While MBA salary levels in Central and Eastern Europe remain behind those paid in Western Europe and the US, MBA job prospects look promising within the region.
MBA salaries in Central and Eastern Europe (CEE) average US$47,500 per year, compared to US$85,600 in Western Europe and US$87,700 in the USA and Canada, according to the QS Top MBA Jobs and Salary Trends report. However, even though these differences are quite striking, an MBA increases the chances of putting you in a superior league, as many multinationals in CEE look for strong business abilities and competencies to meet their development needs.
"As our head-hunting activities are consistent in almost 15 countries in CEE, the particularities of salary levels are quite different from one country to another," explains says Oana Datki, country manager for Romania at Consulteam. "In Romania or the Balkans, an MBA is a plus, but it is not automatically expected from all top management candidates.
"Salary wise, the differences between a candidate with an MBA and one without would be around 25% in Eastern Europe," says Datki of ConsulTeam, a group of companies providing recruitment services, training and HR consulting services, as a representative in several CEE countries of Mercer, a global consulting company.
Nevertheless, don't expect to be paid exclusively for the degree, no matter how good the brand of the business school you graduated from.
Valued by companies, the MBA diploma must also be backed with solid skills and experience. Furthermore, one of the first things employers will assess is if you fit within the organization and what value you can bring to the company.
"We are not willing to pay a premium for having an MBA per se, nevertheless candidates holding an international top MBA often have characteristics that we considered highly attractive... For this reason, they are likely to have attractive offers," says Alessandro Trebbi, head of human resources for the international division at Enel, Europe's second largest listed utility by installed capacity.
Among the qualities the company appreciates in MBA graduates, Trebbi mentions the international mindset, a proven track record in education and professional life, the ability to manage diversity, willingness to pursue an international career, general management, plus a transversal and multidisciplinary approach.
The power company adopts a standard for recruiting which is applied to all 40 countries it operates in.
"In general, for each opening, we try to find the best candidate regardless the fact he or she holds an MBA. We hardly launch searches where an MBA is a strict requisite. But for sure, there are jobs where the above mentioned characteristics of MBA graduates fit particularly well," adds Trebbi.
While there are differences in salaries between Eastern and Western Europe, there are also salary discrepancies that appear within CEE, due to the different stages of development of each country.
Russian employers offer the biggest salaries in the region for MBA graduates, which is in sharp contrast with the rest of the CEE economies, since the country recovered rapidly from the recent financial crisis. On the other hand, the high salary level seems well balanced with the cost of living. Moscow, for instance is one of the most expensive cities in the world, ranking fourth among 214 cities covered by Mercer's 2010 Cost of Living survey.
The average salary for MBA graduates in Russia reaches US$71,235, almost double that of average MBA salaries in countries like Bulgaria (US$41,175), Greece (US$36,694) or Ukraine (US$31,733), QS' report reveals.
In Russia, employers in the finance industry reported the most significant hiring increases.
Michael Germershausen, managing director for Antal Russia, an agency specializing in recruiting mid-to-senior management positions, says that the trend in Russia is that companies are paying more attention to the candidates' experience rather than to their education.
"For some positions like heads of marketing, CEOs or financial directors, candidates with an MBA diploma would have an advantage, but the MBA is quite rarely a must and the most important criteria.
"There are some exceptions, of course. For example, recently we have been working on the commercial director position for one of the major media holdings, and the MBA was a must there, because the potential candidate should have had international exposure and also be familiar with business cases," he says.
His opinions are shared by Gregory Pinson, managing partner of the Prague office at the executive search company Arthur Hunt.
"We are evaluating job matching based on competences, including academic background, but without it being a key factor for the hiring decision," says Pinson.
Germershausen adds that, generally, Russian employers are not ready to overpay for an MBA graduate.
"A degree from a Russian business school is not highly valued. It is connected with the opinion that the level of business education in Russia is quite low. Companies prefer managers with an MBA from a European business school.
"On the other hand, specialists with an American MBA are usually too 'expensive' and sometimes overqualified," he says.
However, the situation seems a little different in Romania.
"An MBA will most certainly be one of the factors that would trigger a bigger income. In our head-hunting experience in Romania, the salary expectations would be higher in case of a graduate and it would also impose a higher offer from the hiring company," explains Datki.
One of the particularities of the Romania market is that many professionals choose to go for an MBA after several years of work experience, usually 7 or 8 years.
Romania has a small, but growing, domestic demand for MBAs.
Romanian or international business schools which are present on the local market delivered more than 4,000 MBA degrees during the last 20 years, and this number keeps on rising, with some 350 local MBA graduates every year.
"In respect of the salaries for candidates with an MBA degree, we can identify from our current searches, positions such as chief financial officer, marketing director or sales director, and board level positions – ranging in Romania from €55,000 per year up to €80,000.
"In other more developed CEE countries the ranges are quite similar, but increasing up to €100,000 or even €130,000, which would be [the equivalent salary of] a CEO level in Romania," reveals Oana Datki.
Another growing market for MBA graduates is Poland, where the average annual salary is almost US$62,000.
Some CEE countries are hot spots for MBA jobs, not only in the region, but also worldwide.
MBA job opportunities increased by 22% in Russia last year, continuing the trend of recent years, while in Romania, there was a 26% increase. The most staggering increase came from Kazakhstan, an oil economy, where strong demand in energy and finance resulted in a 65% uplift during 2010, according to the QS Jobs and Salary Trends report.
Graduating from an MBA program usually signifies a promotion, a higher salary or a different job. In fact, the vast majority of MBA graduates expect a larger salary after graduation. Some of them get it, some of them don't. But is it realistic for a MBA graduate to expect an increase of salary once they land a job after graduation?
"The expectation is realistic since MBA graduates want to earn back their investment. But to define the economic value of a candidate you need to go beyond the MBA itself and weigh the proven professional experience and the potential to successfully cover larger responsibilities in highly diversified environments. For this reason, we haven't got an entry salary for MBAs, but we rather evaluate each one on a case by case basis," concludes Trebbi at Enel.