An MBA is still a great boost for salaries
A top MBA is a significant investment. The programme for Stanford Graduate School of Business costs more than $145,000 in tuition fees. Students tell us that the main reason they study for an MBA qualification is to increase their salary. Personal development, interpersonal skills and ethics matter to them, but students still expect a return on investment.
MBA students had a tougher ride after the financial crisis of 2008. Between 2008 and 2014, the average salary of MBA graduates three years after they left business school increased by just 4 per cent to $127,000. At the same time, the average cost of two-year MBAs increased by 44 per cent to $104,000.
Salaries have since picked up to reach an average of $142,000 in 2017, up 12 per cent on 2014, and early data analysis from the 2018 ranking indicate that salaries are still increasing. Average alumni salaries have increased year on year for about three-quarters of schools.
The record for the highest salary increase, set by Chicago Booth’s MBA alumni
Average salaries increased by $7,000 in 2017, the largest increase in absolute terms in more than 12 years. All sectors apart from three — education, transport and logistics and law — saw average salaries increase.
The biggest year-on-year increases were in the healthcare and industrial sectors, both up 10 per cent to average about $143,000. Salaries in these two sectors are down in 2018.
If the latest trend continues, the overall average salary should be near to $150,000 in 2018.
We also measure salary increases over pre-MBA levels. Every year up to 2014 and since we began collecting data, MBA graduates always at least doubled their salaries within three years of completing their degree.
Alumni from Chicago’s Booth School of Business hold the record for the highest salary jump since our records began: up 252 per cent in the 2002 ranking during the heyday of the dotcom boom.
But the overall average salary boost fell for the first time below 100 per cent to 93 per cent in 2015 as average pre-MBA salaries increased much faster than post-MBA salaries. That same year, alumni from Stanford Graduate School of Business had their lowest salary increase at only 80 per cent.
The global average salary increase moved back above 100 per cent again in 2017. Just over half of all ranked schools had salary increases greater than 100 per cent. In 2018, almost two-thirds of alumni cohorts more than doubled their salaries.
The FT ranking of global MBA courses will be published on January 29
Read about the contrasting fortunes of Asian and Canadian schools, the Trump effect on the ranking, the fastest-growing sectors and salaries. Also is the two-year MBA degree losing its allure?