Elite MBAs Pay Off

A recent survey of 85 business schools in the U.S. and Canada concluded that individuals who earned MBA degrees from their full-time programs see, on average, a US$500,000 return on their investment over a ten-year period.

ACCORDING TO A SURVEY of 85 business schools in the U.S. and Canada by QS Quacquarelli Symonds, individuals who have earned MBA degrees from fulltime programs at these schools see, on average, a US$500,000 return on their investment over a ten-year period and a $2.6 million ROI over a 20-year period. Their average salary post-graduation is $91,417 (compared to $52,723 pre-graduation). That’s $30,000 more than that of other master’s graduates. Eighty-five percent of full-time MBAs at these schools surveyed are employed within three months of graduation.

To come to these findings, the survey relied on four primary metrics: the return on investment after 10 years, the ROI after 20 years, the period required to pay back the initial investment, and the salary bump after graduation. It included 90 schools from TopMBA’s Global 200, a list of business schools the site has compiled based on surveys of more than 5,600 recruiters and more than 7,100 academics.

FULL-TIME MBA GRADUATES SEE ROIs OF $500,000 OVER A TEN-YEAR PERIOD.

However, does this high ROI lead to more students pursuing MBA education? Yes and no, says Mansoor Iqbal, a higher education specialist with QS Quacquarelli Symonds who focuses on business education.

On the one hand, he says, undergraduates increasingly view an advanced business qualification as a way to secure an advantage before they enter the job market. On the other hand, managers already in the workforce do not want to take time off from their jobs to seek full-time education, making part-time programs more appealing. In today’s market, more students “expect to choose how and when they study,” Iqbal says. Both trends are driving the popularity of flexible part-time and online programs, as well as those that allow students to enroll in graduate business programs directly after they complete undergraduate study.

“Our numbers are showing that there is a growing interest in alternative programs, particularly pre-experience master’s courses. We’re also seeing a growing interest among applicants in part-time formats—everything from online MBA programs to EMBA programs—while the full-time MBA has suffered a slight decline in popularity,” says Iqbal.

But while full-time MBA programs are not seeing the same growth as other models, elite, full-time MBA programs still remain the “pinnacle of business education,” Iqbal adds. The survey also suggests that many employers still value the skills and experience MBAs bring to the table—of employers surveyed, 84 percent want to hire MBA graduates. In addition, 51 percent are looking for graduates with master of management degrees, and 44 percent want those with master’s degrees in accounting. Worldwide, the demand for MBAs has grown at an annual average rate of 15 percent since the QS Global Employer Survey began in 1990.

“The full-time MBA is still by far the most popular format,” says Iqbal. “As our ROI report reveals, an MBA at a good school still offers the strongest returns.”

From the “QS Return on Investment Report—North American Full-Time MBA 2015.” QS Quacquarelli Symonds is a higher ed technology company and creator of TopMBA.com. Download the report, after registration, at www.topmba.com/why-mba/publications/qs-northamerican-business-school-roi-report.