MBA Salary: Expectations vs. Reality

MBA Salary

QS produces several pieces of annual MBA research, among which are the Applicant Survey, which looks at the expectations, ambitions and demographics of MBA applicants, and the Jobs & Salary Trends Report, which as the name suggests, surveys actively hiring MBA employers to identify the latest trends in MBA salary levels and hiring.

In terms of salary, the 2013/14 editions of these reports yielded some interesting findings. The Jobs & Salary Trends Report revealed that MBA salary and bonus levels were on the up, with employers in every region except Central/Eastern Europe, compensating their hires more generously when salaries and bonuses were taken into account (salaries in the US & Canada dropped slightly, but this was offset by increased average bonus levels).

However, the Applicant Survey showed that the salary expectations of MBA applicants have largely gone done, with every region except Western Europe – in which the rise in salary expectations can be fairly described as nominal. So, strangely, MBA salary levels and salary expectations seem to be heading in opposite directions.

Salary expectations vs. reality

However, the story is not that simple. While salary expectations have dropped, the average global figure is still high, at US$113,000 – down from US$126,500 the previous year. It should also be noted the latter figure is a record high, as MBA applicants regained confidence after the recession, so any drop from this figure must be taken with a pinch of salt.

This year’s average figure is still higher than the average compensation levels on offer in any region, according to the Jobs & Salary Trends Report. The highest average MBA salary is offered by employers in the US & Canada, who pay a combined salary and bonus of US$109,191.

Of course, this varies by industry. In the US & Canada and Western Europe the average bonus and salary for those working in the metals/mining sector stands at US$191,200 and in pharmaceuticals, at US$123,050. However, consulting salaries stand at US$89,150 with a bonus of US$15,050 taking the total to US$104,200 (it must be noted that top firms will offer more). In financial services, the equivalent is US$107,450 (US$95,350 and US$12,100). So, it seems that MBA applicants’ salary expectations are still generally high.

It is worth considering the figures by region too. Though many MBA applicants do not intend to work in their home region – wanting to work in a country is an increasingly important factor in business school choice, the Applicant Survey reveals – many do. Salary expectations will also be shaped by local MBA salary levels.


Average salary and bonus

Average target salary

Africa/Middle East



Asia Pacific



Central/Eastern Europe



Western Europe



Latin America



 Sources: 2013/14 QS Jobs & Salary Trends Report & 2013 QS Applicant Survey


Almost across the board, we can see that expectations exceed reality. The research does not reveal the target industries of these applicants by region, but it is clear that the headline grabbing salaries on offer in lucrative fields like consulting and financial services have obviously permeated the consciousness of MBA applicants.

Latin America – the bottom region in terms of MBA salary – is the only region in which actual salaries outrank expectations.

MBA Return on investment

Though in many quarters expectations are not being met, the MBA remains one of the world’s leading qualifications in terms of return on investment, says Nunzio Quacquarelli, managing director of QS and author of the report.

“On average, MBA applicants are earning in the region of US$40,000. If we take the tuition fees of a two year program in the US to be around US$100,000, and take into consideration the opportunity cost of two years’ foregone salary and the added investment in books and accommodation, [we can then weigh these up against post MBA compensation]. The average in the US is about US$110,000 and the equivalent in Europe is US$105,000. Now, if you imagine that you’re a 28 year-old and you’re going to be working for another 25 years, with your salary growing at an average compound rate of 7% per annum. After three and half years you’re going to be in the black. The net present value on your investment of US$100,000 is probably going to be US$2 or 3 million over your working life.”

The opportunity cost of a one year program, he adds, is even lower, with a payback period of closer to two and half years. So the return on investment, for someone who is starting from an average salary level cannot be denied. Of course, other factors come into play – industry sector, the prestige of the school attended, personal issues – but one is certainly equipped to do better.

But this focus on whether very high MBA salary levels are meeting slightly higher salary expectations is perhaps oversimplifying the matter. The MBA return on investment is about much more than just salary figures.

Many a candidate, for example, will want to change careers – 43% of respondents to the Applicant Survey cited this as their reason for doing an MBA. “The MBA is a very flexible qualification so it’s very good for career changes,” reflects Quacquarelli – adding that it can also be good for those who are looking to change function or geography, or a combination of the three. He adds a word of caution, though. “If they’re looking to change geography, location and industry, that might be a step too far. But, the MBA has proven to be a very successful qualification for career changes.”

And then there are the other benefits of the MBA cited by applicants – learning new skills, network building or just the possession of a new skill set and knowledge – that cannot be quantified. So while there may still be a gap between target and actual salaries, and it’s worth reiterating that the latter are still desirable, the fact is the MBA still pay.

Click here for the most recent MBA Salary: Expectations and Reality article. 

Written by Mansoor Iqbal

Mansoor is a contributor to and former editor of He is a higher and business education specialist, who has been published in media outlets around the world. He studied English literature at BA and MA level and has a background in consumer journalism.

Log in from the top right-hand corner or click here to register to post comments