In response to a 2021 Harris Poll, 50% of workers said they were interested in changing careers. One increasingly popular way to facilitate that is to earn a Master of Business Administration (MBA).
Applications to MBA programs rose 2.4% in 2020—and an additional 0.4% in 2021—according to figures from the Graduate Management Admission Council (GMAC).
What makes an MBA for career change appealing? Comparing costs and benefits shows that an MBA can provide a substantial return on investment (ROI)—not only in financial terms but also in career opportunities, advancement, and satisfaction.
The Financial Return on an MBA
Pursuing an MBA often requires a significant financial investment. The average cost is $72,200 at public universities, according to a 2022 survey by ZDNet. At private business schools, the cost can surpass $200,000. Total tuition for Washington State University’s Online MBA program costs between $32,328 and $46,696, depending on the foundation coursework needed.
But in a 2021 GMAC survey, 87% of alumni reported a positive financial ROI. A look at an MBA’s potential benefits, in the form of increased compensation, suggests why.
Salaries for MBA Graduates
The median annual starting salary of a worker with an MBA is $115,000, according to a 2021 survey of corporate recruiters by GMAC.
By comparison, GMAC reported that business graduates with bachelor’s degrees earned a median of $65,000.
Over the course of a 34-year career, GMAC calculates, that difference adds up to an additional $3 million for MBA graduates.
Calculating Financial ROI
How can a prospective student calculate an MBA’s financial return? A rough method is to compare the cost of the degree with potential starting salary.
By that measure, for a new graduate, an MBA might pay for itself in the first year, with a positive return of 59%.
In practice, several other factors could affect financial return, such as whether a student attends school on a full- or part-time basis and whether they take out loans. For more precise estimates, a student can use online ROI calculators.
Calculating Financial ROI for a Career Changer
An individual changing careers can calculate ROI by subtracting their current salary from their projected salary with an MBA.
For example, if a worker with a bachelor’s degree went back to get an MBA, the difference in median salaries would be $50,000. By that measure, the MBA would pay for itself after two years, with an ROI of 38%.
Using an MBA for a Career Change
An MBA can also offer non-financial returns. According to a 2022 GMAC report, 51% of MBA students are seeking to switch careers. Several features of an MBA program can help:
Graduates can apply the skills they learn in an MBA program in any kind of business. That versatility is reflected in the top five industries in which they plan to work, according to the GMAC study:
- Financial services
- Investment banking and asset management
- Consumer products
An MBA can open up a broad range of career paths, from overseeing entrepreneurial startups to leading Fortune 500 companies.
At the entrepreneur level, the GMAC study reports that a third of students want to work for themselves or work for a startup. An MBA helps by educating them about the many facets of running a business.
At the other end of the spectrum, 24% hope to become CEOs. They’ll be in good company. In 2019, 31 of the top 100 CEOs in the Fortune 500 had MBAs, according to CEOWORLD Magazine.
Work and Study
An MBA career change doesn’t have to mean a break in employment. Many online MBA programs offer part-time options that let a student pursue a degree while working in their current job.
Having an existing job can work to a student’s benefit. It can help clarify their career goals while offering practical opportunities to apply principles they learn in the program.
Advancing Your Career With an MBA
Besides facilitating a career change, an MBA can help accelerate a professional’s progress in their current field. In a 2022 survey, 68% of MBA graduates told GMAC that the degree helped them advance in their careers more quickly.
Corporate recruiters agree. In a 2021 GMAC survey, 68% of recruiters said their leaders tended to have graduate business degrees, while 54% called the degree a fast track to leadership.
Several features of an MBA program can speed up career advancement:
- It teaches higher-level skills needed for senior positions, such as strategic thinking and communications.
- It educates students in a comprehensive array of business fundamentals, such as finance, marketing, analytics, and management.
- MBA programs include networking—with executives, faculty, and other students—that can lead to career opportunities.
Finding Job Satisfaction With an MBA
Another potential non-financial return from an MBA is job satisfaction. In the GMAC survey of graduates, 72% said the degree helped them achieve personal goals as well as business goals.
What accounts for that level of satisfaction? A 2019 survey of MBA graduates by TransparentCareer identified a variety of factors:
- The quality of their coworkers
- High flexibility and sense of balance
- Chances for career advancement
- Salary and benefits
- Opportunities for training and development
The study also explored the industries and job functions that MBA graduates found most satisfying, including:
- Venture capital
- Private equity
- Pharmaceuticals, medical devices, and biotech
- Consumer products
- Technology, the internet, and e-commerce
Explore the Payoffs of an MBA for Career Change
For professionals interested in changing careers, an MBA offers numerous payoffs: financial ROI, job satisfaction, and faster tracks to senior management. A program like the Online MBA at Washington State University can equip students with the core skills to achieve those returns, running businesses large or small.
The program curriculum covers fundamentals such as operations, accounting, information systems, and strategic planning while offering specializations in finance, marketing, international business, and hospitality. Learn more about how WSU can help you embark on a more fulfilling and rewarding career.