MBA Still Worth It? Absolutely, Say Alums

The most frequently asked question by anyone considering an MBA degree is simple enough: “Is the MBA still worth the time and the expense?”

A new study out today (Jan. 12) from the Graduate Management Admission Council has a conclusive answer to that question: Absolutely, yes!

The 2012 Alumni Perspectives Survey, which is based on opinion polls of 4,135 MBA alumni, including 963 members of the Class of 2011, found that three out of four alumni of the class of 2011 with jobs report they could not have obtained their job without their graduate management education. GMAC said this finding has remained relatively consistent over the last seven years and far exceeds the percentage of alumni who responded similarly during the recession of 2001–2003.

The vast majority (93%) of class of 2011 alumni indicated the job they took after graduation was exactly what they were looking for. Interestingly, when comparing responses from different age groups, individuals ages 28 to 34—the traditional MBA age group—were more likely than their younger and older cohorts to consider their graduate education degree essential to finding a job, GMAC reported.

Meantime, four out of five graduates (82%) in the Class of 2011 said their salary met or exceeded their expectations.

The highly positive results, moreover, come from a wide swath of business schools—not merely the top ranked institutions whose graduates receive the highest reported compensation directly out of school and are the most likely to be satisfied with their MBA experience.

“Anyone considering a graduate management degree should do a thorough economic analysis, including an evaluation of the potential return on their investment,” said Dave Wilson, president and CEO of GMAC, which administers the GMAT exam, in a statement. “These results demonstrate that a graduate management degree is, in fact, a solid investment in your future, both in good and bad economic times.”

Not everything in the report was upbeat, however. GMAC found, for example, that the employment rate for responding MBA alums actually slipped two percentage points to 86% from 88% a year earlier. That’s in all likelihood a statistical glitch with the sample because almost all business schools reported substantially higher placement rates for the Class of 2011 than they did for either the Class of 2010 or 2009. Nonetheless, it’s sobering to think that 14% of the latest graduating class responding to this report are unemployed.

Even so, alumni reported what GMAC termed a “stellar” return on investment (ROI), with graduates recouping one-third of the financial investment in their degree within the first year after graduation, and 100 percent four years out. After 10 years post-graduation, alumni reported that they nearly doubled their return on investment.


Source: Graduate Management Admission Council

These ROI numbers are even more pronounced for full-time MBA alumni than they are for graduates of other program types, as full-time MBAs reported recouping an average of 91 percent of their investment compared to 77 percent reported by executive MBA alumni and 73 percent reported by part-time alumni across all graduating years (2000–2011). When asked whether their ROI met or exceeded their expectations, full-time MBA alumni not surprisingly were more likely to respond in the affirmative than alumni of other program types, having recouped the most for their graduate management education investment.

  • John Ten

    I’m making $110,000 right now (underpaid to be honest) and I still think of going to top 25 B-school in the US. As I’m typing this, I’m taking a break studying and cramming for my GRE. I just turned 41; I am a manager of engineering team who all makes 6 figures in a Fortune 100 company for almost 2 years. I was motivated recently because of the crap I’m taking from sr. management. I know in order to move up or move out and into other companies with lateral freedom, I need an MBA — I need leverage in order to hit the $150k and $200k range in later executive position. I got undergrad Bachelors in Computer Science and minor in EE/Math from Texas Tech University but moved to California 16 years ago.

    But I have a side business that I might be able to launch and scrap the MBA. That if it does go well, supposedly makes $300k to $400k on average per year, doing something you love and could grow. But having a corporate income is a high yield, low risk endeavor – not bad choices to have. I came from below poverty family, my life has already been full of miracles so being a millionaires through entrepreneurship is not out of the question. Corporate job is just a stepping stone.

  • Experienced Petroleum Engineer

    University of Oklahoma has an Executive Energy MBA. this is a True Energy MBA as it teaches all classes from high profile teachers who have real world experience and are currently working or have worked in the past (some teachers are VP’s at Oil & Gas companies or in senior strategy roles). It is a True Energy MBA as unlike some programs which advertise Energy MBA Concentration and have all classes on general MBA with couple of classes thrown in as part of Energy, The University of Oklahoma Energy MBA actually teaches all classes in the context of energy (All the way from basic accounting to organizational behavior). The program is about 70% Oil and Gas and 30 % renewables, this is a perfect program for the new emerging leaders and executives to gain an edge in a competitive market where performance, knowledge and knowledge utilization is a must to survive. They have one of the largest Alumni leaders Network which new grads can leverage.

  • Ken

    I am still a little befuddled by what seems to be a certain amount of bickering and over-analysis here on the board. Each one of us here have a certain expectation we have in acquiring certain sets of skills and knowledge through our MBA education, but none seem to tackle the issue of how you apply those skills in our own real world scenarios.

    I am expecting to be attending one of the well referenced school in southern california next year and in the process of choosing whether or not I attend, I’ve encountered many a issue of program administrators not providing the essence of what you actually learn. Of course, why spoil the beans when there are teasers available for building more profit for these schools, right? At 85K USD tuition cost, the ROI would have to take close to 30K each year on top of all my living expenses and an annual trips to Somewherebeach, Baja. That would mean a salary of a good 100K for three years. In an environment where I am in, only a handful of sales professionals and managements are able to take that sort of a salary and not get any setbacks from other employees who are earning anywhere between 30K-60K.

    It’s a toss up to think whether all these MBA schools provide the opportunity for adding value to the overall pie of the economy. But I also do know that at work, value is added when you provide an insight or a feature of your product that makes it easier for your customer to take control of their operation or their jobs. I see the opportunity to learn as an opportunity to give back and share knowledge. Could this work for non-finance, non-management position? I don’t know. It may possibly, it very likely would take more time for the ROI to hit all the way. So at the of the day, it’s just all a perspective and I really have to apply what I can learn from these boards and visions in to my life and determine them from my own metrix, right?

  • Winnie

    Hey, what did you choose in the end? Would you mind sharing your experience as I am currently going through the same situation! Thanks a lot!

  • qwerty_ca

    Did they teach you to write properly in your ‘well reconized university’?