To MBA or not to MBA? MBA salary demystified.

To MBA or not to MBA? What is an MBA salary worth?

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 Master’s / MBA in their field. This is a very smart guy, so I was flattered.

The question is one I hear regularly, so I thought a short post might provide a single school of thought in a sea of thousands.

Ask 10 execs this same question, and you will receive 10 different answers. A lot depends on whether they have the degree, individual role, industry, etc. Ask 10 MBAs, and you will hear 10 more answers. I think I provided three different opinions myself, but these different opinions make this a fun exercise.

I will be interested to hear what others are thinking about the comments below, so please help us out and provide your opinion.

Excerpts from BigBrain’s initial email in blue 

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 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:

1. Do you think the 43K investment is worth it? Would you, as a seasoned hiring expert, place value on candidates who have this credential?
2. Would you give a candidate extra consideration if they have an advanced degree in Business Analytics? Would it be a differentiating factor? 
3. Would this candidate command a higher salary from the job 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.  The friend’s answers are in blue

HRNasty’s Question: What is your long-term goal with your career?

BigBrain’s Answer:

• 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 assume your employer is not subsidizing the education. Who is funding the degree?

BigBrain’s Answer: I will be paying for this entirely alone.

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 academic aptitudes. I don’t have a blanket answer for everyone, but below are a few personal guidelines for those working in all fields except finance. MBA’s in Finance should be a no-brainer. The following are generalizations, and this isn’t an opinion on what you will learn with a post-grad degree.  This is one HR guy’s impression as it relates to the hiring process;

Who’s paying?

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. 

I want to be an executive

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 an 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 have good high school grades.  If you got into an MBA program, you probably had good college grades and LSAT test scores.  The MBA is not a guarantee but an indicator of future performance.

If you want to be an individual contributor or work at a small company, then I am not sure of the benefits related to being promoted from within. There are always folks in an organization with an MBA who are not as impressive as those without an MBA.  In any company, there are employees without MBAs 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. An MBA isn’t a differentiator because performance and results are so visible. When you have an internal opening or a new opportunity for 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.

Not a cure-all

Some folks 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 shoo-in. There are folks that carry themselves well and those that don’t. Some have 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 several 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 degree where the degree can be leveraged is more desirable.  But we need the guts, diplomacy, and negotiation skills to leverage the degree.  Plenty of candidates would be too timid to leverage an advanced degree as a negotiation tactic.  A candidate with an advanced degree who is a savvy negotiator becomes VERY shiny and desirable. You mentioned you want to work for a smaller company. The company’s revenue may constrain the salary, but an additional equity component can probably be justified.

An MBA can be more valuable because 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 will not add measurable and quantifiable dollars to the bottom line. I can save dollars, increase retention, and 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 your effect on the bottom line. You can make a strong case for yourself, AKA MBA bling, MBA salary.

MBAs tend to reinforce credibility for brilliant, articulate candidates. These candidates were probably brilliant and articulate before the MBA, but it does check the box. An MBA does add a trust signal, and the folks around you will perceive you differently. The MBA can probably be leveraged into a stronger offer letter, but after that, we still need to live up to its expectations and provide additional value.

What are other thoughts on the MBA and the MBA salary? I know many readers have post-grad degrees, and we are curious to hear from you.

See you at the after party,
HRNasty

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 good at something. “He has a nasty forkball”.

Subscribe here to ditch the corporate ladder and take the elevator. I promise no spam,