Call it a caffeine kick. Before Paola Bellis had completed her masters in management (MiM) at Politecnico di Milano she had secured a job with her dream employer, upmarket Italian coffee roasters Illycaffè, thanks to an internship that was a requirement of the course.
Not only did it mean she could return to work in her home town of Trieste, where Illycaffè was founded in 1933, but three years and two promotions later, Bellis’s salary has jumped by 60 per cent to a high five-figure sum. “I have nothing to complain about,” says the 26-year-old, who earns more than most of her university peers.
The minority of students who worked before their MiM will increase their pay by an average of $30,000 a year after completing their degree. This matches the absolute rise a typical MBA student enjoys in the same period (starting from a higher salary), according to data from former students compiled by the Graduate Management Admission Council (GMAC), the body that administers the GMAT business school entrance exam.
An MiM student will be able to recoup the tuition fees and living expenses incurred during their education with that first year’s pay packet, according to GMAC’s calculations. A graduate of a typical two-year MBA course, by contrast, would take three and a half years to recover their study costs, GMAC says.
While raising their salary is important for MiM students, for many the true value of the degree is being able to aspire to secure well-paid jobs so soon out of formal education. Unlike MBA students, who have usually worked for a few years before applying to business school, most MiM students arrive on campus fresh from undergraduate studies. This means MiM students are less concerned about getting a highly paid job than finding a position in the first place, says Gregg Schoenfeld, GMAC research director.
“Having that masters degree on your curriculum vitae gives you an edge to get the interview,” Schoenfeld says, adding that many companies will only consider business school graduates for the types of roles MiM students are seeking.
Their time climbing the career ladder before business school means MBA graduates usually have higher salaries to start with. This allows them to demand higher absolute salary levels than MiM students on graduation. For example, an MBA graduate taking an entry-level position will earn an average of $85,870, compared with $51,125 for someone with an MiM, according to GMAC.
One of the reasons Bar Schwartz appreciates her MiM from Berlin’s ESMT business school is the pay rise she has received since graduating last year. The Israeli-born former software engineer now earns 30 per cent more as a senior consultant at McKinsey than she was paid as a programmer at mapping data business Here. But looking at salary rises alone misses the point, according to Schwartz, who says she might have doubled her pay during the same period if she had stuck to writing code for companies in Berlin’s fast-growing tech start-up sector.
“I could have got more in salary because of the type of person I am, an overachiever, but I would have been much less happy,” she says. “As an engineer, I was always trying to do more in the business area, but I lacked the skills to progress. So I chose the masters in management degree to open doors.”
Christopher Hopper is a rare example of someone who took an MBA fresh from the graduation ceremony for his masters in engineering at Imperial College London, rather than gaining a few years’ experience in a full-time job. He secured a place on one of the most competitive MBA courses in the world, at Stanford Graduate School of Business in the heart of Silicon Valley.
Unlike most of his classmates, Hopper embraced the local tech start-up culture after graduating, launching Aurora Solar, an online sales management system for solar panel installers. As a result, he pays himself a salary. The amount, he admits, is less than half the then $110,000 tuition costs of his two-year MBA.
“If you are an entrepreneur, salary is only one consideration when choosing a job,” Hopper says. “I was more concerned about the intangible benefits of the MBA, such as the great network of people I now have. If I had wanted to get a better salary I would have stopped with my engineering degree.”
Paola Bellis says she is happy with her pay at Illycaffè but adds that the money is not as important as doing a job she enjoys in a company she likes, with good promotion prospects.
“I have friends who have a salary that is higher than me, but they have jobs in consultancies, which is not what I want to do right now,” she says.
Bellis predicts there will be a day when a higher salary will become more important, at which point she plans to return to business school to do an MBA. But even then, she says, the main point would be to increase her skills as a leader and gain a broader understanding of business as much as securing a higher salary.
“My biggest concern is not money but getting stuck in certain patterns of behaviour that are outdated,” she says.