Obtaining a Master of Business Administration (MBA) degree is a significant accomplishment, offering many benefits. The acquired knowledge and training can position the graduate to introduce and implement sound business practices into their career. For many, it’s safe to say that the motivation for pursuing a postgraduate education boils down to the potential of increasing wages, in light of the costs. Specifically, a Master of Business Administration (MBA) degree can open up several career advancement opportunities in addition to providing desired salary increases. For many prospective students, perhaps the greatest concern is whether earning this prestigious degree is cost-effective.
Salary Variations Per Concentration
The average MBA salary varies according to concentration. According to a 2016 study by Poets & Quants, some graduates made close to twice as much as others based on the field entered. Human Resource (HR) majors ranked the lowest with an early-career median salary of $48,400 per year. MBAs specializing in Strategy topped the list, having an average early-career salary of $96,200 per year. Between these two extremes lies other concentrations offering promising returns. For example, general and strategic management have an average early-career salary of $85,200. Corporate finance also fares well with an average early-career salary of $78,100. On the lower end of the spectrum are the accounting and business, accounting, and healthcare management specializations with average beginning salaries of $54,900, $54,000, and $51,200, respectively.
What Is the Average Salary For An MBA Graduate?
The Average Salary
According to PayScale's survey of thousands of MBA graduates, approximately 1.6% of participants had less than one year of work experience and an average salary of $52,872. Those with one to four years of experience (21.8%) had an average salary of $60,779. Additionally, the 32.9% with 10 to 19 years of experience earned approximately $100,283 per year. Based on these results, work experience contributes significantly to an MBA’s salary.
Gender and location are other variables that can skew an average salary. Men on average earn $93,403, while women earn $74,642. In terms of location, California had the highest paid MBA graduates with a median salary of $103,000.
The Bottom Line
Experience and job type are the biggest influencers on compensation. As an employee invests time on a specific career path, it is reasonable to expect progressive increases in salary. Gender and location also play a role in determining the level of pay, although not to the same degree as the two preceding variables. With numerous factors to consider, the question of average salary is based on individual circumstances, usually involving a combination of factors. No education is a waste. With time and effort, obtaining an MBA can provide access to certain career opportunities. It can take the graduate as far as his or her ambition will allow.