If you’ve done your research on your MBA, chances are you’ll already have heard about the MBA ‘bump’. This is the unofficial but widely used term used to refer to the salary increase you can expect to receive after completing your degree. Of course, nobody would send their time and money on MBA courses unless they were beneficial in the long term, but how much is your MBA really worth?
According to the GMAC 2012 Global Management Education Graduate Survey, the bump received by graduates from the class of 2012 was more significant than it has been for many years. Full time MBA graduates reported on average increases of 81 per cent from their pre-MBA salaries and even part-time MBA students reported a 53 per cent rise.
The GMAC survey showed that graduates with the least work experience were served the highest pay increase, with those with less than three years’ experience reporting a whopping 120 per cent pay increase. This is in comparison to those who had over six years’ experience in the workplace, who reported an average of 46 per cent salary increase.
These figures reflect the high value that is placed on the MBA process, and how important it can be to your future career options and earning potential. If you are thinking about signing up for an MBA, it is important to remember that not all students are equal and that there are many other factors which could affect your ‘bump’.
1. Your work experience: Work experience is a two-pronged sword. On the one side, a student with little or no work experience who graduates at the same time as someone with a good level of work experience will find it harder to get a job, and will probably get less of a bump than their peer.
On the other hand, a student who returns to education for their MBA after being in the workplace for some time may already be in a high-paying position with their company, therefore any salary increase they receive will be proportionally less.
2. Your connections: If you are on an internship with a big company while doing your MBA, and you know you’ll be offered an executive position with that firm upon completion, you stand a much better chance of a significant ‘bump’ over your classmates who have no business connections at all.
3. Your business school choice: Choosing a good business school is critical to your future success and potential earnings. Graduates from Harvard Business School in the US expect to be employed in positions in excess of $100,000 per annum, whereas students from universities that have never been heard of will not fare quite so well. Choose a high-ranking business school to get the most benefit.
4. Your specific degree: MBAs are not all the same, and you’ll be asked to focus in on your specialism, which will have a bearing on the industry you go to work in afterwards. As a general rule, the more specialised your niche is, the higher the salary you can command.