If you’re wondering whether a Master of Business Administration (MBA) degree is right for you, one of the largest factors to consider is earning potential. After all, you’re a business professional, and you wouldn’t want to invest the time and effort – not to mention tuition costs – into earning a degree that isn’t worthwhile. Fortunately, the salary potential for MBA holders is very high. It’s not unusual for median salaries of business professionals with a master’s degree to reach the six-figure range, and in some truly lucrative senior-level roles, you could find yourself earning $200,000 or more per year.
How Much Do MBA Graduates Make?
As of 2017, the median starting salary for MBA graduates was $110,000, having grown $5,000 from the previous year. However, a number of factors contribute to the earnings of MBA graduates, including their amount of work experience, their job function and their area of specialization.
MBA graduates with five to nine years of work experience earn nearly $15,000 more a year than those with just one to four years of work experience. Your job function can greatly affect how much you will make with your MBA degree. One business school found that their graduates who worked in a marketing role had the lowest salary, $106,975, while MBA holders in the highest-paying job function, legal, made $182,308.
When it comes to choosing an MBA specialization, what concentration you choose could affect your salary more than you would think. The best-paying MBA specialization is Strategy, which offers an early-career wage of $96,200 and rises to a mid-career salary of $149,000, according to U.S. News & World Report. Next most lucrative is General & Strategic Management, where the mid-career salary tops out at $146,000. A degree in Corporate Finance has a mid-career salary of $138,000, while you can expect mid-career wages around $121,000 with an Operations Management MBA and $115,000 with an Operations & Supply Chain Management MBA.
The best business schools make sure their MBA programs keep pace with industry needs, so MBA specialization options are always evolving. If you know what you’re interested in, find a school that offers it – just beware of choosing a program too narrow to be marketable.
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Comparing Bachelor’s in Business and MBA Salaries
An important factor to weigh when contemplating a graduate school education is whether the impact on your career, and especially your earning potential, is worth the cost of going to graduate school. After all, earning an MBA is a big investment. While some highly-ranked MBA programs cost just a few thousand dollars per year, others can cost more than $100,000 per year, or $200,000 total if you complete your degree in two years. If you choose one of these expensive business schools for your education, you will need to recoup a lot of money through improved earning potential to make the cost worthwhile. For some business careers, a master’s degree is associated with a large salary increase, but an MBA is less valuable in other business occupations. For accountants, general managers, human resources workers and operations managers, a master’s degree tends to lead to a wage increase, but not a dramatic one. Some business roles, like training and development manager, tend to pay less rather than more to workers with a graduate degree, according to the United States Bureau of Labor Statistics (BLS).
Workers in the business and finance occupations see some of the highest wage premiums for having a master’s degree of all careers and occupations, the BLS reported. Perhaps that explains why MBA degree programs have become so popular.
This salary difference is most pronounced among sales agents in the securities, commodities and financial services, for whom the $90,000 median wage with a bachelor’s degree climbs by 89 percent, or $80,000 per year, upon earning a master’s degree. While the increase isn’t nearly as dramatic among other business occupations, it can still raise your earning potential a great deal. Logisticians see a jump of $28,000, or 52 percent, when they go to graduate school. An MBA can bump up a financial manager’s salary by 41 percent, hoisting it up into the six-figure range. Market research analysts and marketing specialists see their median wage rise by $25,000, or 38 percent, when they earn an advanced degree. The same percentage increase for marketing and sales managers takes their median salary to $110,000.
Because it isn’t always an MBA that offers the best shot at increasing your earning potential, business professionals should consider all of their options for career advancement, including graduate certificate programs and professional certifications.