What Is an MBA?
A Master of Business Administration (MBA) degree is the most popular graduate management degree in the world. To earn a claim like that, it must be a worthwhile endeavor for business professionals, right?
Let’s start with the basics. An MBA is a graduate-level business degree and, while some may refer to it as a generalized credential, many institutions offer opportunities for students to specialize in a focused business sector like finance, accounting, marketing, human resources, analytics, entrepreneurship and more. Students can also often follow general tracks where they can choose electives and customize their program to fit their unique career goals. Further, MBAs are known for their versatility and applicability across several industries. Managers or leaders in any field can benefit from an MBA and the real-world learning experience that turns MBA students into career prospects.
The versatility of an MBA is among one of its strongest traits. Graduates gain a holistic business education by touching on major functional areas as well as broader skills needed to excel. Accounting, communication, strategy, ethics, analytics, economics, finance, leadership and marketing expertise are just some of the skills graduates obtain. Even more so, such skills are applicable across most fields of work, so the power of an MBA extends even beyond business. Whether you’re an aspiring entrepreneur or senior business leader, an MBA is for you. They’re often offered both in person as well as fully online like at American College of Education (ACE). Many professionals who work full time choose online programs due to their affordability, flexibility and shorter completion time.
As MBA programs continue their exponential growth in popularity, the business landscape is seeing an evolving debate: Is an MBA worth it? To answer such an elusive question, it’s important to evaluate the value of an MBA through the lens of return on investment (ROI). This doesn’t necessarily refer only to financial investment, but that of time and energy as well. In this blog, we’ll walk through value propositions including cost considerations, ROI and industry trends. We’ll also dive into how an MBA can align with your personal and professional goals, long-term career vision and potential entrepreneurship. This is your guide to determining if an MBA is right for you!
Who Should Get an MBA?
One of the most significant value propositions of an MBA is its versatility and applicability, making it the popular endeavor it is. Anyone seeking to become a manager and leader benefits from learning how to oversee and direct employees, manage budgets, generate strategic visions, adhere to ethics and more. Business acumen is applicable in all fields of work, so even if you are seeking to upskill your knowledge in general with graduate-level coursework, an MBA can get you there.
In addition, earning potential and hiring demand make an MBA highly valuable. According to the Graduate Management Admission Council (GMAC) 2023 Corporate Recruiters Survey, MBA graduates had the highest median earning potential in the United States in 2023 in comparison to other business graduate programs. Recruiters surveyed also indicated that 37% of U.S. employers project that hiring demand for MBA graduates will continue to increase through 2028.
Earning an MBA can result in career advancement, networking opportunities and increased earning potential. Let’s talk through each area.
Career Advancement
Advancing into management and leadership roles is a natural step in most professionals’ career progression. Pursuing an MBA equips you with the skills needed to do so which, in turn, makes them more marketable, employable and promotable. Similarly, MBA programs offer a sense of credibility in the eyes of employers in the business world. When hiring managers see an MBA on your resume, they know you’ve got strong business acumen and the ability to successfully lead business and leadership initiatives. You’ll also be positioned for job opportunities like senior roles or promotions. An MBA is also a great option for individuals looking to change careers. Some graduates describe earning an MBA as transformative and inspiring. With its versatility, an MBA is even a worthwhile option if you know you want to move up in your career but you’re not sure yet in what capacity or field.
Networking Opportunities
MBA programs are great opportunities to build a professional network of like-minded individuals. When you walk alongside others while learning, you welcome an environment of empowerment and motivation to help catapult you to the career goals you’re trying to reach. You meet new people with similar goals where you can collaborate and share ideas. If you choose to complete an MBA in person, you’ll have the opportunity to connect with local professionals. Pursuing an online program may take your networking to a global level. And such opportunities don’t end at graduation. Most institutions have alumni networks where you can connect and not only grow your knowledge through the experience of others but pave a path to a new role. You could even meet your next investor or business partner!
Increased Earning Potential
Many individuals pursue graduate degrees with salary increases in mind. According to another GMAC survey in 2022, MBA graduates reported a 77% increase in their earning power. Further, 72% reported that their earnings supported their desired lifestyle. Oftentimes, seeing a salary increase is congruent with career advancement, which we’ve also identified as a benefit of earning an MBA. On average, graduates see a 33% salary increase. This is not only helpful when considering annual earnings, but it’s important to think about when you’re contemplating the financial commitment of an MBA. You’ll also want to keep your specific industry in mind as there are several sectors of the business landscape that might have variations in salary projections. Check out this handy tool to calculate your potential earnings after graduating with an MBA.
Is an MBA Actually Worth It?
Even though we’ve discussed the positive outcomes of an MBA, you should also consider the costs to weigh whether such a pursuit is worthwhile. There are four key areas to think through: cost considerations, ROI, industry trends and alternatives.
- Cost Considerations: When we think about cost, it doesn’t always refer to financial costs. It comes in the form of time as well. Financially, however, the cost of an MBA depends on factors like course delivery (in-person or online), institution, location and program length. The average cost is $56,850. Such high costs have resulted in the growing popularity of fully online, accelerated programs that are often far more affordable. For example, the fully online MBA program at ACE has a total cost of $8,675. Compare this to the in-person MBA at Harvard Business Schools, which costs $118,854 for single individuals and increases if you have a family.
- ROI: Pursuing an MBA is only worth it if there’s a reasonable ROI, especially considering the time and financial commitment it entails. To calculate your ROI, you’ll want to first think about the cost considerations mentioned above that encompass the full picture of what you’re putting into the program. Then, you want to measure this up against the benefits you anticipate like salary increases, promotion, professional connections and more. Don’t forget to consider how long it will take for those benefits to take effect. It can help to try an online MBA ROI calculator.
- Industry and Job Market Trends: Whether a business career requires an MBA depends on the level you want to reach and the sector you’d like to work in. For those seeking to climb the corporate ladder, earn a higher salary or become a leader, an MBA is a great way to get you there. The top three industries for MBA graduates include technology, finance and consulting. Areas where an MBA might be less advantageous are insurance, banking, bookkeeping and administration.
- MBA Alternatives: An MBA might not be the right choice for your desired career path, but don’t worry! There are great alternatives including massive open online courses (MOOCs) where you can hone specific skills through flexible learning. You can also complete an MBA certificate or mini-MBA where you get the master’s-level rigor without committing to a full program. If you still want a master’s degree, you can do a Master of Science in Organizational Leadership or something more specialized like a Master of Science in Accounting. Take the time to research whether an MBA or M.S. fits with your career goals.
Is It Worth It to Get an MBA Based on Your Goals?
At the end of the day, whether an MBA is worth it largely depends on your individual career goals. Think about where you want your career to go and consider the outcomes of an MBA. Is this kind of degree going to get you there? Let’s look at a quick example.
Let’s say you’ve earned a bachelor’s degree in business, and you’ve gained meaningful experience at the entry-level to a point where you’ve landed a role in management. As you work as a manager for a few years, you realize you’re ready for more at the senior management or even executive level. You consider how those on your team at that level have master’s degrees, specifically MBAs. You realize that earning an MBA will get you to where you want to go.
| Let’s say you’ve earned a bachelor’s degree in business, and you’ve gained meaningful experience at the entry-level to a point where you’ve landed a role in management. As you work as a manager for a few years, you realize you’re ready for more at the senior management or even executive level. You consider how those on your team at that level have master’s degrees, specifically MBAs. You realize that earning an MBA will get you to where you want to go. |
It’s also important as a business professional to have a long-term vision. While you may find your landing place at the management level, there’s a possibility that you’ll want more. Thinking about your career destination helps you determine earlier what you need to do to get there. This could be advantageous because if you know you’ll eventually need an MBA, you can pursue one at earlier stages of your career where you have less responsibilities before working in management or another higher-level role that takes more of your time and energy. While many MBA programs are flexible, when you have the bandwidth to complete it is undoubtedly an important consideration.
Some individuals aren’t looking to advance a business career as much as creating one themselves through the power of entrepreneurship. An MBA is not needed to be a successful entrepreneur, but it can certainly help. You’ll gain key skills like leadership and business essentials while networking with potential partners and/or investors. That being said, an MBA won’t guarantee entrepreneurial success, but you’ll have business acumen to give your business ventures the best chance at making it. In fact, Apple’s Steve Jobs and Amazon’s Jeff Bezos did not earn MBAs, and the entire globe benefits from their boundless success.
Pros and Cons of Getting an MBA
It’s always helpful to look at pros and cons next to one another when making an informed decision. We’ve put together a handy list to get you started!
Conclusion: Is It Worth It to Get an MBA?
In sum, an MBA’s worthiness depends on several factors but most importantly, your personal business career goals. Career advancement, networking opportunities and increased earning potential are top reasons why business professionals get MBAs, but remember, earning a degree of any kind is a time and financial commitment and investment. It’s critical to weigh the benefits and costs to make the most informed decision. When you’re thinking about whether an MBA is worthwhile for your unique career path, you want to consider the costs, return on investment, and industry and job market trends. It’s also helpful to think through possible MBA alternatives to determine if that is a more suitable direction for you. Again, your goals ought to be at the core of your decision to pursue an MBA. Your aspirations are key!
American College of Education is pleased to offer an affordable, flexible and quality MBA program.
