MBA programs are great and have a lot of career benefits. But when it comes to analyze your education investment, you should do it the same way you would analyse any other investment: In contrast with its alternatives. And when you scratch in the surface of the apparent exclusive benefits of such programs, you may discover that all that glitters is not gold. Let’s analyze these supposed benefits:
- Several studies show that MBA graduates earn in average significantly more than non-MBA professionals. That does not mean the MBA is the cause of their higher income. Most MBA graduates were admitted at business school because they had what it takes to succeed. They belong to a high-potential group of professionals, but they were already there before their business school picked them. Correlation is not equal to causality.
- You should consider in your analysis that you would not have had a static career if you did not pursue an MBA. Your career and salary would have evolved as a consequence of your incremental professional experience. Consider then the differential expected income increase only.
- You probably already know it: Taxes are higher for higher incomes. Know the tax bracket for your expected level of income and subtract that percentage from your analysis. Take into account the value of money over time and the risk of not fulfilling your expectations.
- The word “average” might be tricky as statistics are usually a poor reference to establish a cause-consequence rapport. Most MBA graduates with lower salaries are reticent to answer the surveys as they are not proud of their income, while MBA graduates with the highest level of income are often placed at very demanding jobs they are not necessarily passionate about at a not so good hourly rate. Learn to question MBA wages statistics before making a conclusion, mainly when these statistics are presented by those trying to sell you the program.
A top MBA degree will always look great in someone’s resume. Most employers will value the degree and, faced to a tie between two candidates for a job, they will always pick the MBA guy. But ties between candidates are very rare. Most often, there is one candidate who has the most valued skills an employer is looking for, usually specific professional experience, or rare and demanded skills such as languages or technology knowledge. So why would you invest a fortune to buy a hell-expensive tie-breaking joker instead of staying in the market earning the winning cards for much less?
The network developed during an MBA program is an amazing, life-long asset. You will be able to meet high-potential brilliant people at business school… that might never be related to your professional projects. Amazing and interesting people just like you are everywhere and are open to connect with other amazing people whether or not they hold golden credentials. In addition, only a small fraction of the most successful people in the business world hold MBA degrees. You can go out there, learn a few social skills and master social networks to connect with them. If you have what it takes to get into Business School, you have what it takes to connect with great people and succeed regardless.
So why would you invest a fortune to buy a hell-expensive tie-breaking joker instead of staying in the market earning the winning cards for much less?
An MBA gives you a global and general vision of how big established businesses work. That’s a very nice-to-have knowledge, but an MBA may not be the most cost-effective way to earn it. The world has changed a lot in the last decades, and what is really valued in today’s business environment is knowledge and skills strategically oriented to add specific value or solve specific problems in the context of a specific industry. So look for that knowledge first; may be you can read some books to get the rest.
While MBA tuition has increased dramatically in recent years, the differential added value of this kind of degrees is more and more questioned. Many people enrol these onerous programs without asking themselves the right questions and taking for granted that degrees’ benefits are worth any price. That is how bubbles are formed. Make sure you have analyzed your investment decision deeply before taking the plunge.