New Insights into MBA ROI Uncovered in Alumni Survey

Around half of the survey’s respondents also supplied GMAC with details of their salary. From this, the study calculates that postgraduate business school alumni stand to earn an average of US$2.5 million in base salary over the 20 years that follow their graduation. That equates to earnings of US$125,000 each year although, in reality, the methodology uses a compound annual growth rate (CAGR) to track salary rises over two decades.

It is, of course, an estimate – as are those made in QS’s MBA ROI reports – but the study concludes that, over two decades, a postgraduate business degree brings alumni US$500,000 more in earnings than those who hold no such qualification yet still acquire a 5% rise in salary each year. If the annual salary rise is just 3%, the difference doubles to US$1million. These figures resemble those found by QS less, but then they are applicable to all forms of an MBA and indeed, various specialized master’s degrees in addition to the full-time MBA.

Alumni reporting salary levels to GMAC’s survey are spread across a wide range of graduation years as well as programs – 48% are recent graduates, having left business school no earlier than 2010, while 34% graduated in the decade prior to this and the remaining 18% before the turn of the millennium. Therefore, average salary figures by country are somewhat different to the immediate post-MBA paychecks summarized in QS’s annual report into MBA jobs & salary trends. Even so, there are some familiar countries at the top of the earnings table.

Alumni working in Switzerland had the highest average earnings, at a median of US$185,000, ahead of the US$145,000 and US$140,000 figures reported by those in Singapore and Australia, respectively. Alumni in the US – where by far the biggest pool (71%) of the sample’s respondents are working – weighed in with an average of US$125,000, a figure matched by those working in Japan and Germany, but above the US$115,000 seen among those working in the UK.

Despite the quicker payback times on shorter or more flexible forms of MBA study, alumni of two-year full-time MBA degrees were more likely to describe their program as financially rewarding. A substantial 82% of two-year alumni said their MBA was financially rewarding as opposed to 74% of one-year MBA alumni. Vindication of a program’s financial rewards dropped further among EMBA (71%), part-time (69%) and online (62%) graduates.

A 20-point gap from the highest to lowest results here is quite notable, even if positive responses remain a majority across each format. Yet, intriguingly, online MBA graduates were ever so slightly more likely to recommend their business school to others than alumni of the two-year format. GMAC’s study reports a net promoter score (NPS) of +48 among two-year alumni, but one of +51 among online graduates. The score among EMBA graduates is higher still, at +57. One-year MBA and part-time program alumni bring up the rear in this instance, with NPS’s of +41. (As a benchmark for a scale which runs from -100 to +100, an NPS of +50 is held to be excellent).

Of course, wishing to recommend a specific school to a colleague or friend isn’t quite the same thing as being satisfied with what you took away from your program of study. Among all GMAC’s alumni respondents, 73% said their qualification led to faster career advancement, 80% said it helped them to develop leadership potential and 81% said it increased their earning power. These findings may well be of some reassurance to those weighing up whether the decision to take an MBA is right for them and not one they’d live to regret – indeed, just 7% of alumni in this sample said they would not pursue their degree again, given the option to turn back time.