realize upwards of $150,000 per year, while those with more than 10 years’ experience, salaries can be in the range of $200,000 and above.
According to the salary website Payscale.com, MBA graduates can expect to earn an average of $50,000 in their first year of employment after graduating. With time on the job, this expectation increases. This is an indicative look at the type of increase that could reasonably be expected by MBA graduates as they progress in employment:
The actual location of the company has proven to contribute towards the level of salary an MBA graduate can expect to earn; making the question of relocation something that many need to consider in order to fully recognize their earning potential. Across the US there has been a range of average salaries evident, based on the economy of a city or state, along with the economic growth and stability of that particular business, as well as the cost of living locally. Here are some average MBA graduate salaries based on state:
Average MBA Salaries Based on City:
Senior Financial Analyst
$60,200 - $98,940
$45,104 - $90,359
Chief Financial Officer (CFO)
$76,048 - $212,666
$48,777 - $112,058
Project Manager, Information Technology (IT)
$62,327 - $126,547
$45,186 - $114,986
$64,395 - $118,489
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Further MBA reading:
- Rachel S, BSBA, SBBCollege Graduate 2013