It’s all about the Ben
jaminsefits…the benefits of an MBA.
An MBA is more than a degree. It’s a sign, a billboard that says you have what it takes. It tells employers you have put in the time to learn the skills their organizations need—the knowledge that you can make key decisions, think strategically, and lead a team toward business success.
According to worldwide employment site Indeed.com,1 there are 11 reasons why an MBA is important for business.
Here are five of our favorites:
- An MBA can increase job prospects. Instead of big fish in a small pond, think big fish in a bigger pond. You’re graduating with the smarts and skills to do amazing things. When you graduate with your MBA, there’s a very good chance you’ll qualify for more and better roles.
- An MBA also allows you to venture down a new career path. Maybe you’re stuck in a career rut, or you can’t seem to break through that ceiling, glass or otherwise. An MBA can help you transition to a new career path regardless of your experience level or previous work history.
- Okay, maybe for you it is about the Benjamins. If so, an MBA can increase your earning potential. We will get more specific later, but MBA graduates typically enjoy higher salaries and can earn substantial signing bonuses.
- With all the talk of layoffs, downsizing, and budget tightening, an MBA can provide job security and help make your career future-proof. The knowledge, skills, and expertise you gain by getting an MBA can result in greater job security with your employer and within your industry.
- Last, we all want respect from our colleagues. An MBA helps garner that respect and improves your credibility. Yes, your experience and your work, day-in and day-out, sets you up for success, but an MBA and all that comes with it gives you added credibility as an expert in your field.
Let’s talk specifics. What skills does an MBA give you?
What are your goals in life and how is an MBA going to help? If you’re looking to build a career in business, an MBA gives you the skills recruiters are looking for, which are also the specific skills you need to set yourself up for success. According to MBA.com,2 the core curriculum of MBA courses typically includes:
Are there any hidden benefits to an MBA?
In addition to the specific classroom skills mentioned above and the traditional, expected benefits of an MBA, there are some surprising “emotional” benefits of an MBA. Elective courses and group projects help students work on leadership abilities and skills in a collaborative environment that fosters discussion.
According to the GMAT Club,3 graduates with an MBA can expect to leave with:
- Critical soft skills, including better habits and ways of thinking, increased influence, empathy, and confidence.
- Added value in their careers. An MBA can lead to increased credibility and marketable skills, which allow you to take more risks and really shine in your career.
- Broadened horizons. Your MBA education allows you time with classmates who have worked in many different fields. Plus, you get to “test run” your ideas through case studies and experiential learning. Time on campus is your opportunity to explore paths you may not even know exist – an opportunity that may not be available to you when you step into the “real world.”
An MBA degree can help you personally...
Think internal growth and the development of:
- Communication and networking skills. Your professional life often comes down to connections—who you know (and who they know). Networking skills you learn during your MBA can pay huge dividends down the road, helping you meet more people and build a referral base. That network of referrers can become future employers or clients that become integral to your career success.
- Leadership skills. Some people are born leaders. Others are made along the way. Your time online, on campus, and in the classroom is when leadership and entrepreneurial skills can be learned, nurtured, and refined through teaching, education, and collaboration. These are skills that will last a lifetime.
- Adaptability. How will you handle change? What will you do when something new comes your way? Studying for your MBA gives you valuable experience learning new subjects and techniques that you may not have received during your earlier education.
- Blue-sky thinking. You may not think of creativity when you hear “MBA,” but your graduate work often leans on strategic and creative thinking as a means of finding innovative business solutions in both your day-to-day work and during times of crisis. This kind of “big” thinking puts you in demand.
of graduates said an MBA helped them become more mentally resilient
Skills, hidden benefits, personal growth... anything else? Oh yes, a salary.
The skills and benefits an MBA offers will have a profound effect on your future. But you also need to pay bills. You are probably asking, “What about pay? Will an MBA increase my salary?”
If you believe the numbers (and you should), yes it will.
Whether the increase is large or small, an MBA should give your salary a boost. According to a Transparent Career study,4 MBA salaries increase from around 8% to just over 65%, depending on your industry.”.
Additionally, a recent Coursera Salary Guide5 reports that MBA graduates earn up to $50k more than those with just a bachelor’s degree. Let’s break it down by industry.
Iowa MBA graduates report an average salary increase of 31% post-graduation (around $17k), while over 57% move to a new company.
$ 50k more
MBA graduates earnings compared to those with just a bachelor’s degree
And the numbers get better (and bigger).
While there are no guarantees of financial success, a 2021 Forte Foundation study6 showed that the average salary for MBA graduates over time grew between 9% and 35%.
The average MBA salary after 5 years in the range of $142,469 (women) - $151, 951 (men), while the average MBA salary after 10 years reached $179,159 (women) - $241,607 (men) annually. Signs of steady career and financial growth that outpaces the economy.
Which MBA has the highest salary? According to bestcolleges.com,7 the “highest-paying MBA concentrations include consulting, finance, and technology. Choosing one of these concentrations can give you higher earning potential.”
So, is there a downside?
We have talked benefits, personal growth, and salary—the big three advantages of your degree.
Are there disadvantages of an MBA? There can be.
The first and most obvious is the financial obligation. An MBA is not free and you may have to pay down a substantial debt.
According to the Education Data Initiative,8 a Master’s Degree in Business Administration may be the most popular graduate degree available. But because of this popularity, securing financial aid can be a highly competitive process. Partial- and full-tuition scholarships exist for MBA degrees; frequently these are set aside for disadvantaged communities or those with military service.
- The average cost of a Master’s Degree in Business Administration is $61,800.
- The average cost of an MBA degree from 2000 to 2016 was $55,320.
Another perceived downside is that your career goals may not match up to the benefits an MBA can offer. According to MasterClass,9 “Real-world experience can sometimes be more valuable, especially for entrepreneurs, than learning the ins and outs of management.” It’s critical to make sure your MBA program actually fits your career ambitions.
In the long run, does getting an MBA pay off?
According to the Graduate Managment Admission Council,10 yes. In a recent survey, they reference that the median starting salary for a recent MBA graduate can reach $125,000. That’s nearly double the average MBA cost of $63,000.8 Depending on where you earn your MBA and where you work, the degree could show ROI within a year of graduation.
Average Cost of an MBA
Median starting salary for an MBA graduate
Do I really need an MBA?
You're considering an MBA. You're weighing the options, the pros, the cons, and the potential pay. But there’s that little voice in your head, asking, “Is an MBA really necessary?” Does MBA school really matter?
According to MBAMission.com,11 “The easy answer is yes—go for it. Chances are high that you will make more money, have a better knowledge base that can propel your career forward, and make connections that will position you for future success. But an MBA is not for everyone, and especially not for anyone who is unsure what is driving them to pursue the degree. Before you dive in, think about why you want an MBA and where you want it to lead you.”
Remember, while all MBA degrees are not created equal, your MBA studies can help you develop broad business knowledge.
As noted earlier, the typical curriculum covers corporate finance, strategy, marketing, organizational behavior, and accounting. If you’re planning to work in a business-related field, in management, or want to start your own business, an MBA may be worth the expense, time, and effort.
Are people happy with an MBA? Here's what your peers are saying.
Only you know if an MBA should be the next step in your education and your career, but speaking with past graduates can go a long way toward informing your decision. If you haven't talked to MBA grads, you should. We did, and this is what a few of them had to say:
“I was initially drawn to the Tippie College of Business because of its ranking, and I knew pursuing my MBA there would help progress my career.”
“I had a great experience overall. I went back to school to learn skills that would help me find a new job after years out of the workforce. I accomplished that and so much more.”
“I got everything I expected to get out the MBA program and more. In addition to what I learned in the classroom, I learned to be ruthless with my time management.”
“The Iowa MBA helped me feel like I can be a part of the conversation no matter what level it’s at.”
“I use my MBA every single day of my life.”
“My MBA opened my mind to thinking about the big picture of business.”
Additionally, in information provided by Poets & Quants,12 “Some 88% of respondents said they ‘strongly agree’ or ‘tend to agree’ that they ‘gained substantially more skills’ to help them do better in business. Interestingly, another 82% either strongly agreed or tended to agree that the MBA helped them become more mentally resilient.”
In the same study, nearly three-quarters noted that they had been able to develop the business skills they wanted, while 72% said their MBAs made them more confident working abroad. And 65% agreed that their MBA helped them improve their professional network, while 64% said that an MBA helped them feel that they had what they needed to reach their goal salary.
Are you ready to take the next step in your education and in your career? Or, do you still have questions that need answers? If you’re still asking, “Why should I get an MBA?” read more here.
- Trevon Bennet. “Why Get an MBA Degree? 11 Career Benefits to Know About.” Indeed.com, March 2023.
- Bethany Garner. “What Do You Learn In An MBA Program.” MBA.com, April 2022.
- Karie McQuarrie. “3 Unexpected Benefits of MBA Beyond Job, Skills, and Career.” GMAT Club, February 2023.
- “How Much Does an MBA Increase Your Salary.” Transparent Career, May 2019.
- “MBA Degree Salary: 2023 Guide.” Coursera, June 15, 2023.
- Dr. Michelle Wieser. “Experiences and Outcomes of the MBA by Gender and Race.” Forte Foundation Study, September 2021.
- Genevieve Carlton, Ph.D. “Which MBA concentration pays the most?" BestColleges.com, August 29, 2023.
- Melanie Hanson. “Average Cost of a Master’s Degree.” Education Data Initiative, November 2022.
- “What Is An MBA? The Pros and Cons of Business School.” MasterClass, August 2021.
- Graduate Management Admission Council. “Corporate Recruiters Survey – 2023 Summary Report” June 2023.
- Rachel Beck. “Is an MBA Worth the Investment in 2023?” MBAMission.com, March 2023.
- Nathan Allen. “Two-Thirds Of Global MBAs Say They Are Satisfied With Their Degree.” Poets & Quants, September 2020.