His Post-MBA Salary Plunged 99%

Financial TimesLate last year, The Financial Times contacted me to complete their annual MBA survey, which came out at the end of January. The self-reported alumni data constitute a large percentage of a school’s overall score. I couldn’t submit my salary data though. I feared my answers would harm my top-ranked school, IE Business School.

I’m an anomaly I suppose. As I’ve gotten older I’ve earned less money. My post-MBA salary was a decrease of 50 percent as a result of going from the lucrative oil industry to the fledgling renewable energy industry. Then I gave that up to volunteer my way around the world in search of happiness and inspiration to start my own non-profit organization. I made $900 in 2012, a decline of over 99 percent from my pre-MBA salary.

The FT states in its 2013 ranking methodology that graduates working in the non-profit sector as well as full-time teachers are excluded from the tabulation. I presume it’s too difficult to measure these sectors and because the earning potential there is less. Or maybe the FT just doesn’t value work in these sectors as highly as it does for investment bankers, hedge fund analysts, or management consultants?

There was much talk after the dawn of the crisis whether the MBA is dead, whether this degree was just a license to perpetuate the worst of human greed. I can’t speak for other schools, but IE actively promotes social business and CSR in its curriculum and in an annual forum. It also admits many students it knows aren’t going to go off and pursue financially lucrative careers. My cohort is full of people working in the non-profit world (like the World Wildlife Fund), for-profit social enterprises that believe in shared stakeholder prosperity (like Emzingo Group), and I’m volunteering my way around the world on The Happy Nomad Tour. We are either not included at all in the FT’s antiquated ranking system, or we are and do harm to our school.

An MBA has evolved past being a corporate feeder program into finance and consulting jobs. It has been venturing into unchartered, but world-changing areas like CSR, renewable energy, entrepreneurship, social business, sustainability, and more for quite some time now.

Governments often can’t meet the needs of its people. More and more pressure is being put on social businesses and the non-profit world to fill the gaps and come up with innovative solutions. If there must be a system to rank business schools, shouldn’t the graduates’ accomplishments be more important than their increase in salary? Shouldn’t schools be rewarded in the rankings for admitting the next Jonas Salk instead of being penalized for it? Wouldn’t giving even a paltry 2 percent of the score to a category like “percentage of students who pursue non-profit careers” or “percentage of students who start their own company” be more representative of today’s reality?

The rankings methodology allots 2 percent for the percentage of female faculty, 2 percent for percentage of female students, and 1 percent for the percentage of females on the school advisory board. This 5 percent for gender diversity and the 20 percent for international diversity show the FT’s commitment to a diverse classroom. Now is the time to extend that diversity further.

One thing the financial crisis has taught us is that incentives can be dangerous. The embedded incentives in the FT’s ranking system discourage schools from admitting entrepreneurs and as well as career-changers to less lucrative fields. Older students should be avoided since their post-MBA earning potential is less than that of their younger counterparts. Dedicating 40 percent of a school’s score to purely financial considerations seems to make a mockery of the fact that many students pursue an MBA as an avenue to higher education. Some even use that education to try and make the world a better place. It’s time to reward the schools that admit these do-gooders, who now do so to the detriment of their ranking.

Adam Pervez graduated with an MBA from IE Business School in 2009. Fed up with the corporate world, he set off on what he calls “The Happy Nomad Tour” to pursue a life incorporating his passions of traveling, writing, learning/teaching, helping others, and telling stories.

DON’T MISS: THE FINANCIAL TIMES’ 2013 MBA RANKING

  • chav

    LOL^^^^

  • Nick

    To the “can’t fool me”…As a current IE student, I can say this “there are some students who will get a 200% increase in salary and others who will get a decrease. Which kind of student are you? Even Harvard won’t help if you choose a certain career path. Is this article posted just to sensationalize and get readers. I already have a Master’s from a US school and IE’s MBA is far more grilling. What you do with it is up to you? Look at your classmates….

  • VaneRV

    Such a brilliant approach. Great insight. Greetings from Paraguay.

  • I wasn’t jobless. I worked at Siemens Wind Power in Denmark… http://www.happinessplunge.com/2011/07/goodbye-denmark/

  • Juan

    I researched a few years ago IE’s career report. Guess what, among top recruiters with 3 plus hires of the class is IE itself. Hence IE hires its MBA, count them as employed and boost ranking.

  • Cannot fool me

    I’ve heard quite a lot of stories about jobless IE MBA graduates. How can a school with so many jobless graduates be in the top 5 of international programs? Shouldn’t “finding a great post MBA job” be counting for at least 75% of the score in the rankings? I wonder if IE MBA graduates are proud to have been to a top 5 school, yet are jobless. There is something extremely fishy with these rankings…

  • Tunde

    The FT is not the only ranking with 40% attributed to post MBA earnings. The Economist also puts heavy emphasis on earnings and Forbes has the Return on Investment formula. I guess it is very tempting to measure salary as it is a hard data point opposed to ‘MBA helps personal development’. Kudos to IE for enabling CSR and social business themes through syllabus and events. Your concern that BSchools may be tempted to play the ranking game in admission/focusing only on career pipeline by avoiding older career changer to low income jobs or internationals with placement problems can be seen at Columbia and Emory.