MBA Salaries are the World's Highest Postgraduate Salaries

By QS Contributor Updated Jun 15, 2016

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Introduction
Continental Europe
Comparing MBA Salaries by level of higher education
Benchmarking MBA Salaries by Geography
Average MBA Salaries across Regions 2008 (US$)

MBA salaries are the world's highest postgraduate salaries

As employers battle to recruit the best young business school talent, Nunzio Quacquarelli, editor of TopMBA.com, looks at the latest reported salary data. In an era of financial uncertainty and intense global competition, the MBA qualification is becoming a safe haven for young professionals seeking career advancement. And for the first time in history, Continental European business schools are reporting higher average salaries than their US or UK counterparts, although US schools still top the bonus league.The UK's Said Business School at Oxford University tops the list overall with an average salary of US$125,440.Table 1: Averages by region for the 50 business schools reporting the highest MBA salaries in the US and Europe for the Class of 2007RegionAverage base starting salary US$% Accepted employment three months after graduationAverage years work experienceNumber of schools in top 50USA10101692519UK10414992714Continental Europe10524891617Table 1 above reveals that among the US and European business schools offering the highest salaries to the Class of 2007, 19 are in the US, 17 in Continental Europe and 14 are in the UK. Employment rates are similar across all these schools with 92% of students having accepted employment within three months of graduation and the profile of candidates is similar, with an average of six or seven years of work experience. In the 1990s, salaries for graduates of top US schools like Harvard, Wharton and Stanford were consistently higher than their European counterparts. In 2006, UK schools took the lead in average salary terms, but for the graduating class of 2007 it is the Rest of Europe, which takes the honours with an average reported starting salary of $105,248.It's important to note though that the above salary figures do not include the guaranteed bonuses received by many MBAs abd which are more common amongst graduates of US business schools. For the class of 2007, Tuck reported average salary of $107,000 with an average sign-on bonus of $26,000 and average tuition reimbursement of $44,000, resulting in a total guaranteed package of $177,000. Kim Keating of Tuck Business School says early estimates of 2008 figures show the base salary is up slightly from 2007 and the signing bonus amounts appear to be roughly the same." Many MBAs also receive performance related bonuses at the end of their first year which are not included in these figures.

Continental Europe

IMD in Lausanne reports the highest average salary among Continental European schools at $121,000. Janet Shaner of IMD says, "IMD looks for high-achievers and their general management MBA results in many of their graduating MBAs entering industrial and commercial management functions within Europe, a segment where demand is growing rapidly."But it's not just the established business schools producing impressive salaries on graduation. ESMT in Berlin reports an average starting salary of US$116,800 for their 31 students. Ulf Dreier of ESMT says, "we are a relatively young school, founded with 25 corporate partners and these partnerships help ensure our MBA students receive good starting salaries on graduation."Small class sizes, slightly more years of work experience and the strong Euro may go some way to explain why European schools are outperforming their international counterparts, but it doesn't tell the full story. MBA recruiters in Europe are switching to the MBA qualification in increasing numbers. Sarah Thomas, MBA recruiter at Standard Chartered Bank, based in London, says her bank is seeking to double MBA hiring in 2008. Rudi Kindts, HR director of BAT also expects to "dramatically increase MBA hiring in Europe in 2008."

Comparing MBA Salaries by level of higher education

The 2008 QS TopMBA.com Salary & Recruitment Trends Report* confirms that MBAs are the highest paid postgraduate qualification worldwide, across all major industry sectors. The table below compares average reported salaries at each level of qualification for major industry sectors, taking an average of European and North American salaries.Average Salaries in EU and North America, by level of higher educationAverage Salaries in EU and North America, by level of higher education 4 yrs ExpMastersPhDMBA (No masters) Consulting / Prof. Services$66,271$48,500$64,953$101,137Energy$66,461$50,325$60,851$84,701Financial Services / Banking$80,236$43,176$65,682$89,169FMCG$54,898$39,723$50,111$80,209Manufact. / Automotive$71,013$46,720$66,309$90,435Media / Entertainment$63,745$45,430$60,390$97,295Pharma. / Healthcare$74,999$54,321$71,847$96,014Telecoms / High Tech$74,378$42,230$68,480$106,142Transportation/Distribution$60,706$41,376$57,853$82,993Travel/Leisure$61,508$33,550$59,272$86,5Source: <a href="/why-mba/publications">TopMBA.com Recruiter Survey 2008</a>The average MBA salary in consulting/professional services is US$101,137, exceeded only by the telecoms/high tech sector with an average MBA salary of $106,142. These figures compare to an average salary of US$66,271 for a candidate with four years of consulting experience, but no MBA, or US$74,378 for someone who has worked in telecoms for four years. Consulting salaries for fresh MBA hires ranged from a high of US$160,000 and a low of $32,000 in emerging markets. These salaries look unlikely to slacken off, given the forecast increases in demand for MBAs amongst consulting firms over the next few years.MBA salaries in media and entertainment are the third highest in the survey at US$97,295 compared to just US$63,745 for a candidate with four years relevant experience. Salaries for Masters and PhD graduates are consistently below those offered to MBAs.On average an MBA joining a bank will earn US$89,169, compared to US$80,236 for a candidate with four years of banking experience, but no MBA. Banking salaries for fresh MBAs reached as high as US$140,000, among this year's employer respondents and as low as US$25,000 in some emerging markets.As European companies seek to match up to the challenge of competition from the US and Asia, MBAs will play an increasing vital role. KPMG is a world leader in audit, tax and advisory services and in Europe has traditionally favoured accountants to MBAs. Lord Michael Hastings, Global Head of Diversity at KPMG International, says this is changing. "KPMG is constantly working with global clients who are not just saying "here is a tax issue we'd like you to advise us with." They are asking us how they square up in the world where there is conflict, fear, and how shall we function in those areas to best develop our business. The MBA provides a richness of perspective that is not easy to pick up by standard study. There is huge value to MBAs as they have great depth."

Benchmarking MBA Salaries by Geography

The weakening dollar and very strong growth in salary levels in Western European cities have resulted in the Western European Average MBA salary reaching $99,156, compared to $91,283 in North America. North America and Western Europe MBA salaries range between US$80,000 - $110,000 in all sectors apart from retail.Salaries in other regions seem to be converging on those in North America. Asia-Pacific salaries have jumped by over 10% in 2008 to average $83,380 (Australia, Japan, Singapore, Korea, Taiwan excluding data from China, India, Thailand). Latin America salaries are also rising fast, reaching an average of $70,456 in 2008. In all regions foreign multinationals pay MBAs significantly more than local companies.

Average MBA Salaries across Regions 2008 (US$)

US & Canada $91,283 Latin America $70,456 Western Europe $99,156 Eastern Europe $63,675 Asia-Pacific $71,220 Source: <a href="/why-mba/publications">TopMBA.com Recruiter Survey 2008</a>Within countries, MBAs in capital cities and especially financial centres can expect salaries 20% higher than in smaller cities. The UK reported the highest average MBA salary in the 2007 study, at $111,000 with a strong influence amongst London based recruiters.MBA graduates should consider the cost of living when comparing salary packages across regions - the real, versus the nominal wage a company and country offers.The OECD publishes annual research comparing purchasing power between countries (a good proxy for the cost of living). According to the OECD, the purchasing power in Mexico is 24% more than in the US. So, even though the survey reveals that MBA graduates are paid 23% less in Latin America than in North America, graduates working in Mexico will enjoy a standard of living comparative with that of their US counterparts. By contrast, purchasing power in Japan is 36% lower than in the US, so, the higher cost of living will result in a lower standard of living if the same salary is paid as elsewhere.*The QS TopMBA.com Salary & Recruitment Trends Report is published in August each year. A summary of the 2008 Report is available on TopMBA.com to candidates registering for the QS World MBA Tour and other QS forums and events.