There's a lot to consider before enrolling in an MBA program, such as the long-term value of such a credential. Some MBA proponents agree that the degree is crucial for your future as a business leader. Others claim there's overwhelming evidence having an MBA can be very profitable. Then, there are those who disagree, saying the value of the degree has declined as more students apply to MBA programs.
Luckily, you don't have to rely on anecdotal evidence or one critic's opinion when considering business school, as there are graduates of MBA programs working around the world. There's also more than enough data available that shines a light on an MBA's value. Here are a few tips for finding the information you seek.
Analyze MBA Program Trends
The first thing you can do is look at MBA programs' growth in popularity. According to the Graduate Management Admission Council, the group's 2014 Application Trends Survey reported the third straight year of growth in full-time, two-year MBA program applications. For those unsure about an MBA, this means there's a growing talent pool of MBA holders offering increased competition in business. Furthermore, the three-year trend marks a move away from recession-based money-saving measures, according to analysts.
"For students, GMAC's Corporate Recruiters Survey may very well signal a change in hiring from a cost-driven, recession-driven organizational focus, to a growth-driven focus utilizing the skills that MBA programs are designed to develop," said Sangeet Chowfla, GMAC president and CEO, in a press release.
Calculate the Benefits
This data only paints one portion of the picture, however. Rates and prospective student confidence aside, you want to calculate the degree's value after you finish your schooling. Based on hiring trends, an MBA's value is very high, according to GMAC.
"Our recent Corporate Recruiters Survey [released in May 2014], [showed] 4 out of 5 companies said they planned to hire MBA graduates in 2014," Chowfla said.
In other words, 80 percent of prospective employers agree that MBA degree recipients are a valuable commodity and there are a high amount of opportunities for recent graduates. What exactly are the economic benefits, though? Just because MBA recipients may be hired doesn't mean their non-MBA counterparts won't receive the same positions and pay wages, does it?
According to the GMAC Corporate Recruiters Survey, new hires who hold an MBA are expected to earn $45,000 more than graduates of U.S. undergraduate programs. The median expected salary of an MBA graduate is $95,000, while U.S. bachelor's degree holders expect to earn a median of $50,000 annually.
According to the Chicago Tribune, this showed that the long-term benefits on an MBA in the corporate workforce is unquestionable.
"With every level of education, people increase their lifetime earnings and increase their career stability," John Challenger, CEO of Chicago-based outplacement firm Challenger, Gray & Christmas, told the Tribune. "It's easier to move positions, and (MBA holders) tend to see fewer periods of long-term unemployment. MBAs, in particular, come away with skills and a stamp of approval and credentials that businesses and employers value."
Listen to the Alumni
If you're still unconvinced, gage your feelings about an MBA based on what alumni have to say. Poets and Quants reported that another GMAC survey published earlier this year showed that business school alumni put high value on their MBA degrees. After surveying 21,000 business school graduates from 132 different institutions, data showed that 94 percent of business school graduates valued their degrees highly and say their expectations for a high return on investment were either met or exceeded.
Moreover, alumni's perceived value of the degree only grows over time. While 91 percent of graduates from 2010-2013 claimed a MBA's value was good or outstanding compared to the cost, 95 percent of graduates from 2000-2009 reported similar feelings and 98 percent of graduates from 1959 through the '90s reported similarly.
While some business leaders may question the value of MBA programs, the overwhelming majority of MBA graduates reported higher wages and confidence in the value of their degrees. Despite any skepticism, all these examples make it hard to deny the MBA's measurable value.