Pursuing a Master of Business Administration (MBA) requires a significant investment of both time and money. But is an MBA still worth the investment in a post-pandemic world? While there are many factors to weigh, an MBA program is a life-changing decision with implications for your career aspirations, opportunities and finances. In this article, we examine the pros and cons of getting an MBA and offer insight into how to determine if an advanced business degree is right for you.
Types of MBA degrees
Students can complete MBA studies part- or full-time. Often, a full-time commitment is best for new grads or other students who do not need to work while completing their degree.
Two types of part-time MBA programs exist:
- Executive MBAs (EMBAs): EMBAs are for students with several years of work experience in executive or leadership positions. These students are between 32-42 years of age. The student's employer normally pays for their studies.
- Part-time MBA: These degrees are for full-time employees not yet in leadership roles. On average, students are between 24-35 years old. Part-time studies offer classes in the evenings after work or on weekends.
Respectable MBA programs require a GPA of 3.5 or better. The highest-rated programs require an even higher GPA score. In addition, the top-rated business schools require a Graduate Management Admission Test (GMAT) score between 720 and 730 (out of 800).
Although excellent academic results offer a solid foundation for an MBA program, many business schools also value relevant work experience when considering candidates, especially for EMBA programs.
Pros to getting an MBA
An MBA has several benefits, including:
It can improve your career opportunities
An MBA qualification is a good foundation for many careers, including executive roles, project management and market research roles. While the number of high-level business job opportunities dropped in 2020 amid COVID-19, nearly 90% of firms expressed an intent to hire MBA graduates in 2021—similar to the rate seen before the economic downturn.
Simply put, an MBA can strengthen your resume and improve the range of career opportunities available to you. Graduates' job opportunities improve through networking with peers and professors. Alumni reviewing your application may prefer appointing a graduate from their business school.
It can increase your income
An MBA can help you earn a higher salary or get a promotion. While the COVID-19 pandemic severely impacted the business world, a study by the Graduate Management Admission Council found that base salaries were still significantly higher for MBA graduates compared to those without an MBA. In 2021, MBA median salaries are projected to recover to all-time high levels of $115,000 before the pandemic severely disrupted the global economy. This equates to 77% higher earnings than those who only hold a bachelor’s degree—approximately $3 million more in a lifetime.
Alums recommend doing an MBA
A survey of MBA alums showed that, knowing what they know now, nearly all (92%) would enroll again if they had to decide again about whether or not to pursue an MBA. This number holds true for students who graduated during tough times: Graduates during recession years (1980-82, 1990-91, 2001 or 2008-09) are just as likely as others to value their MBA degree.
It broadens and deepens your knowledge
An MBA program develops your skills in business-related subjects, including economics, communication, accounting, management, statistics and entrepreneurship. Modern MBA programs focus on business management, marketing and problem-solving, often through case studies, making it a valuable degree to have in the post-pandemic era.
Cons to getting an MBA
For some people, an MBA might not be the right choice. Here are some potential downsides to consider before pursuing an MBA:
It’s expensive and doesn’t always promise a return on investment
Getting an MBA degree can be an expensive experience. It may not be affordable to everyone, especially for recent graduates. An MBA can cost up to $200,000 with several of the top-rated business schools' MBA programs costing even more. Like most advanced degrees, the costs of MBA studies are increasing each year, and chance for a high return on investment is decreasing. An MBA at a top-rated business school will provide a payoff, but an MBA from a lesser-known business school may not provide much of a return.
You might have limited financing options
How you finance your MBA studies is important. If you have been working for a company for several years and the company will pay for your studies, the decision to enroll may be easier. You can consider using a student loan, but this will require a long-term commitment to paying it off and may affect your family or other areas of your life.
An MBA isn’t a requirement, and alternative qualifications may be more valuable
There is no specific career path where an MBA is essential. An MBA degree is not a requirement for success or to become a CEO. A study by Heidrick and Struggles found that only 35% of the CEOs in the United States have MBAs compared to 42% five years ago. Many boards no longer focus on academic credentials but find work experience more important for company transformation.
In specific industries, MBA graduates don’t get appointed to senior positions as the company considers hands-on work experience to be more valuable. And alternative qualifications may be better for specific careers. For example, an MBA degree is ideal for a career in finance. For non-financial industries or non-managerial career paths, alternative qualifications may be more beneficial.
How to decide if you should get an MBA
Before answering this question, assess your reasons for wanting to obtain the degree to make sure you are ready to commit to an MBA degree and that you choose the right area of specialization. The common reasons for considering an MBA degree include:
You want to earn a higher salary
An MBA leads to higher income, but work experience, outstanding work performance and professional certifications can also result in salary increases.
You think an MBA is the best way to start your entrepreneurial ventures
An MBA can provide you with networking opportunities. It can help you explore new business ideas and start a new venture with the support of your business school and fellow students. An MBA provides a good base for developing a network, skills and knowledge to start a new business.
To determine if an MBA will help you start your own business sooner, test potential MBA programs using the following criteria:
- Does the program provide the practical leadership and management training required for an entrepreneurial venture?
- How did the alumni benefit from this MBA?
- Are there other alternatives that could hone the business skills you need?
You want to climb the corporate career ladder
You don't need an MBA for any specific career path. Factors to consider in choosing to do an MBA are:
- What industry am I working in and in which industries may I want to work in the future?
- Do I need an MBA for these industries?
- How do the industries I am interested in view the MBAs I want to pursue?
- Are there any alternative options to help me be a success in the industries I want to consider for a career?