The MBA class of 2020 recorded a whopping average pay package of $176,083 at Stanford, $175,148 for NYU – Stern and $173,882 for Tuck – despite the tough economic crisis created by the ongoing pandemic.
Does it make you wonder why MBA graduates right out of business schools get paid such high salaries compared to graduates of other degree programs?
Why do companies hire MBAs at high salaries?
An MBA program provides the opportunity to tackle real-world business issues and challenges, honing your analytical and critical thinking abilities and imparts skills including strategic management and decision-making, time-management, teamwork and leadership.
There is a lot of peer-to-peer learning due to the class diversity and the prior professional experience of your classmates.
Through class interaction and discussions, you are exposed to different (often contrasting and conflicting) perspectives and approaches to solving complex issues.
You develop a strong network of high achieving peers and alumni from varied professional and cultural backgrounds. This powerful benefit lasts a lifetime, long after you’ve forgotten what you learnt in the classroom.
The various courses covered in the program as well as the practical exposure helps you get a complete picture of how organizations operate along with various business concepts and tools used in the industry.
The skills acquired are applicable across industries as well as various roles. The in-depth knowledge and insights gained during the rigorous MBA program can be a huge value-addition to an organisation.
According to GMAC corporate recruiters survey, versatility, strong communication skills, strategic thinking, taking up leadership roles, navigating the challenges of technological disruption and handling a complex business environment were the top qualities of business school graduates that recruiters are confident about.
Read Highest Paying Finance Jobs in the World
Another aspect that makes the top business school candidates attractive to recruiters is that these schools have low acceptance rates. Candidates who get in have made it after going through a tough selection process.
Tips for Leveraging Alumni Networks
Georgetown MBA graduates are among those who manage to bag high paying MBA jobs and their alumni have played a key role in the process. So we reached out to the business school’s careers team to request for some tips that MBA Crystal Ball readers could use.
Kerry Kidwell-Slak is the Director of Career Curricula and Communications in Georgetown University’s McDonough School of Business MBA Career Center. She shares 4 seemingly simple but highly effective tips to keep in mind.
1. Connect on shared experiences
There is nothing better than reminiscing about a famous (or infamous) finance final or the triumph of winning a case competition to create a bond between students and alumni.
Alumni value hearing about what is happening at their alma mater, so in addition to thinking about the information you hope to get from them, also consider what you can offer from your own experience.
2. Prepare and be professional
Alumni’s time is valuable, so make sure you do your homework before you reach out or meet for a coffee chat.
Review their LinkedIn and school-specific alumni databases for profile information and make sure you do your research about them and their organization through publicly available sources so your questions will focus on their unique perspective.
3. Think beyond the referral
A connection with an alum is an invaluable gift and the best ones turn into long-term relationships. This is hard to create if you are laser-focused on one objective (i.e., a job).
Approach each connection respectfully, thoughtfully, and with an open mind about what you can learn from this person. They might open your eyes to a new function, industry, or role you haven’t considered before, as well as valuable mentorship and professional guidance that extends beyond one career opportunity.
4. Say thank you and follow up
The importance of gratitude cannot be overstated. Whether it is in person, virtually, on the phone, or over email, be sure to thank any alumni who offered to share their time and experience with you.
Ideally, this is done in the moment and with a follow-up note. Be sure to follow up on any additional leads or information the alum may have shared with you. If they are offering their own network to you, take it seriously and follow through.
Generalists (MBA graduates) vs specialists
While the age-old debate on whether you should be generalist or specialist continues – we’ll evaluate various aspects that employers would take into account while deciding whom to hire.
In today’s fast-paced economy and rapidly changing work environment, transferable skills like leadership, communication, teamwork, ability to multi-task, ability to adjust to any work environment are of utmost importance.
Especially, getting a grasp of issues a business faces, assessing various scenarios and being able to take high-level decisions could be a decisive factor in the profitability and the success of a company.
An MBA graduate is equipped with the knowledge and expertise to hold such key positions.
Having a bird’s eye view of an organisation, insights into its operation, and processes proves to be the greatest strength of MBA grads as they are able to gauge the breadth and depth of an issue.
Due to their ability to connect the dots, they can be successful in strategic decision-making roles.
Innovation can give an organisation an edge over its competitors. Generalist, due to their lateral thinking and know-how of various areas are more likely to innovate.
A generalist can adapt to changes in role or industry, to meet the needs of the changing time, so that the impact of market risk on future career prospects is minimised.
In December 2020, Bill Gates added fresh perspectives to this debate by referring to the book ‘Range: Why Generalists Triumph in Specialized World’ by David Epstein as one of his top choice for 2020.
Bill Gates believes that his own career fits the generalist model; in addition to his passion for coding and computers, he had many other interests and did a lot of reading on a wide variety of topics.
He attributes Microsoft’s phenomenal success to his broad-based thinking than other start-ups of that era as well as hiring not just excellent coders but those with real breadth within their field and across domains.
Generalist vs specialist example
Consider the product development industry. There are various team members with specialized skill-sets and expertise in their own fields – those involved in research and development, technical experts, manufacturing department, quality control (testing), logistics handling, marketing and sales, customer support.
However, for a successful product roll-out, there’s the need for a broader vision, strategic planning, chalking out the perfect roadmap throughout the product life-cycle, working closely with the various departments involved, coming up with a product that addresses customer needs and is aligned with the company’s long-term goals.
This is where the generalist skills – that of the Product Manager comes into picture. This role demands that you possess multidisciplinary skills in various areas including marketing, technology, strategy, teamwork, time-management. Check out the best MBA programs in Product Management.
On the other hand, specialists are surely masters in their own field; they would be in a position to perfectly execute their own jobs.
In the above example, the technical team may do a wonderful job at developing the software.
However, if they’re faced with questions like ‘What is your sales forecast?’ or ‘What is the expected pricing?’ or ‘What would be the right timing for the product launch?’, they may not be able to provide accurate inputs.
Their work doesn’t revolve around managing multiple aspects related to the product, rather their work is concerned with focusing on one particular area.
Highest MBA salary in the US
The top-tier elite business school graduates receive much higher pay packages than others.
Here are the average MBA salaries at some of the top ranked US business school
| Business School | Average salary & bonus MBA class of 2020 |
|---|---|
| Stanford | $176,083 |
| NYU – Stern | $175,148 |
| Dartmouth – Tuck | $173,882 |
| Northwestern – Kellogg | $173,057 |
| Chicago – Booth | $172,683 |
| Cornell – Johnson | $172,254 |
| Harvard | $171,785 |
| Columbia | $171,436 |
| Virginia – Darden | $169,190 |
| Duke – Fuqua | $167,134 |
Source: U.S.News
According to GMAC corporate recruiters survey 2020, MBA graduates still command a premium with the median MBA salary at $115,000, which is 75% more than those with a bachelor’s degree (in Covid Wave I).
Compare this with the average salary in the US after an MS degree which would be $79,344, according to PayScale.
The salary difference is even more pronounced in Fortune 100 companies and the top three industries (finance, consulting and technology) recruiting the majority of the MBA grads.
In the very popular consulting industry, the median salary of MBA grads is double that of bachelor’s degree holders in Covid Wave I.
Highest MBA salary in India
Let’s take a look at the highest and average MBA salary in India at the top internationally-ranked business schools.
The IIM Ahmedabad PGPX class of 2020 reported the highest salary of INR 81 lakhs with a mean salary of INR 33,36,247 (average work experience of around 8.5 years).
At IIM Calcutta, the one-year residential program, MBAEx (earlier known as PGPEX) recorded the highest salary of INR 77.60 lakhs and an average of INR 26.24 lakhs (average work experience of 8.75 years).
At IIM Bangalore, the EPGP program received an average salary of 29.88 lakhs (average work experience of 7.2 years).
At ISB (Indian School of Business), the 80% mean salary for the class of 2020 was INR 25,06,434, the average work experience was much lower at 3.75 years.
The post-MBA compensation is much higher at IIMA-PGPX which sees a more experienced cohort compared to other top programs like ISB.
Compare these figures to the average salary in India after an MS degree, which according to PayScale would be INR 8,39,665.
An MBA grad from some of the reputed top business schools can command a higher salary than others which is evident from the above figures.
An MBA degree can pave the way for a change in career – function, role or industry as well as geography. Business schools usually have dedicated careers team that provide career counselling, guidance, internship and job assistance.
The various networking events can be a great opportunity to connect with potential employers and alumni.
The rich experience you gain from an MBA program can translate into a handsome paycheck you always dreamt of and a fulfilling career!
Salary negotiation tips for career changers
Naomi Sanchez is the Assistant Dean of MBA Career Management at the UW Foster School of Business. MBA Crystal Ball caught up with her to understand what makes the business school so successful when it comes to the salary-to-debt ratio, and what MBA students can do to negotiate higher salaries.
MCB: The average MBA work experience at Foster is higher than the average for the top-ranking 2-year MBA programs. How does that influence the post-MBA compensation statistics?
Naomi: Work experience is one consideration in the mix of hiring criteria. Decisions on compensation for MBA jobs are often determined by what the job requirements are and the mix of experience and qualifications graduates bring to the job. In the end, compensation is determined by several other factors as well as experience.
MCB: Foster ranks at number 1 for salary-to-debt ratio. What are the reasons for that?
Naomi: Foster continues to lead the rankings with competitive salaries, with average starting salary at $125,474 / bonus $36,380.
In addition, being a public school, we work hard to keep tuition competitive and affordable for students, with a focus on learning, outcomes, and enabling students to truly make an impact in the business world.
MCB: What tips do you have for career changers during salary negotiations, when their pre-MBA skills do not have a significant overlap with the new role they’re aiming for?
Naomi: Every graduate has the pre and post MBA knowledge and experience as evidence of their value to a company.
Career changers can highlight the transferable skills and soft skill strengths that apply to the new role.
Emphasize years of supervising, leading, and being promoted into roles of greater responsibility.
The practical experience acquired working alongside MBAs and leaders in companies during the MBA Applied Strategy Consulting Program, Field Studies, and Independent Study opportunities lend themselves towards building functional and industry expertise.
Academics provide the knowledge to be successful and to ramp up in a new job. The core curriculum provides a cross functional view of learning business skills and tools necessary in today’s companies.
A graduate brings old and new knowledge into the company and the MBA provides the additional time to acquire expertise for higher salaries.
Also read:
– Investment banking salary in USA, UK, Canada, India
– Management Consulting Salaries after MBA
– How average MBA salaries grew over time in USA, Europe, Asia
– Top countries for highest MBA salaries
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