Top MBA colleges in the world: Payback time

When you ask the question: ‘Is an MBA worth it?’ the typical answer you’d hear from many friends and colleagues would sound something like this, ‘Yes, dude, an MBA is worth it…but only if you get it from the Top MBA colleges in the world’. Some might qualify it further a ‘Top 10 MBA colleges in the world’.

If you aren’t sure about the specific names they have in mind, check out this list of the best MBA programs in the world. Of course, the list will differ based on how the rankings methodology used to select the top MBA colleges in the world.

But in a world where everything is relative, such absolute truths seldom hold water.

When you are trying to analyse whether an MBA is worth it, there are several factors that come into play.

You could be looking at a career change, higher earning potential (post MBA salary), the opportunity to work abroad, the potential to gain new skills. Many of these are difficult to measure, so for the sake of this post let’s reduce the complexity and focus on one question.

Is an MBA worth it in financial terms?

Again there are various ways in which you might evaluate the financial worthiness of an MBA.

An Investment Banker might suggest using the Discounted Cash Flow (DCF) method to calculate the Net Present Value (NPV) of your future income. That doesn’t sound like English!

In simpler terms, it means considering the entire post MBA salaries that you’d get till you retire and finding out how much it would mean in the present day. Still too complex!

Ok, so we simplify it further and use another parameter to answer the question – Is an MBA worth it? We look at the payback period. Or in other words – how many years does it take MBA students to recoup their investment (cost of attending the MBA program including fees and other expenses). Much simpler parameter to understand, right?

Businessweek carried out a survey a few years back (not sure if they have a more recent version) to measure the payback period for the best MBA colleges. And the results were surprising for most MBA aspirants who had taken for granted that the best international MBA universities offer the best RoI.

Some of the best business schools (like Harvard, Chicago, Columbia) had the worst RoI in the survey. The payback period was over 10 years. Whereas for several lower ranked schools, the payback period was over 3 times better than the tier one colleges.

Payback periods for the Top MBA colleges in the world

Here’s a list of the best and the worst performers in the survey.

MBA Colleges with the Longest Payback Periods

School Name Payback (Yrs)
Chicago (Booth) 14.28
Columbia 12.78
Harvard 10.63
Toronto (Rotman) 10.02
Stanford 9.67
Texas-Austin (McCombs) 9.33
Kellogg 9.12
Wharton 9.09
Washington (Foster) 9.00
London Business School (LBS) 8.91
MIT Sloan 8.87
Georgia (Terry) 8.84
NYU Stern 8.22
Maryland (Smith) 7.99
Georgia Tech 7.89
.

MBA Colleges with the Fastest Payback Periods

School Name Payback (Yrs)
SDA Bocconi 2.25
HEC Paris 2.30
Manchester 2.68
Cranfield 2.94
IESE 3.16
Texas A&M (Mays) 3.42
Michigan State (Broad) 3.51
York (Schulich) 3.60
Illinois-Urbana Champaign 3.85
IE Business School 3.90
Penn State (Smeal) 3.98
IMD Switzerland 4.02
Minnesota (Carlson) 4.15
Purdue (Krannert) 4.28
Rochester (Simon) 4.33
.

Source: Businessweek
 

A few years ago, we published this article – Is Harvard the best MBA program in the world?

We didn’t have hard data to substantiate it then, but this survey by Businessweek seems to be aligned with the message in that post as it adds additional insights about selecting business schools.

Payback discussions aside, there might be other reasons for you to consider only the top MBA colleges in the world. Prestige being one of them. This is important if you have set your eyes on the best strategy consulting firms or the top bulge-bracket investment banks. Employers like McKinsey, Goldman Sachs, several top-notch private equity funds won’t touch if you aren’t from one of their feeder MBA programs.

However, not all Indian applicants want to get into these companies. Their post MBA goals might be more modest. For instance, many engineers might only be looking at moving from a pure technical role into a business oriented role.

In such cases, insisting on sticking only to the Top 10 MBA colleges may not be the best strategy.


Liked the article? Show us some love. Share it.

MBA Crystal Ball provides professional Admissions Consulting services. Hire us to improve your chances of getting into the top international universities. Email: info [at] mbacrystalball [dot] com

Sameer Kamat //
Sameer Kamat
Founder of MBA Crystal Ball. Author of Beyond The MBA Hype & Business Doctors. Here's more about me. Connect with me on Google+ | Twitter | Facebook | Linkedin

25 Comments

  1. kovthe says:

    Hi,

    I am 32 years old married Indian national.Currently working as a software engineer, and having 7 years of total work experience. Out of these seven years, I also worked as a first line manager for a year. Doing MBA from US has been a dream, but I was not able to pursue it seriously due to personal reasons. I am trying to explore suitable MBA colleges and courses. Also I will be able to take up the course only if I am able to get almost 100% financial aid. I have read few blogs which states GMAT score is not the only factor which can fetch 100% financial aid. Also my graduation grade is not very promising(65%). My purpose to do an MBA is to switch career. I am quite interested in general management and leadership roles.

    Please advice.

  2. Prashant says:

    Hey Sameer,
    First of all, thanks for such an awesome initiative I have read a few of your articles and it makes a lot of sense to me. However, i am in a bit of a pickle and have no idea/guidance as how to go about it.
    A little bit about myself:
    I did class Xth in 2004 with 82% , Class XII in 2006 with 62%
    then i dropped out for an year and enrolled for B.Tech in 2007 and completed it in 2011 with 75% marks.
    However during my graduation i had made up my mind for further studies (MS) in the states. I decided to prepare for GRE while working at my family owned business (a medium level school).
    A year later in 2012, i left everything and went to Delhi and got me a job at a call center (Tech Support).
    Meanwhile, I kept preparing for GRE and after writing the exam twice and not being able to secure the target score for scholarship, I decided to do MBA in IT (IT Business Management) and appeared for SNAP (Symbiosis) and got enrolled.

    Now the issue:
    I have 1 year gap before graduation.
    I have 2 year gap after education in which i have worked at a call center for 7 months and at family business for 13 months…
    I hardly get shortlisted for an interview because i did not put family business in the work ex section of resume and call center experience is not relevant for IT MNCs.
    I am torn to pieces mentally and cannot see what to do.

    Any feedback/suggestion/guidance will be highly appreciated and valued.

    -Thanks

  3. Sameer Kamat says:

    Prashant: I’m afraid I don’t have a simple answer to your queries. In fact, pretty much like the hiring managers that you’ve reached out to, I have more questions about your decisions and the breaks and the transitions. Your post doesn’t address them.

    Without knowing the context behind them, I can understand why the HR teams might be cautious about taking the resume to the next level.

    All I can suggest is to start small and not be too choosy about the work you are getting. Show commitment and progress in that role to avoid giving the perception that you aren’t sure what you want in your career.

  4. Dr Subir Roy says:

    Hi

    Hope this email reaches Samir Kamat. I am a great fan of Samir and an avid reader of his articles and blogs. I needed Samir’s guidance on a decision that I have to make.

    I have around 5 years experience in pharma marketing. I am a medical graduate by qualification.
    I got selected for both IIMB EPGP and ISB.

    I am confused between the two. With 5 years of experience and >22 L p.a. package, IIMB looks more promising. But I have not seen any pharma company/ consulting recruiting from IIMB- EPGP and I intend to work in either consulting or pharma.

    A lot of pharma companies/ consulting firms hire from ISB. But with my work experience and package, would ISB be a right choice?
    Kindly advise?

  5. BIBHOR says:

    Hi
    I am working in IT company for last 4 years in design engineer post. My salary is in 4lac. Which is best colleges for me to select. I don’t have much except my experience in company. With scoring good marks can i get good colleges or they require something more.

  6. Sameer Kamat says:

    @Subir: You don’t have to depend purely on companies coming to campus. Reach out to firms that you are interested in and where your prior experience counts.

    @Bibhor: Too broad and too vague, buddy. Check out the official pages of some bschools to see what they require during admissions.

  7. Vishwamurti says:

    Hi

    I have done BE in computer science. Then started working from last 10 years. In between I have done MBA in Marketing. Now planning to join German Language course for 2 years. After that I want to switch my job to abroad.

    How much salary I can expect with current CTC is 24 lakh per annum

  8. vijay says:

    Hi Sameer, Need your advice !! I am Vijay (29 Years Engg undergrad ,unmarried) with 6 years of IT experience , Now I have a Home loans of 23 L and applying to ISB this year..however the prospect of another 25 L loan is unsettling me . I am very interested to do an MBA in ISB but could you suggest if applying to ISB is a good idea..or better go to US to clear your home loans. ( Will be applying H1B visa this year and no guarantee i will get it ).

  9. Sameer Kamat says:

    @Vishwamurti: For most top MBA colleges in USA, the average salary is over $100,000. However, whether you’ll get higher than that or lower (if you get a job abroad in the first place), is something nobody can predict.

    @Vijay: As we keep saying, never stretch your financial resources too thin. If you can’t afford more debt at this stage, defer the MBA plans.

  10. Harmeet says:

    I just discovered MBA Crystal ball today and ended up spedning many hrs on the site. Great work Sameer and co.
    Hope to work with you in a few months when I start my applications.

  11. Sumit says:

    Hi Sameer bhai

    Thank you for coming to rescue.

    FYI below is my profile :

    Currently : 5 years of finance experience (consisting partly of financial consulting in big 4)

    Post MBA specialization : Strategy

    Seeking your advice for : Katz (US) v/s Schulich (Canada)

    Katz !

    Admitted to Katz with 50% scholarship.

    Pros – Good ROI / good for finance
    Cons – not sure of its credentials for Strategy specialization / Location is more suited for IT / Lower in ranking / only 1 year OPT post MBA

    Schulich : Admitted to Schulich. Scholarship decision awaited !

    Pros – Toronto / lies in top 3 schools in Canada / 3 years work permit (plus PR) / all major companies / more suitable for strategy v/s Katz
    Cons – Expensive (no scholarship till now !) / taking up loan for major part / competition will be more (I believe!)

    Given the above facts & assessment, could you please suggest me which one to go for ?

    • Sameer Kamat says:

      Sumit,

      Congrats on the two admits. Though neither of them is a feeder school for consulting jobs, purely on the basis of the number of post MBA opportunities available in USA and the fact that the scholarship makes your total outflow far more manageable, I’d go with Katz.

  12. Divya says:

    Hi Sameer,

    I have scored 74% in 10th and 72% in 12th. I took a year gap for Engineering preparation. Finally took admission in 2009 in B.Tech ECE. Passed out in 2013 where i secured 85.8% Have work experience of 1.5 yrs in Accenture. Now I want to pursue MBA from one of the top colleges in world. Now the problem is all the best colleges ask for a minimum 3 or 5 yrs of experience. Also i need scholarship to do MBA without which it is impossible for me to take admission. Also i want to start my own business after 5yrs and thats the reason i am looking for MBA. And I am not sure which field to opt for MBA – Masters in Management or International Business or Masters in Entreprenurship or should i go fr some other field. Please advise.

  13. Dibyadeep says:

    Hi Sameer….brilliant article in the the sense that it can make even a nonMBA interest guy think about the course!!
    I am a Computer Science Engineer now in the 6 year of my professional career.Maybe its my own deficit or maybe its some other reason I never have been able to make a mark in my profession.I have often browsed sites of colleges abroad and ones in India to get a feel of their programmes but have not been able to come to a decision.I am a sports enthusiast by the way and am aware of courses in Sports Management worldwide.Is a Sports Management Degree an advisable option at the current stage of my career.If yes which colleges should I look to try to get enrolled in?there are amny colleges and all of them have more or less mixed reviews so its confusing to say the least.

  14. Sameer Kamat says:

    @Divya: A general management MBA works as good as any other specialisation, if you ask me. Once you get the basic theories of management, how you apply it to your own business or somebody else’s will vary.

    @Dibyadeep: Continuing with the logic in the respons above, rather than aiming for a brand just because it has a high ranking, I’d suggest targetting programs in the geography you want to work in.

    During the course and afterwards, it’ll be easier for you to network with the Sports or Media management companies and hustle your way in.

  15. Mohammed Ansar says:

    Hi Sameer,

    I am looking forward to join for an MBA program in Canada, Ireland or Europe. I went through few articles and blogs online, however I am still confused on how to go about it. I had 70% in 10th and 66% in 12th(2008) with Science and Mathematics. After that I dropped out for an year and went for graduation in Bachelor of Business Administration which I completed in the year 2012. Then I went for a CISCO certification as I was interested in exploring the computer network part. I worked with an online branding firm as Business Development Executive for an year after that(ie. in 2014). At present, I am working with a construction firm in India at the management side. I am trying to explore the MBA courses and affordable colleges. Also I would like to consider the living cost and chances of getting a part time job while choosing the country. I would be giving my IELTS in July. Could you guide me though the scholarship programs that I could try to get maximum financial aid in doing my MBA. Your suggestions will be highly appreciated and valued. Thank you.

  16. Jitesh Mehta says:

    Hi Sameer , First of all , thanks for doing such a nice work. I just got to see this site and out of my anxiety and curiosity , I need your advice for my son. He got 93% in 10th , 86 % in 12th , and currently doing B. TECH in COMPUTER SCIENCE , from IIT , MANDI. He is now in 4th year. He will be having campus placements season in 4 months. He is confuse about what to do after B. TECH from IIT ?? MS or MBA or a job if he gets in any good company in campus placement ?? If MS or MBA , then from India or abroad ?? Please guide me on what will have a better prospects for him.
    Thanks. Jitesh Mehta

  17. Sameer Kamat says:

    @Mohammad: This article should help: World’s most affordable MBA colleges

    @Jitesh: Check this out – MBA or MS after engineering

  18. Saba says:

    Hi Sameer,

    I work as Communication Designer for Mahindra Retail, I have scored 87%in 10th(2006), 83% in 12th(2008), & 89% in Bachelors of Design-National Institute of Fashion Technology(2012). I have a work experience of over 3 years (2012 to present). There are no gaps in education or work. There are a few achievements like ‘Student of the Year- Times of India’, ‘College President-NIFT’, ‘School Captain’ etc. I wanna do an MBA from Canada (considering the 3 years work permit & PR). I wish to attend in 2016. I don’t want to go for a loan and pay through scholarship and personal funding.

    Can you please suggest some MBA colleges in Canada which have a decent ranking & aren’t very expensive.

    Thank you.

  19. Rohit Khanna says:

    Hi, Everyone

    Please help me.. I am from India, I want to take admission in Harvard for MBA program. I have scored in 10th ( 90%), 12th (92%) & 86% in BCA which I have done from Delhi university . Kindly suggest me what is procedure to take admission Harvard Business School.

  20. Ajay says:

    Hi Manish,

    I given my GMAT first time today and scored a 600 (Q46, V27) IR – 8.

    My X- 92%
    XII – 96%
    B.Tech – 86%.

    I am planning to Apply for
    1) University of Pittsburgh – Katz
    2)Manchester School of Business

    Is there any other food colleges which suits my profile.. ?

    I have 3 yrs of experience in IT working with Hewlett-Packard..

    Please provide your suggestions..

    Thanks,
    Ajay.

  21. Ankit says:

    Hi Sameer,

    I am a MBA aspirant and i have have following your website for few months now. most my doubts just gets cleared by roaming on your website itself, its definitely amazing, but still i have a doubt in my mind and hope you could clear it.(pls)
    I am a civil engineer with 3 year experience in construction and i am thinking/planning to write GMAT next year (so by then i will have 4 years of exp). My major doubt is that, Will, having a civil engineering background and studying MBA, be very challenging in terms of job scenario post MBA graduation?? or i shouldn’t be afraid /considering this fact and just slog my way through MBA by working hard!

    hope you get my point. pls help

    Thanks

    Ankit

  22. Shafi says:

    HI Sameer!!!
    Great Work on the article.
    I am 32, married no kids currently working in a Bank with package of 14 L. I completed my grad in 2005, then took a gap for 1 year and completed my MBA in 2008 with 65% marks from GOA. I want to change my industry rather boost my salary by doing MBA from good institute. Looking at the current issues in USA & UK, i am not thinking of any colleges in those two countries. Can u suggest which colleges would help me to boast my career and income. I will be taking my GMAT next month.

Leave a Reply

Your email address will not be published. Required fields are marked *