MBA Still Worth It? Absolutely, Say Alums

GMAC said that MBA alumni most likely to have met or exceeded their ROI expectations were senior- or executive-level alumni who graduated prior to 2007 (their ROI percentages were generally above 80 percent). The average ROI for alumni whose expectations were exceeded was 172 percent. Regardless of graduation year, the average ROI of alumni who reported that their ROI expectations had not been met recouped an average return on investment of 23 percent, 10 percent lower than the average ROI for alumni who graduated in 2011.

The GMAC survey also found that the wage gap between men and women is noticeably smaller among alumni from MBA and other graduate management programs than it is among the general U.S. population. For example, female graduates of full-time MBA programs who responded to the survey received starting salaries equivalent to 85 percent of the earnings their male counterparts drew, on average. By contrast, women earn just 77 cents for every dollar earned by men when the entire U.S. workforce is taken into account, according to the U.S. Census Bureau.

Men and women in the key 28- to 34-year-old age group—key because they constitute more than half the class of 2011 alumni—reported earning nearly equal salaries that bore no statistical difference on comparison. Men in this age group who graduated in 2011 earned starting salaries averaging $87,000; women reported starting salaries averaging $84,133.

Women, added GMAC, appear to have closed the gender gap in earnings for some industries. In the consulting industry, women have surpassed their male 2011 classmates in terms of starting salary—earning 104 percent of men’s starting salary. In the manufacturing and technology sectors, women aged 28 to 34 earn 99 percent of the average salaries paid to men in their age group, but still lag behind men in industries such as finance and accounting, earning 84 cents on the dollar compared to men.

Other major findings from the study:

  • Four out of five alumni reported that having a graduate management degree offers greater job stability in a still weak economy.
  • Nine out of 10 alumni felt that their graduate management education prepared them for their chosen careers.
  • Alumni with a degree from a full-time MBA program, regardless of graduation year, reported a median salary of $95,000, plus an average of $18,123 in additional compensation.
  • Part-time MBA alumni reported a median salary of $91,000, plus an average additional compensation of $15,000; executive MBA alumni earned a median starting salary of $125,000, plus an average additional compensation of $28,445.

Among Class of 2011 MBAs who found their first job after graduation, U.S. and Central Asian citizens had the highest employment rate (89%) compared to their regional counterparts from the Asia- Pacific region with an employment rate of 83 percent, followed by those from Latin America (81%), Europe (81%), the Middle East and Africa (78%), and Canada (71%), which had the lowest rate of initial employment post-graduation among the class of 2011.

Two-thirds (66%) of the class of 2011 who were employed found jobs in their intended industry, while the remaining alumni found employment outside of the industry they originally planned to pursue. Seven in 10 (70%) survey respondents who found jobs in the finance and accounting sector reported that this was their desired industry when they enrolled in their graduate management program.

On the other hand, the health care and pharmaceutical industry employed the greatest number of alumni (40%) who indicated this was not their intended industry when they started their degree program.  The two leading reasons that influenced their decision to explore the health care field were meeting with employers or recruiters (53%) and increased job opportunities (43%).

Participation in internships or work projects played a key role in determining starting salaries, according to GMAC. Alumni who obtained a job through an internship or work project had a higher average starting salary ($86,291) than alumni who found their first job after graduation ($72,000). This adds further evidence supporting the important role that internships or work projects play in a graduate business curriculum—they increase the probability of landing an initial job after graduation and yield financial dividends as well.

Based on what they know today, 97 percent of all employed alumni surveyed from 2000 to 2011 said they still would have chosen to pursue a graduate management degree, the GMAC report found. Only 85 percent of unemployed alumni would have followed the same educational path. Ninety-six (96%) percent of alumni with jobs indicated their degree was a good-to-outstanding value compared to 80 percent of alumni who were not working. In retrospect, alumni who graduated from an executive MBA program rated their decision to pursue their MBA the most favorably (98%), followed by full-time MBA alumni (95%), and part-time MBA alumni (95%). Alumni of full-time and executive MBA programs also were more likely to view their degrees as a good-to-outstanding value (96% and 97%, respectively) than graduates of any other degree type.

Men (34%) generally were more likely to assess the value of their education as outstanding; a rate almost twice as high as women (19%), GMAC said.