Share this article on...
Contact Us
- Report errors or inaccuracies topmba@qsnetwork.com
- Contribute articles contribute@qsnetwork.com
- Advertise advertise@qsnetwork.com
The MBA salary gap increases
As employers worldwide battle to recruit the best young business school talent, there is a growing salary differential between MBAs and non-MBAs.
The QS TopMBA.com International Recruitment Survey and Salary Report 2007, which surveyed 489 international MBA employers, reveals that MBA salaries across most major industry sectors and geographies have increased more rapidly than salaries for non-MBAs with four years of work experience. The report confirms that the MBA is the highest paid postgraduate qualification worldwide. The highest average MBA salary of any sector (EU and North America) is US$99,154, in consulting/professional services, whereas a candidate with four years of consulting experience, without an MBA earns an average salary of US$72,129, or US$77,415 with a PhD.
These salaries look unlikely to slacken off, given the forecast increases in demand for MBAs by consultants over the next few years. MBA salaries in media and entertainment are the second highest in the survey at US$97,295 compared to just US$53,637 for a candidate with four years relevant experience. Only PhDs joining the aerospace/defense industries match these MBA salaries.
On average, an MBA joining a bank will earn US$93,515, compared to US$66,231 for a candidate with four years of banking experience, but no MBA. Many banks and consulting firms are indeed competing for the same talent. Consulting firms are competing by offering higher salaries. However, banks are currently successfully recruiting many MBAs, perhaps because of the larger bonuses they pay, (investment banks in particular) which provide the greatest overall compensation for the first year out of business school.
According to the survey, banking bonuses averaged US$46,000 in 2007, down slightly on the US$55,000 in 2006. Such bonuses do fluctuate, however. In 2001-2004, banking bonuses for MBAs fell to less than US$15,000 per annum.
Overall, the research reveals that in many sectors the gap between salaries for new hires with MBAs and new hires without MBAs is widening year-on-year.
| | % salary premium: new MBA graduate vs. 4 years experience/no MBA |
|
| 2007 (2006) |
| Consulting | 137 (132) |
| Financial services/ Banking | 141 (129) |
| Media/Entertainment | 181 (155) |
| Manufacturing/Automotive | 135 (132) |
| Public sector/Non-profit | 124 (118) |
