The stats speak for themselves when it comes to why the MBA is coveted. Kaplan Business School did a survey wherein 86% of respondents from a sample of 959 employers worldwide hired MBA graduates in 2016 and planned to do so in 2017. This is in stark contrast to 2009, where only 50% of similar respondents hired MBA graduates. This staggering growth over a comparatively small seven year period illustrates the demand for higher business acumen across disciplines.
It’s also reflected in pay. An MBA hire in the US can reasonably expect a starting salary between roughly $69,000 and $167,000 pa in AUD. The Australian Institute of Management concurs with these figures, with business graduates in general being among the highest paid at a median $95,000 AUD pa. As world economies become more saturated with skilled labour and the entrepreneurship to accommodate for it, so too will the need for effective business administrators rise.
This is an opportune time for an MBA. What makes it a decision worthy of further consideration are the sacrifices it requires.
MBA programs are attractive due to their part time options, which are highly convenient for full time professionals. However, the price of this convenience is a far higher chance to fail. A Grattan Institute report found that students enrolling part time only have a 50% chance of completing their program, as opposed to the 80% chance enjoyed by full time students. The significance of this figure cannot be understated; there are undoubtedly a great deal of very accomplished, intelligent students among the 50% failing to complete their programs. What then becomes of students of average aptitude or time management ability? Granted, MBA students are required to be professionals with industry experience to enter, which is entirely unlike most other degree programs. It’s nevertheless worth consideration. No matter the origin of this phenomenon, completion could be decided on the back of a coin flip.
Another worthy consideration is the opportunity cost. Time spent in classes on Friday evenings or weekends and doing projects off-campus could be spent on developing industry specific niche skills. A database manager could earn a certificate in cyber security to protect their infrastructure, for instance.
The time could also be spent building side-ventures and earning business experience that way. The time investment may seem worthwhile given aforementioned economic advantages, but potential for growth can be higher in independent ventures.
Disregarding economics, time is a precious commodity that can be spent with loved ones or hobbies rather than work. Focussing entirely on business prospects when considering how best to live is potentially an all-consuming habit. A part-time MBA is four years of each weekend being consumed with classes and assignments, with full time work throughout the week. That’s not an easy commitment for anyone.
There is also the rigorous application process. Aspirants must take the GMAT and achieve a high score, which is preceded by extensive study and preparation. Exceptionally competitive programs require high scores, which could take multiple attempts to achieve. In addition, it costs $339.91 AUD per attempt, making each mistake costly in more ways than one. Needless to say, there’s much work to be done before even setting foot into an MBA.
The degree itself also costs around $51,000 AUD on average, with some programs priced over $90,000. Higher end programs like the senior executive MBA can be over $120,000, more than sextuple the $22,000 average cost of a bachelor’s degree. Graduates need to therefore expect a significant return on investment before committing. One way to do this, aside from comparing current salary to the salary of careers accessible upon completion of an MBA, is to determine the personal relevance of skills it provides. For instance, a software engineer might want to build a tech startup, so looks up the University of Sydney’s MBA. A brief overview of course units reveals learning to include financial management, operations management, managing people and more. These three examples alone aren’t traditionally taught throughout the course of undergraduate software engineering, so could be of great use to a STEM entrepreneur.
There is no simple way to determine if an MBA is right for you, but at a minimum, you should be able to answer an emphatic ‘yes’ to at least one of the following questions:
Answering these can require some extensive introspection, but it’s worth the effort. Although there might be more questions specific to your life, resolving these five problems will be of great assistance in understanding if the MBA is right for you.