Why Get an MBA Degree?

Students very naturally want a return on their investment (MBA ROI), yet, fewer than a third (30%) of QS’s applicant respondents cited an increase in salary as a primary reason for doing an MBA. “Salary is still a driver, because candidates want a return on investment, but personal values come into play a great deal. People want to work for companies they admire and with which they share values,” states Isabella Pinucci, career service coordinator at SDA Bocconi School of Management.

Calculating the financial side of your MBA ROI isn't a precise science and does depend on numerous factors, such as the wage forgone when you leave your existing job to study, the cost of the MBA program you finally choose, measured against the salary you will achieve as a graduate.

The large majority of candidates do earn a higher salary post-MBA, according to QS’s 2015 research into MBA ROI. In North America, for example, students recoup the cost of their full-time study within a 44-month period on average. In Europe, where programs are often a full year shorter than their North American equivalents, that figure drops to 30 months. On the basis of QS’s extensive analysis, the average pre-to-post-MBA salary uplift for full-time students in Europe is a healthy 84%, while in North America, this figure stood at 75%. Again, it's important to factor in the differing program lengths and class profiles between your options in these two regions when considering MBA ROI calculations.

Around 31% of applicants choose the MBA degree because they are thinking of setting up their own business and would like to develop the entrepreneurial expertise to be able to launch their project with some level of confidence. Specializations in entrepreneurship are offered by many top business schools, and more institutions seem to be catering to student demand by building innovation hubs and startup labs where experts can support and guide, and peers can brainstorm. One of the better-known MBA success stories today is that of William Shu. He graduated from Wharton in 2012 and set up his food delivery business (Deliveroo) in 2013, a company that is valued at over US$1 billion today. (Read more about William Shu and other notable MBA alumni here).

Half of applicants include building a professional network among their primary reasons in applying for an MBA, a motive that is arguably very shrewd indeed. It is estimated that as many as 85% of today's jobs are filled through networking. Most, if not all business schools judiciously promote the sizes of their alumni network, and advertise it at as a key selling point on their websites. Of course, the more elite the business school, the more prestigious the network.

There are companies and organizations that are willing to part or fully sponsor their employee's MBA study. Part-time, online and executive MBA program formats all enable students to work and study in parallel. Much of what is learned in a classroom setting can then be immediately applied in the workplace, allowing candidates to make an impact on business operations as early as week one (to the likely approval of senior management).

Of course, not all students wanting to make a difference within their organization are sponsored by their employers - many will be self-funded. An MBA qualification can be a means to earn promotion, or to develop and hone expertise to the point that it accelerates a business' drive forward.

Self-development and the educational value of an MBA qualification are important to the great majority of us. In QS's applicant survey, these are the primary motivators for 28% of applicants. An MBA isn't purely a qualification on paper, it is the entire student experience; the skills and new information learned, the people and faculty met along the way, relationships and knowledge that can offer career leverage in the short term, and which can also contribute towards an MBA graduate's success throughout a lifetime.