The MBA Degree: Is It Really Worth It?
Source: John A. Byrne Fast Company & Business Week Former Editor
Year after year, it’s the question asked by hundreds of thousands of people around the world: Is the MBA degree worth it?
Does it really make sense to quit a job you already have, interrupt your life for two years and assume a debt burden that can often exceed six figures for the MBA?
Many strongly believe it’s only worth the time and expense if you can get into a Top 10 business school. Others see much value in a far broader range of MBA programs. And a fairly good percentage have crunched the numbers to conclude they’re better off staying put and climbing upward in the companies that already employ them.
Yet, at least once a year the Graduate Management Admission Council will ask business school alumni how they would answer the question and inevitably they affirm the degree’s powerful value. The most recent survey, published today (March 16), takes into account the views of nearly 21,000 alumni from 132 business schools around the world. In other words, many of these alums are from schools that are not remotely considered elite or even prestigious.
Still, the vast majority of MBA and other graduate business degree holders rate the value of their degree highly (94%), report high degrees of job satisfaction (83%), and say their expectations for the financial return on investment of their graduate management education were met or exceeded (79%). In general, the percentages of alumni reporting satisfaction with their business degrees, jobs, and careers increased the longer they have been out of school.
The research is conducted by an organization which is devout in its advocacy for the degree. After all, almost all the people who apply and enroll in an MBA program must take the Graduate Management Admission Test (GMAT) which is administered by the organization. Still, GMAC’s research reports are widely considered to be highly credible and authoritative, even if the organization sometimes downplays the less-than-positive news in them.
Even so, there’s no question that alumni across decades affirm the value of a graduate management education.Based on survey responses from nearly 21,000 business school alumni living across the globe—who completed their degree programs in the 1950s up through the most recent class of 2013—the vast majority of alumni (83%) report their graduate management education was essential for obtaining employment. In addition, eight of every ten business school alumni report that their graduate management education has been influential in their career progression since earning their degrees.
Alumni overwhelmingly rate (94%) their graduate management education as offering good to outstanding value compared to the total monetary cost invested in their degree programs. Moreover, the perceived value of a graduate management education appears to increase over time, as 91% of alumni who graduated in 2010–2013 consider their education a good to outstanding value, compared with 95% of graduates from class years 2000–2009, and 98 percent of alumni who graduated from 1959 through the 1990s.
A quarter (26%) of alumni report their expectations for recouping their financial investment were exceeded and 53 percent say their expectations for return on their investment (ROI) were met. Not surprisingly, the report said, the further away from graduation, the more likely alumni feel their expectations were exceeded. Nearly half (48%) of alumni who graduated prior to 1980 say their ROI expectations were exceeded, compared with 38% of those who graduated in the 1980s, 33% of those who graduated in the 1990s, 26 percent of those who graduated in class years 2000–2009, and 16% of recent graduates (2010–2013).
In addition, the report found, the vast majority of alumni (94%) would still pursue a graduate management degree knowing what they know today. Alumni furthest from graduation are slightly more likely than recent graduates to report that they would still have pursued their degrees—91 percent of graduates from class years 2010–2013 would still have pursued the degree compared with 96 percent of alumni who graduated prior to 1990, 97 percent of the alumni from the 1990s, and 95 percent of alumni from class years 2000–2009.
Reasons behind the strong positive assessment of the value of a graduate management education are multidimensional and span all aspects of alumni’s personal and work lives. Business school alumni report that their graduate management education was personally rewarding (94%), professionally rewarding (90%), and financially rewarding (77%), a finding consistent with previous results of GMAC alumni research.
As one survey respondent told GMAC, “Getting my MBA ranks near the top of my life-changing experiences, along with having kids, a house fire, and growing up in Africa.”
Alumni assessment of the value of their graduate management education remains high, no matter what their present employment status. Overall, 94 percent of alumni currently working for an employer rate the value of their graduate management education as good to outstanding, compared with 95 percent of self-employed alumni, and 83 percent of alumni seeking employment.
The ultimate test of satisfaction, perhaps, is whether an alum would recommend their school to others. Some 95% percent of alumni said they would recommend their graduate business program to others, and 96% are proud to have attended their graduate business program, the report found.
As one alumnus told GMAC, “The friends I have from the program are lifelong friends and we have provided career guidance, life coaching, friendship across the miles for each other…We provide each other with networking opportunities and business opportunities as well as career counseling, even if I am in Asia, and they are in US, and work on non-profit groups together.”
That’s a pretty strong vote of confidence.
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