Business professionals who earn an MBA reap benefits for their hard work. They assuredly earn a higher income and take the fast track to improved career opportunities. An awareness of the factors that affect salary and job options helps prospective students plan for success.
Increased Earning Potential
According to the September 2014 Salary Survey compiled by the National Association of Colleges and Employers, the average starting salary for four-year business graduates is $57,000. Forbes indicates that following re-entry into the workforce, MBA graduates typically earn an average of 41-50% higher salaries than undergraduates.
Over a lifetime of employment, the difference in salaries between people with varying levels of education is staggering. The U.S. Census Bureau reported the following average lifetime salaries:
- High school graduates: $1.2 million
- Graduates with bachelor degrees: $2.1 million
- Graduates with master’s degrees: $2.5 million
In addition to higher salaries, graduates enjoy increased opportunities for upward mobility whether they earn an online MBA or a degree from a traditional university. Employees who hold a bachelor’s degree sometimes work their way past middle management positions. However, many companies place a greater value on the knowledge and skills gained in an MBA program and thus require an advanced degree for their most critical positions.
MBA graduates find work across all business fields. The Business School Edge states that consulting, finance, energy, and health sectors reward MBA graduates with six-figure salaries, while nonprofit and government positions command salaries averaging $73,000.
Factors that Affect Hiring and Salary
According to Campus Explorer, the following factors affect the hiring decisions and salary offers of companies:
- Business school’s prestige
- Prior work experience
- Concentration of MBA degree
- Network of business colleagues
Business School’s Prestige
Name recognition is important to companies, and job candidates who attend Ivy League and highly ranked selective colleges for graduate school often command higher salaries. Bloomberg reports that MBA graduates from Stanford and Harvard earn an average of $126,000 per year following graduation. Larger employers and companies with offices in major metropolitan areas often prefer graduates from more prestigious programs.
Prior Work Experience
MBA graduates earn more depending on their earlier work experience. The American InterContinental University reveals that the starting salary of someone with management experience and an MBA typically earns more than a new graduate without a similar professional background.
Concentration of MBA Degree
Companies offer higher starting salaries to MBA graduates who specialize in a particular concentration. Business schools increasingly offer specialized programs in areas such as real estate, biosciences, and investment management, creating opportunities for students to focus on a narrow area of interest.
A Graduate’s Professional Network
A business professional’s connections positively influence job search efforts or daily business transactions. Successful MBA graduates who actively network bring added value to a company compared to those who lack this skill.
Today’s MBA student invests time and money to earn an advanced degree that will propel his career forward and income higher. Adopting a strategic approach to career building increases an MBA graduate’s skill set and earning potential.
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