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Average MBA Starting Salary

Updated on September 11, 2012

Obtaining an MBA can provide a significant increase in an individual’s salary. As one of the most recognizable advanced degrees, a level of prestige, recognition, and respect comes with obtaining this additional piece of paper. Knowing the basics of business can be beneficial for anyone. However, an MBA is not a simple strategy to riches.

While business magazines often contain articles of the best business school’s with high starting salaries, getting an MBA does not mean you are guaranteed an executive job in the office on the top floor. The averages stated by business magazines are often a poor representation of what a new graduate will actually make because of the many factors that can determine the type of job, along with pay scale, that a fresh grad will receive.

Consider the following factors when trying to determine what you may actually make as a new MBA graduate.

Why Would you Get an MBA?

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Previous Work Experience

A huge determining factor in what a new MBA graduate will receive is based on previous work experience. Many MBA students have already worked for several years and are returning to school – some even have tuition covered by their companies. These students will often start with a higher salary than a student who has gone straight from undergrad into an MBA program, simply because they have worked for their company for a longer period of time.

While grades are often the determining factor in the sciences and arts, previous work experience is usually what determines the success of a business graduate in finding a job. It is possible to have straight A’s but terrible people skills and an inability to think creatively. Businesses pay big bucks to the people who are capable of thinking outside the box and motivating others – rather than simply recalling already known facts. Taking some time to think about when to get an MBA is a good idea.

The School Behind the Degree

The average starting salary for an MBA graduate from one of the top 10 business schools is about 2-3 times the starting salary of an MBA student graduating from a lesser known business school. Therefore, if money is what you are really interested in, getting into a university such as Harvard or Stanford is very important.

Degrees gotten online or from smaller universities will provide a decent education, but are not likely to get a student a top paying job right after graduation.

Although businesses hire first for experience, when there is a draw, the graduate from a well-known school will get the job.

GMAT Scores and Grades

Although work experience is important for the job market, good grades and GMAT scores are priceless for getting into the best graduate schools. In fact, the graduates with the highest paying jobs after they finish studying the MBA are often those that received the highest scores on the GMAT (Graduate Management Admission Test). Accepted students to the best universities, such as Harvard, have an average GMAT score over 700 (out of 800) - meaning they are in the top 10% of GMAT test takers.

Although being genius doesn’t mean you will be a great business person, it certainly doesn't hinder your chances. If you have great work experience AND fantastic grades, you are clearly a talented individual and companies will be interested in you.

Network and Contacts

“It’s not what you know, it’s who you know”. This phrase is incredibly true in business. In fact, one of the reasons that so many graduates from prestigious universities end up with high paying jobs is because of the network that the university has put in place for them. Someone who has graduated from my Alma Mater will immediately have an interest to me that someone from a random school will not.

An important and necessary step, regardless of the school that one goes to, is to start building up a solid network. The more people in powerful positions that one knows, the easier it will be to work those connections to build a strong set of references and find a great paying job.

The beautiful thing about the business world is that it is all about networking. Asking people for favors is not something that is looked down upon in the business world. Although you never want to come across as a jerk, requesting someone to introduce you or drop your name to someone looking for an employee is perfectly acceptable.

Desired Job Field

The average starting salary seen in magazines will be more accurate for someone going to work for Wall Street. A graduate interested in starting their own business, working for a non-profit or a startup, pursuing a career overseas, or working part-time will have a much lower salary. The current generation of MBA’s, more than any in the past, are pursuing interests that they are more passionate about, but provide a lower salary.

It is often MBA's heading into finance or banking that end up getting the largest salaries. Although salary should never be the most important focus, an MBA in finance can provide a specialized focus able to lead to more earnings in a more specialized field.

Study to Learn, Not to Earn

The truth of the matter is that many people are getting MBA’s now because of the bad economy. With nothing else to do and unable to find a job, they are hoping that the MBA will make them more noticeable on the job market. Although this is true, when everyone is doing it, it makes the degree less valuable.

Focus on finding valuable work that you are passionate about. If acquiring an MBA will benefit you in this endeavor, then pursue one. If you have a love for learning, then study more. However, getting an MBA only to earn a higher salary is not the best idea.


Is an MBA Worth the Time and Money?

If you would still like to know if an MBA is worth your time, according to Forbes Magazine the MBA graduate who works 40 years will earn an average of $5-$8 million. The worker with only an undergraduate degree will earn about $2.3 million after 40 years of working. This means that the two years and tens of thousands of dollars in debt needed for an MBA more than pay for themselves over a lifetime.

All-in-all an MBA is a good investment for someone who is interested in a lifetime career in business. The knowledge gained, respect earned, and potential for advancement make this a very valuable degree.


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    • msmmba profile image

      msmkhana 5 years ago from New Delhi

      In India the average salary of an MBA graduate is 30k/pm

    • profile image

      preet 5 years ago

      Thanks, you was very helpful for me

    • profile image

      reavathi 5 years ago

      not bad

    • Simone Smith profile image

      Simone Haruko Smith 5 years ago from San Francisco

      This is so right on. It bothers me when folks say "Oh... just go get an MBA. You'll make TONS more money" when so many different factors come into play- ESPECIALLY one's non-academic work experience, network, and alma mater.

      Thanks for offering such a balanced and fair assessment of the issue.

    • yougotme profile image

      Renz Kristofer Cheng 5 years ago from Manila

      Thanks Robert! I'll be looking forward to read that hub. I want to learn more about the practical side of the 2 choices.

      Actually, I've already learned about the "Economics" of it. And based from the topics and theories we've discussed, it is better to take up a master's degree as early as possible. But you know how theories are. They have the tendency to over-simply things.

    • Robert Erich profile image

      Robert Erich 5 years ago from California

      @greatstuff: That is a very good point. I have also spoken with several employers who are doing exactly that - hiring MBA's for the pay of an undergraduate in place of hiring an undergrad. Thank you for adding that. However, I have heard that it is still easier to move up the corporate ladder with an MBA.

      @ksharp: Thanks for the flattering compliment. I have actually taken classes at a variety of colleges and universities, but my actual degree is from a small college in Michigan, Andrews University. I've loved it and have met all kinds of awesome people.

      @yougotme: I am going to write another article about just that! Very good question. It honestly depends on a variety of factors. It is a good degree to have, but if a business will pay for it, then you're even better off.

      @leahlefler: I love all of your great input and wisdom in this area. I have heard much of the same from a variety of people - without an MBA you end up hitting a glass ceiling that it can be hard to get past. An MBA opens up a lot of doors.

    • leahlefler profile image

      Leah Lefler 5 years ago from Western New York

      This is a great article, Robert. My husband obtained an MBA through an executive MBA program at SUNY Buffalo - he had already been working for a decade and was the manager of product development, but he wanted to get an MBA so he could move into operations. He has his MBA and is now the Director of Operations, and loves it. Stressful at times, but the MBA was definitely beneficial in advancing his career.

    • yougotme profile image

      Renz Kristofer Cheng 5 years ago from Manila

      This is pretty interesting, especially that I'm thinking of taking up MBA after my degree.

      Thanks for this Robert! Oh by the way, would you rather recommend somebody to take MBA immediately after a Bachelor Degree, or have a job first then take MBA?

    • krsharp05 profile image

      Kristi Sharp 5 years ago from Born in Missouri. Raised in Minnesota.

      Very interesting article Robert but it leaves me wondering.....what is your Alma Mater? Great information and well written. -K

    • greatstuff profile image

      Mazlan 5 years ago from Malaysia

      With the tough job market now, most employers will select candidates with an MBA, but paying similar salary to those without an MBA.(at least, here in my country) That's how bad it can be. But if the economy picks up, I agree with you that MBA candidates will get better a salary. Good article Robert. Voted up and useful.


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