Is an MBA your ticket to a higher salary? Earning the degree can expand your career opportunities and increase your future income. However, before you start dreaming about that annual seven-figure income, let's take closer look at the facts.
A Master's of Business Administration (MBA) program usually requires two years of study beyond an undergraduate degree; the curriculum includes courses in finance, marketing, accounting and management, as well as coursework in computer science, database administration and related technologies. The number of MBA degrees awarded annually has grown from around 5,000 in the 1960s to more than 150,000 currently. Costs can range from $30,000 at a regional school to more than $100,000 at a more prestigious school.
Yet, even in an economic downtown, companies value the skills that an MBA degree brings to the table. Some employers say they plan to pay those they hire with an MBA degree nearly twice as much as those with only an undergraduate education [source: GMAC]. If that wasn't enough, more manufacturing and health care companies are now seeking out MBAs -- although industries like banking and consulting have typically recruited the most MBA students.
According to the Graduate Management Admission Council (GMAC), salaries for MBAs vary according to the industry where they're employed. The median salaries of MBA graduates are as follows:
- Consulting -- $105,000
- Energy/utilities -- $97,770
- Finance/accounting -- $95,000
- Health care -- $95,973
- Technology -- $95,000
- Manufacturing -- $91,560
- Products/services -- $88,518
- Nonprofit/government -- $70,000
The potential for growth varies within industries, as well: Positions in consulting, finance, accounting and health care offer the greatest potential upside. Median salaries increase as careers move from entry level to the executive suite. Total compensation may climb even higher, especially when bonuses and stock options come into play [source: GMAC].
Before you start filling out applications, keep in mind that these starting salaries are only guidelines. Individual salaries vary depending on a number of different factors, including your school's reputation, geographic location, regional cost of living, prior work experience and undergraduate degree [source: MyMBACareer]. The potential for growth varies within industries as well: Positions in finance and consulting may have more upside in the long run than positions in health care or manufacturing, especially when you factor in perks like bonuses and stock options.
An MBA degree is an impressive credential to put on a resume, but even in this rarefied world, some MBAs are better than others. Who are the crème de la crème? Find out on the next page.