MBA Still Worth It? Absolutely, Say Alums
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.
RETURN ON INVESTMENT BY GRADUATION YEAR
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.