Most prospective Master of Business Administration (MBA) students have heard of the “MBA premium.” This post-graduation salary boost is one of many reasons the MBA is the most popular advanced degree in the U.S. and why Poets & Quants analysts describe this credential as one of the “surest paths to a lucrative career.” The 2021 Graduate Management Admission Council (GMAC) Corporate Recruiters Survey—the most commonly cited source on MBA trends—reported that the median annual salary of MBA holders is now 77 percent more than those with a bachelor’s degree.
That’s a compelling statistic, but one that doesn’t tell a complete story. GMAC gets its information from recruiters hiring recent MBA graduates. The data reported doesn’t offer much insight to pre- and post-MBAs planning to remain with their current employer. According to another GMAC report, MBA candidates who plan to stay in their current organizations make up about one-third of all MBA candidates. Unfortunately, there is much less data about starting MBA salaries for these professionals.
We know that these MBA grads are generally working professionals who are farther along in their careers and are looking to move into leadership roles. They often choose part-time MBA programs such as Howard University’s online MBA. Investing in an MBA degree may seem like a bigger risk for these students. However, just because so many professionals pursue this degree to change jobs doesn’t mean those who want to advance in their current organizations shouldn’t look into the ROI of an MBA. Below, we explore MBA salary premiums for non-career switchers and the advantages of pursuing an online MBA.
MBAs correlate with higher salaries
The overall value of the MBA is well-documented. According to the GMAC Corporate Recruiters Survey, MBA graduates can earn as much as $3 million more than someone with a bachelor’s degree over their careers. On average, MBA holders earn a base salary of about $115,000 per year plus stock options, signing bonuses, and other perks common in the business world. Keep in mind those perks can be significant. According to U.S. News & World Report, the average MBA signing bonus is roughly $19,000. And when Relish and Transparent Career polled business school students before and after entering graduate school, they found that students who earned their MBAs between 2009 and 2018 reported an average increase of about $37,000 post-graduation.
MBA holders may be better equipped to weather economic ups and downs because the demand for business leadership expertise in uncertain times keeps MBA salaries high. In 2021, the Wall Street Journal reported that the challenges posed by the pandemic, such as supply chain disruptions and the rapid switch to remote working environments, led to increased MBA hiring and MBA salaries. Salaries for new MBA graduates hit record highs across industries, according to the Journal, highlighting one of the other major benefits of the MBA: its versatility. The skills MBA candidates learn in graduate school are industry neutral, which means there are career opportunities everywhere they look—including in high-paying sectors such as technology, healthcare, and finance.
However, while many professionals enroll in business school specifically to change jobs or transition into new industries, many MBA candidates have no plans to leave their organizations or functional areas. They want to advance where they are and may look for proof that an MBA will help them do so before applying to graduate programs.
Will an MBA increase your salary if you don’t switch jobs after graduating?
The aforementioned GMAC report does offer some insight into this question. It found that professionals who planned to remain with their employers after graduation typically received a 39 percent salary increase. That’s encouraging but requires caveats because the survey group included professionals who graduated from Executive MBA programs. EMBA graduates often have more than 10 years of experience and enter their Executive MBA programs already earning good salaries. Their goal is to advance to the executive level, where high salaries are the norm, and their post-graduation earnings skew the average MBA salary figures upward. Early and mid-career professionals may not receive as large of an immediate boost.
The key word is immediate. The long-term ROI of an MBA is significant, whether you stay at the same company, switch employers, or transition into a new industry. The ROI of a part-time MBA may be even greater—particularly if you can pay for some or all of your degree through employer sponsorship. In a Wall Street Journal letter to the editor, HR professional Joyce D. Yaffee writes that now is an optimal time for professionals who only have bachelor’s degrees to approach their employers for MBA sponsorship. Yaffee was responding to a Journal article about the uneven U.S. labor market, in which there are more job openings than interested applicants.
Keep in mind, too, that MBAs offer benefits beyond increased pay. Students in part-time MBA programs can take what they learn in the classroom back with them to their workplaces, immediately delivering more value. In programs such as the Howard University School of Business online MBA program, students explore new business functions and industries, learn critical communication and collaboration skills, and expand their professional networks.
You may be planning to stay with your current organization for the next three to five years but earning an online MBA in a part-time program can open up opportunities beyond that. If and when you leave your current employer, you will have connections in corporate boardrooms and executive suites worldwide. You’ll have more negotiating power when it comes to salary and benefits. Your post-MBA career may be in general management to start, but you’ll also have the credentials to move into higher-paying MBA jobs in management consulting or become an entrepreneur and launch your own startup.
Even if you are not planning to leave your organization right now, getting an MBA—especially one that you don’t have to pay for—is one of the smartest things you can do to safeguard your future.
Why working professionals choose Howard University School of Business
Average starting salaries for MBA graduates are high, making a compelling case for pursuing an MBA. New MBA hires who change jobs or switch industries may see bigger immediate returns, but they don’t necessarily have the highest average salaries when you look at pay over the course of an entire career. Having an MBA on your resume can enhance your professional life in myriad ways, now and in the future.
However, before you start researching top MBA programs, be aware that enrolling in a full-time MBA program involves taking on a lot of risk. Full-time b-school students miss out on work experience, sacrifice income, and in some cases, advance more slowly than peers who stayed in the workforce while studying. Additionally, full-time study can be more costly—especially if relocation is involved.
Professionals choose Howard University’s part-time online MBA program for many reasons beyond the possibility of earning a six-figure salary. MBA candidates at Howard continue earning income and advancing along their chosen career paths. Howard University is also the only HBCU on Bloomberg Businessweek ’s list of top U.S. schools, and Howard University School of Business ranks #45 among the best U.S. business schools.
But Howard’s greatest strength stems from the people who make up the university. As you pursue your MBA, you’ll receive career support from dedicated members of the school’s Career Services office. And if you leave your current employer at some point after graduation, you can tap into a large and engaged global alumni network. Faculty are accessible and offer hands-on support and guidance. Online MBA student Krystal Brockett said she felt challenged and understood by her professors and the administration at Howard, even from behind a computer screen.
“Howard University hires the most impressive professors who have had powerful experiences as business leaders, such as serving on the DC Retirement Agency board and working on President Barack Obama’s campaign and Rep. Stacey Abrams’ VOTE initiatives,” Brockett said. “I feel close to every professor that I’ve had. I can send an email to any of them—even if I’m no longer in their class.”