What is the Average MBA Salary?

mba salary

Key Takeaways:

  • NACE (National Association of Colleges and Employers) reported an average of $87,966 in their Winter 2021 Salary Survey.
  • U.S. News & World Report calculated an average of $95,370 (base salary) and $105,684 (with bonuses) for the class of 2021.
  • The Forté Foundation found a range of $133,511 to $144,956 within just two years of leaving an MBA program.

Getting an MBA is a great way to boost your career. MBA stands for Master of Business Administration, a graduate degree all about running a successful business. For many people, getting an MBA is a smart investment.

It opens doors to new jobs, exciting roles, and much better pay. Think about it: people with an MBA generally make a lot more money than those with only a bachelor’s degree. If you have big career goals, an MBA could be the key to unlocking them.

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What Makes an MBA Salary Go Up (Or Down)

Industry

The type of business you work for has a huge impact on your paycheck. Some of the best-paying jobs for people with MBAs are in businesses like consulting, finance, and technology. These jobs often give you a chance to solve big problems for companies and make a lot of money in the process.

Location

The place you want to work makes a big difference in how much money you could make. Some states in the U.S. are packed with businesses and high-paying jobs, while others don’t have as many opportunities.

School Attended

The top business schools are famous for a reason. These schools teach you amazing skills and connect you with exciting job opportunities. When a company sees a top school on your resume, it tells them you’re ready to do big things.

Years of Experience

The more work experience you have, the more valuable you are to a company. If you have ample experience leading teams or managing big projects, you can ask for more money.

Companies need people with proven skills to handle their toughest challenges, and they’re willing to pay top dollar for that experience. There’s even a special type of MBA called an EMBA (Executive MBA) designed for people deep into their careers, and their salaries after graduation are quite high.

Contributing Factors for MBA Salary Expectations

Getting an MBA isn’t just about a fancy degree; it’s about boosting your earning power. Studies show that, on average, people with MBAs make significantly more money than those without them. We’re talking tens of thousands of dollars more per year.

Some industries see even bigger salary jumps after earning an MBA. Fields like consulting, finance, and technology often give huge pay increases to people with business degrees.

Climbing the Career Ladder

An MBA doesn’t just unlock a higher starting salary – it sets you up for bigger paychecks down the road. The more experience you gain, the more your MBA pays off. Research shows that MBA graduates see their salaries go up steadily over the years.

However, it’s important to be aware that not everyone’s experience is the same. Unfortunately, there’s still a gap in pay between men and women with MBAs, even when they have the same job.

Thankfully, organizations around the world are working hard to fight this unfairness and create a more equal playing field for everyone. So, what can you expect from an MBA degree salary? Let’s examine the details.

Average MBA Salary Increase

While studies vary slightly, the average MBA salary increase after earning an MBA falls within the range of $35,000 to $40,000 compared to pre-MBA earnings. That’s a significant boost. Imagine what you could do with an extra few thousand dollars every month.

Top Industries for Salary Growth

Certain fields have a reputation for rewarding MBAs handsomely. Consulting, technology, and finance often lead the pack with the most impressive master of business administration salary jumps. If your dream is to make big money, specializing in one of these areas within your MBA program could be a smart move.

The Five-Year Mark

This is an exciting milestone for MBA graduates. After a few years of experience, most degree holders break into the six-figure MBA salary range. Your hard work and dedication to building your career will start paying off in a big way.

It Depends on Your Path

Remember, these numbers are averages. Your own path could be even more lucrative. Choosing the right career path, working for a company that values your skills, and staying up-to-date in your field can all push your earning potential higher.

Plus, as organizations work hard to close the gender pay gap, opportunities for a fair and rewarding salary will continue to improve for everyone.

What Can You Actually Earn with an MBA?

An MBA is a prestigious degree that signals dedication, a solid business foundation, and advanced skills. But does that piece of paper really translate into significantly more money? The answer is yes, but it’s complicated. Let’s explore the realistic pay you can expect with an MBA.

Starting Salaries: The Real Numbers

Here’s the thing: when it comes to how much you’ll earn right out of the gate with your MBA, there are no easy answers. Several respected sources track starting salaries for MBA grads, and their figures differ:

  • NACE (National Association of Colleges and Employers) reported a lower average of $87,966 in their Winter 2021 Salary Survey.
  • U.S. News & World Report calculated an average of $95,370 (base salary) and $105,684 (with bonuses) for the class of 2021.
  • The Forté Foundation found a range of $133,511 to $144,956 within just two years of leaving an MBA program.

Why the differences? It comes down to the factors we discussed earlier:

  • Industry: Some fields (like consulting or finance) traditionally pay higher starting salaries than others.
  • Location: Where you work matters – a high cost-of-living city might mean a bigger paycheck, but it’ll stretch less.
  • School Attended: Graduating from a top-ranked business school can open doors to better-paying opportunities.
  • Work Experience: If you entered your MBA program with years of experience, you’ll likely command a higher salary than someone fresh out of undergrad.

But keep in mind that these are starting averages across a wide range of jobs. Your specific salary could be higher or lower, depending on your unique circumstances.

Salary by Industry

It’s no secret that certain industries are known for their lucrative compensation packages. According to U.S. News & World Report, these fields offer MBAs the highest average starting salaries:

  • Consulting: $147,178
  • Financial Services: $138,834
  • Technology: $128,442
  • Healthcare: $116,250
  • Retail: $115,485

It’s important to remember that even industries sometimes labeled as “lower-paying” still offer salaries that far surpass the national average. For example, non-profit and government positions on the U.S. News list came in at $90,381 and $87,675, respectively.

Compare these figures to the U.S. Bureau of Labor Statistics’ reported national average annual salary across all industries of roughly $58,260 – even at the lower end of the spectrum, an MBA brings significant earning potential.

Maximizing Your Earning Power Through Specialization

Choosing an industry is a major decision, but it’s not the whole picture. Within an MBA program, many students opt for specializations or concentrations. Think of it like this: the MBA gives you broad business skills, and specialization helps you laser-focus on your chosen field.

Here’s how it impacts your earning power:

  • Tailored Skills: You develop deep knowledge that’s in demand by employers in your specific industry.
  • Proven Interest: Your specialization shows commitment to the field, increasing your value to potential employers.
  • Networking Opportunities: MBA programs often help students build professional networks within their chosen industry.

If you’re aiming for a career in healthcare management, specializing in healthcare administration during your MBA makes you a more attractive candidate than someone with just a general MBA.

You’ll have the targeted knowledge and likely have contacts in the right places, giving you an edge in a competitive job market.

Regional Pay Differences

Where you decide to put your MBA to work has a major impact on your paycheck. ZipRecruiter lists these as the ten states with the highest average MBA salaries:

  • Washington
  • New York
  • New Hampshire
  • California
  • Vermont
  • Massachusetts
  • Wyoming
  • Idaho
  • Hawaii
  • Maine

It’s important to note that these figures only reflect data from job postings on ZipRecruiter and might not represent the full picture of MBA job opportunities nationwide.

Why Pay Varies by Location

Two key factors explain why some locations pay more (or less) for MBAs:

Industry Demand

Areas with a high concentration of certain businesses need more skilled MBAs. Think Silicon Valley for tech or New York City for finance. More employers competing for MBA talent can drive up their MBA finance salary or tech salary.

Cost of Living

Let’s assume you have two job offers with the same salary figure. If one’s in a major city with sky-high housing costs and the other’s in a more affordable area, your actual standard of living will differ greatly. That’s why it’s important to consider your lifestyle desires along with the raw pay.

When researching job opportunities, don’t just look at salary figures. Use cost-of-living calculators to see how far your potential earnings will actually stretch in different locations.

Your School’s Impact on Salary

The name on your diploma can sometimes open doors to higher-paying jobs. Here are some of the schools that, according to U.S. News & World Report, boast the highest average starting salaries (including bonuses) for their MBA graduates:

  1. New York University (Stern)
  2. University of Chicago (Booth)
  3. University of Pennsylvania (Wharton)
  4. Stanford University
  5. University of Virginia (Darden)
  6. And more

Don’t despair if this top-tier list seems out of reach. Many excellent MBA programs outside this small group still equip graduates to command highly competitive salaries. The key is to research schools that have strong reputations in your chosen industry.

Employment Reports

To gain real insights into a specific school’s salary potential, dig into their employment reports. These often detail:

  • Average salary figures (which may be broken down by industry or location)
  • Types of companies hiring graduates
  • Job placement rates

This helps you understand the typical career paths of the school’s MBA alumni. You might discover some programs have incredible reputations within certain niche fields, even if they aren’t household names in the general business world.

How Years on the Job Translate to Dollars

In almost any industry, the more experience you have, the more you can expect to earn. This holds true for MBA graduates as well. Those who’ve spent several years climbing the career ladder generally see a bigger salary boost from their MBA compared to those coming straight from undergrad.

Comparing MBA Programs: Full-Time vs. EMBA

The difference between full-time and Executive MBA (EMBA) programs clearly illustrates the value of experience:

  • Full-time MBA: These programs typically attract candidates with around five years of work experience. The focus is often on career switching or rapid advancement.
  • EMBA: These programs cater to seasoned professionals with extensive management experience. EMBA candidates, on average, enter with 14 years of work experience.

The payoff is clear. EMBA graduates see a much more substantial salary increase upon completing their degree because they were likely already earning well before seeking their MBA.

This further highlights the fact that an MBA builds on your existing foundation – the more substantial that foundation, the higher your potential earnings will likely be.

MBA Salary Growth Over Time

The real payoff of your MBA investment comes over time. The Forté Foundation analyzed salaries of MBA graduates and found impressive growth within a few short years:

  • 3-5 Years Post-MBA: Average salaries ranged from $151,951 (women) to $172,469 (men).
  • 6+ Years Post-MBA: The gap widens further, with women’s average salaries reaching around $174,387 to $194,460 for men.

These figures highlight the positive trajectory you can expect with an MBA. It takes time for the knowledge, skills, and network you build to translate into maximum income.

The Troubling Gender Pay Gap

Unfortunately, the data also confirms a persistent problem: the gender pay gap widens significantly as MBA careers progress. While the overall gap has narrowed in recent years, this trend is concerning.

It’s important to understand that companies cannot legally offer lower salaries based on gender, and this difference stems from complex systemic challenges women in business still face.

What’s Being Done

Organizations like the Forté Foundation play a key role in both highlighting this issue and working to create solutions. Their efforts include:

  • Transparency: Providing consistent data so the problem can’t be ignored.
  • Mentorship and Sponsorship: Helping women gain powerful advocates to support their advancement.
  • Company Initiatives: Partnering with corporations to implement policies that create a more equitable workplace.

So, what can you do? As an individual considering an MBA, knowledge is power:

  • Research: Choose schools with a commitment to gender parity and support for female students.
  • Negotiate: Be bold and confident when asking for the MBA degree salary you deserve, regardless of your gender.
  • Be an Ally: Men in the business world play a critical role in supporting their female colleagues and promoting equitable workplaces.

While the gender pay gap persists, the data overall paints a promising picture for MBA graduates. Your MBA equips you for significant earning growth over time, and choosing a program with a commitment to equity can help you further pave the way for a more inclusive business landscape.

Investing in an MBA is not just an investment in your own future – it’s also a way to contribute towards a more equitable future for all.

MBA Compensation: Beyond the Base Salary

Many companies sweeten the deal for talented MBA graduates with extras called a compensation package. Let’s see what you might find:

1. Signing Bonus

Sometimes, when a company really wants you, they offer you a signing bonus. It’s basically a chunk of cash you get just for saying “yes” to the job. This bonus can be a nice way to celebrate your graduation, pay off student loans, or maybe take that vacation you’ve been dreaming of.

2. Performance Bonus

A performance bonus is extra money you get for crushing your goals. Companies often set targets for individuals or teams, and if you meet or exceed those goals, you earn a bonus. It’s like a reward for being a top performer and helping the company succeed.

3. Stock Options

Stock options give you the right to buy shares of the company’s stock at a set price in the future. Let’s say a company is doing well, and its stock price goes up. You could use your options to buy shares at a lower price and then sell them for a profit. It’s a way to potentially make money as the company grows.

4. Equity

Equity is like owning a tiny piece of the company. This is especially common in startups or smaller companies. If the company does amazingly well, the value of your equity can skyrocket. It’s a bit riskier than a regular paycheck, but the potential reward can be huge.

5. Other Benefits

Beyond money, your compensation package could include other valuable benefits. These can include profit-sharing, tuition reimbursement, 401(k) plans, health insurance, and more.

Conclusion

An MBA is a powerful tool to boost your earning power. Specific salary figures will vary, but data shows that an MBA translates to higher pay over time. Remember, it’s about more than the degree—your experience, industry, and the choices you make all shape your success.