Is going after the MBA salary worth it?
What is an MBA salary? To MBA or not to MBA, that is the question. I was recently asked by a good friend for advice on whether or not they should pursue a Masters / MBA in their field. This is a very smart guy, so of course I was flattered.
The question is one I hear on a regular basis, so I thought a short post might provide a single school of thought in a sea of 1000’s.
Ask 10 execs this same question and you will receive 10 different answers dependent on whether they have the degree or not, individual role, industry etc. Ask 10 MBA’s and you will hear 10 more answers. I think I provided 3 different opinions myself, but it is these different opinions that make this a fun exercise.
I will be really interested to hear what others are thinking in the comments below so please help us out and provide your opinion.
Below are excerpts from BigBrain’s initial email in blue below:
BigBrain: You have always given me great insights and been an incredible help over the past 15 years. So I turn to you, my sensei, for some career advice while I stand here at a crossroads. (I couldn’t help but include this. I said this guy was smart!)
Last week I was accepted to the W.P. Carey School of Business, Masters of Business Analytics program at Arizona State (I know HR Nasty shakes his head at party schools), but this is one of the few and best programs in my field. (HRNasty approves of this use case. Pursuing a post grad degree after 10 years in the discipline puts you in a very different category than the stereotypical “fresh out of school and looking to party in the sun” attitude.)
Up until now, I was getting Director of Analytics type role offers.
The questions I have for you:
- Do you think the 43K investment is worth it? Would you as a seasoned hiring expert place value on candidates that have this credential?
- Would you give a candidate extra consideration if they have an advanced degree in Business Analytics? Would it be a differentiating factor?
- Would this candidate command a higher salary from the jobs market? And if so, what sort of premium above the going rate could/would it command?
Before I answered any questions, I posed a few of my own below. Friend’s answers are in blue.
HRNasty’s Question: What is your long-term goal with your career?
- I’d like to be a VP of Analytics at a small to medium size company within 5 years. I’ve learned from personal experience that big companies are not my cup of tea. I enjoy the fast pace, family environment, in general better culture, and nimbleness of smaller companies. Reflecting back my happiest times were at the smaller companies and although helpful to broadening my skill set and high paying jobs I came home less fulfilled at the bigger Fortune companies.
- Long Term Earnings potential. I’ve read studies that advanced degrees in specific fields can increase lifetime earnings by 400K. How true that is, and I’m not sure.
HRNasty’s Question: Because you are wondering about the $43K, I am assuming that your employer is not subsidizing the education. Who is funding the degree?
BigBrain’s Answer: I will be paying for this entirely on my own.
HRNasty’s comment: My boy has got Moxie!!
Below I list some generalizations knowing that every candidate is different. All candidates have different career goals, financial resources and different levels of academic aptitude. I don’t have a blanket answer for everyone, but the below are a few personal guidelines for those working in all fields except finance. MBA’s in Finance should a no brainer. The below are generalizations and this isn’t an opinion on what you will learn with a post grad degree. This is one HR guys impression as it relates to the hiring process;
- If you won the lottery, or your company was paying for it, I would say go for it regardless of where you work or what you want to do. There is nothing but upside with an MBA that you don’t have to pay for. The MBA salary is nothing in the pursuit of knowledge.
- If your goal is to be an exec at a larger company, I would say to go for it. Look at the “about page” of the types and sizes of companies you want to ultimately want to work for. If the entire exec team holds post grad degrees, you can assume a Masters / MBA will help you long term. 95% of execs at large companies have and MBA. Most VP’s and Directors at Fortune 500 companies hold post grad degrees.
- A post grad is a distinguisher. High school grades will determine what college will accept you. If you get into a prestigious college, you probably had good high school grades. If you got into an MBA program, you probably had good college grades and good LSAT test scores. The MBA is not a guarantee, but it is a indicator of future performance.
- If you want to be an individual contributor or work at a small company, than I am not sure of the benefits as they relate to being promoted from within. There are always folks in an org with an MBA that are not as impressive as those without an MBA. In any company there are employees without MBA’s that will C-R-U-S-H. At a smaller company, where everyone knows who’s who in the zoo, everyone also knows how competent or incompetent everyone is. A MBA isn’t really a differentiator because performance and results are so visible. When you have an internal opening or a new opportunity at a company of 5K or 50K employees, resumes will be reviewed for that opening and the MBA can get your foot in the door. The lack of an MBA can get you weeded out via the “MBA required” bullet in the job description.
- There are folks who feel the lack of an MBA is holding their careers back and believe that the MBA will be the cure all to their career. The MBA is not the cure all to any career and doesn’t automatically land you the MBA salary. You still need to work hard, you still need to speak up, you still need to push your ideas, and get along with everyone in the face of adversity. If a shy and quiet employee is not wired to push boundaries and move out of their comfort zone, a post grad probably isn’t going to make a difference. A post grad degree may get your foot in the door, but you still need to perform and execute at each successive level for the MBA salary.
BigBrain’s Question: Would you give a candidate extra consideration if they have an advanced degree in Business Analytics? Would it be a differentiating factor?
HRNasty’s Answer: If the candidate receives extra consideration it will be because the hiring manager asked the recruiter to list an advanced degree as a requirement in the job description. If the job description does NOT list a post grad degree as a requirement, the MBA will not make a candidate a shoe in. There are folks that carry themselves well and those that don’t. Some have the post grad degrees and some do not. The MA / MBA makes shiny candidates look shinier. This particular badge won’t shine up a rusty candidate.
The MBA is not like a great cigar which makes good times better and bad times not so bad. An MBA will make great candidates better, but it won’t make bad candidates not so bad. It makes great candidates SUPER desirable.
I could show you a number of candidates and you would ask, “That guy has a post grad degree? Seriously? I hope he isn’t being paid the MBA salary”.
BigBrain’s Question; Would this candidate command a higher salary from the jobs market? And if so, what sort of premium above the going rate could/would it command?
A shiny candidate with a post grad where the degree can be leveraged is more desirable. But we need to have the guts, diplomacy and negotiation skills to leverage the degree. There are plenty of candidates that would be too timid to leverage an advanced degree as a negotiation tactic. A candidate with an advanced degree that is a savvy negotiator becomes VERY shiny and desirable. You mentioned you want to work in a smaller company. The revenue of the company may constrain the salary, but an additional equity component can probably be justified.
The reason an MBA has the potential to be more valuable is that the skills that come with the post grad have the potential to make a difference to the bottom line. That is where the leverage comes from. Being in HR, I am not going to add measurable and quantifiable dollars to the bottom line. I can save dollars, I can increase retention, I can make the company attractive to employees, but I am not going to be a revenue generator. Because you are in BigData / Analytics and I have seen the effect you have on the bottom line, you can make a very strong case for yourself, AKA MBA bling, MBA salary.
MBA’s tend to reinforce credibility for really smart, articulate candidates. These candidates were probably very smart and articulate before the MBA, but it does check the box, it does add a trust signal and the folks around you will perceive you differently. The MBA can probably be leveraged to a stronger offer letter, but after that, we still need to live up to it’s expectations and provide additional value.
What other thoughts are there around the MBA and the MBA salary? I know a lot of readers have post grad degrees and we are curious to hear from you.
See you at the after party,
nasty: an unreal maneuver of incredible technique, something that is ridiculously good, tricky and manipulative but with a result that can’t help but be admired, a phrase used to describe someone that is good at something. “He has a nasty forkball”.