There are three phases in any MBA decision-making process. First, you’ll evaluate the degree’s value. You’ll weigh the $200K (or more) you’ll forego in tuition and lost wages against bigger paychecks, which can go as high as $3 million dollars (or more) over a career. Then, you’ll compare programs by their networks and prestige, where the income difference between acceptance at Harvard or Notre Dame could be a million dollars or more over 20 years. But there’s still one more choice: What should I specialize in? Yes, that decision, too, could cost you $50K-$60K a year.
No pressure, right?
If you’re applying now, you’re probably fretting over whether you’ll get into your top choice or a safety school. If your GMAT score was below par, you might be wondering if you’ll be condemned to a second-tier school. Let’s face it: The best companies target the top programs. And being accepted at a celebrated school provides the coveted halo effect. It is a stamp of approval, proof that you had the academic chops and professional pedigree to join a very exclusive club.
However, not all MBA (or business master’s) degrees are created equal in employers’ eyes. Sure, your concentration may not be your destiny. Depending on your employer (and advocates), it can give you a faster start by exposing you to the right people sooner. So before you sock big money into a concentration that the market doesn’t value, ask yourself: Where can I earn the highest return over my career?
HOW PAYSCALE CALCULATES PROFESSIONAL INCOMES
That question was recently addressed by PayScale, a leading data warehousing firm that specializes in employee compensation. In October, PayScale released its “Gradate Degrees by Salary Potential” list, which revealed the early and mid-career salaries for holders of 232 fields of studies. The list included salary data for holders of advanced degrees at 166 business schools, 55 law schools, 336 non-MBA master’s schools, and 49 doctorate-granting research universities.
As with all data sets, the salary information consisted of “base annual salary or hourly wage, bonuses, profit sharing, tips, commissions, and overtime.” However, it did not take into equity or stock compensation. PayScale’s methodology also didn’t incorporate benefits like pensions or healthcare benefits into salaries.
The data is broken down by major and degree. PayScale provided salary information at “early career” (an average of zero to five years of professional experience) and mid-career (10 or more years of professional experience). In addition, the data included a “high job meaning” category, the percentage of degree holders who answered “yes” to “Does your work make the world a better place?” According to The Atlantic, 180,000 MBA degree-holders participated in PayScale’s salary listing for degrees.
“STRATEGY” TOPS AMONG MBAs
So which concentrations provide the highest return? According to PayScale, the honor goes to strategy, which ranked #1 among MBA degree types and #5 overall, probably because of the large numbers of strategy consultants at the Big Three firms which are now hiring top MBAs to start at a base of $135,000. At mid-career, MBAs specializing in strategy can expect an annual median salary of $145,000, owing to the fact that when you count up all the MBAs out there, very few of them work for McKinsey, Bain or BCG. Following closely behind was “general and strategic management” at $140,700, which ranked #7 overall. Strategy also topped the early career salary ranking at $92,200, followed by an MBA in “computer science” at $83,000.
Overall, the top income earners held a master’s degree in Petroleum Engineering, where graduates were earning a median mid-career salary of $187,600. That was followed by professionals who held a master’s in Nurse Anesthesia ($162,800), a doctorate in Computer Engineering ($150,000), and a doctorate in Electrical and Computer Engineering ($145,100). A law degree ranked #10 at $139,000.