For many that amount doesn’t mean much. For freshly minted MBAs, it should mean more. $54.06 is the average hourly wage a recently graduated MBA makes, according to a new study of pay by TransparentMBA.
The startup, founded by Chicago Booth School of Business students, is the Glassdoor for MBAs, tracking pay and lifestyle trends of MBA interns and graduates. The hourly wage data, based on reports from more than 700 MBAs at more than 80 schools across the world, tracks compensation of graduates in roles fewer than two positions after their MBA.
While $54.06 serves as a baseline, it doesn’t scratch the surface of the story. For instance, of the employers with more than 10 MBAs to report compensation amounts, none pays more per hour than Microsoft. Despite a relatively low total compensation average of $158,463, the 19 Microsoft MBAs to report data also reported working a not-too-demanding average of 45 hours a week, making the hourly rate come out to a $67.72 average. Next up was Bain & Company, where recently graduated MBAs can expect to make about $62.19 per hour. Meanwhile, at Google MBAs pulled down $61.33 per hour.
Near the bottom for companies with sufficient data points, according to TransparentMBA, are Amazon, McKinsey, and Bank of America Merrill Lynch, where MBAs make $45.15, $45.45, and $48.14, respectively. Interestingly, eight newly graduated MBAs at Fidelity Investments reported a total compensation average of $230,950 at 52 hours a week for a whopping $85.96 an hour average. Arguably more intriguing, at the bottom was five MBAs at Apple who reported making an average of $137,000 but worked 70 hours a week for an effective hourly wage of just $37.64.
PRIVATE EQUITY, VENTURE CAPITAL ARE MOST LUCRATIVE INDUSTRIES FOR RECENTLY GRADUATED MBAs
Job function-wise, nothing is as lucrative as private equity. Recently graduated MBAs can expect to make a remarkable $85.98 an hour in the field. Working just 50 hours a week and making upward of $223,000 makes it an attractive, albeit elusive, job function. “A lot of MBAs are trying to break into it and you pretty much have to have an investment banking or private equity background if you want to come into private equity,” explains Kevin Marvinac, TransparentMBA co-founder and chief operating officer.
Not surprisingly, another increasingly attractive and lucrative job function for MBAs is venture capital. Also averaging just 50 hours a week, MBAs in venture capital are making $70.14 an hour, the TransparentMBA data reveals. Up next is investment management, where MBAs take in $70.05 an hour while working 58 hours a week. Marvinac believes venture capital is increasing in popularity because of the potential upside and the relatively light workloads of 45 hours a week for associates — the most common position for newbie MBAs. Toward the cellar are MBAs heading into human resources, where $37.80 an hour is the typical wage. Project managers and MBAs who land jobs in information technology don’t fare much better at $40.45 and $42.35 an hour, respectively.
In terms of total compensation, private equity again tops the list with an average of $223,538. Investment management is not far off, where recently graduated MBAs report an average of $209,447. “The compensation in some areas are pretty astronomical,” Marvinac points out, noting MBAs heading into investment management and hedge fund management.
INVESTMENT BANKING: ‘GREAT COMPENSATION PACKAGES, BUT A TON OF HOURS’
Of course, MBAs headed into i-banking have little cause for worry. Freshly minted investment bankers make more than $195,000 on average. As Poets&Quants previously reported, they also work two traditional work weeks in one. Indeed, the nearly $200,000 doesn’t seem as attractive considering investment bankers report working an average of 79 hours a week — far more than any other industry. In fact, the next most worked industry is human resources, with an average of 16 hours a week less at 63 total hours.
“The data obviously shows what most people think and assume, which is that investment bankers coming out of MBA programs work a ton of hours,” says Marvinac, noting the tendency to use investment banking as a stepping stone to another position or career. “Great compensation packages, but a ton of hours,” he adds.