Choosing to do an MBA degree is the sort of decision most people will make after concerted deliberation and meticulous planning. A full-time MBA at one of the world’s top business schools can cost anywhere between US$30,000 and US$200,000, depending on the program length and location you opt for, making it a qualification not many candidates would venture to do over.
When proceeding through a checklist of reasons 'for' and 'against' enrolling in the degree, one encouraging point worth penning in is the continued buoyancy of the MBA employment market. Between 2015 and 2016, opportunities for graduates around the world grew by 13%, not far off the long-term average of 15% seen in QS's annual reports since 1990.
It is always useful to get a gist of why people choose to do an MBA over other forms of business education or professional qualification. To help with the ‘pro’ side of your checklist, here are seven of the most common reasons why candidates choose an MBA, based on responses given to the QS Applicant Survey.
1. Career acceleration and career change
It is no surprise that most candidates aiming for an MBA apply because they want to improve their career prospects. Over 63% of respondents to QS’s applicant survey selected this as a principle motivation, with 58% of them citing management or leadership positions as their immediate post-MBA career goal.
The post-MBA career change also appears to be a growing trend, be it deliberate or not. On the premeditated end of the scale, 40% of candidates choose to do an MBA degree because they aim to change the industry they work in, their job function, their location, or a combination of these three. A physician might do an MBA to practice less, and to instead administrate at senior management level. Someone working in corporate finance might utilize an MBA to switch to investment banking.
In cases where the economy or business is disrupted, the MBA qualification can give students greater flexibility by opening them up to more avenues of opportunity. This could explain why as many as two in five MBAs unexpectedly change careers post-graduation, according to a 2017 report from GMAC.
2. The acquisition of new skills
The MBA degree has experienced something of a transformation over the last few decades as top business schools remold their business management curricula to fine tune course contents to the evolving demands of both MBA employers and the global economy. In the past, an MBA qualification tended to have a heavier focus on hard skills and quantitative analysis, in areas such as operations and finance, producing graduates, "seen as bean counters myopically focused on data," says Ed Batista, executive coach and lecturer at Stanford Graduate School of Business.
Four skills that today's MBA employers place particular importance in are; interpersonal, leadership, strategic thinking and communication skills. For the 59% of applicants who indicated that they are looking to acquire new skills, it's comforting to know that it is the top business schools in particular that focus on teaching what's relevant and what's in demand. MBA graduates entering today’s workforce are likely to be better equipped as leaders, communicators and business strategists, because they have a developed soft skillset.
3. Increasing salary potential and return on investment (MBA ROI)
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.
4. Starting your own business
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).
5. Top business schools and growing a professional network
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.
6. The chance to make a difference within an organization
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.
7. The educational value of the MBA qualification and self-development
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.