The ROI of Business School – Reach, Opportunities And Income

February 26, 2015 | by Matt Symonds

There’s no shortage of predictions about the bleak future of business education. Rising costs, disruptive technology, issues with staffing, and market competition rank high on the list of issues faced by business schools, large and small. However, if you ask MBA alumni about the value of their business degree, you will receive an overwhelmingly positive response. A new survey of graduate b-school alumni shows that b-school graduates earn more, climb the ranks quickly, and successfully expand their professional opportunities.

The Graduate Management Admission Council (GMAC) surveyed over 12,000 graduate business school alumni and the results are reported in their 2015 Alumni Perspectives Survey Report. This provides a global snapshot of employment and career progression for alumni from over 230 graduate business schools at 71 universities in 16 locations around the world. Survey participants graduated from business school between 1959 and 2014. Ninety percent of business school alumni report that graduate management education increased their earning power, with many rising all the way to the executive ranks, and participants also reported high scores for job satisfaction. Graduates also gave positive marks to the value of their education in driving their professional success, as well as positive reviews of their respective business school’s alumni association. A majority of responders even attributed their success to their engagement with these associations

According to Sangeet Chowfla, president and CEO of GMAC, “Graduate management degree-holders consistently tell GMAC their education is a solid investment and a spur to personal, professional and financial achievement, even in up-and-down economies. A graduate management education isn’t just a degree, it’s a career catalyst.”

More welcome news for the industry is supported by some recent statistics including many business schools reporting the strongest MBA job market in years, and a survey by employers that shows ninety percent of employers intend to hire b-school graduates in 2015. The GMAC survey results show that an MBA or other graduate management degree, such as a Master in Management, Accounting or Finance, is a positive educational investment in a highly competitive career marketplace. In the survey, ninety-five percent of alumni even rated their graduate management education as a good to outstanding value, and ninety-three percent said they would recommend their graduate business program to others.

Included in the results of the report:

The career trajectories of business school alumni show consistency in reaching higher levels of their organizations irrespective of when they graduated. The majority of alumni held mid-level jobs one year after completing their degree. Then five years post graduation, the majority of b-school alumni hold senior-level positions or higher, and after ten years, twenty-five percent of alumni hold executive-level positions with five percent in the “c-suite” (e.g., CEO, CFO, COO). Those who have made it to the c-suite are the alumni who are most likely of all to report they use the knowledge, skills and abilities learned in graduate business school on the job.

Ninety percent of alumni attribute their graduate management education to increasing their earning power. In both developed and emerging economies, graduate management alumni exercise enhanced purchasing power. As a new survey feature this year, GMAC offers a comparison of salaries for graduate management alumni relative to others. A global analysis of alumni earnings based on work location relative to GDP and purchasing-power-parity per capita (GDP PPP) reveals that business school alumni have purchasing power 1.6 to 6.8 times that of the average resident in the country where they are employed.

Business school alumni also move up quickly in the workplace and have high levels of job satisfaction. The majority of graduate business school alumni, in all occupational levels from entry-level roles to c-suite executives, credit their graduate management education for getting them ready for leadership positions, as well as for speeding up the pace of their career advancement. They also report high levels of satisfaction in their jobs. Four out of five alumni, or approximately eighty-four percent, believe their graduate management education offered opportunities for faster career advancement.

The GMAC report assessed entrepreneurial behavior in the workplace — defined through the traits of innovativeness, proactivity and social risk taking — elements associated with alumni career success. Results show c-suite and self-employed alumni are more likely than alumni at all other job levels to describe themselves with these attributes.

Fifty-nine percent of alumni are members of their business school’s alumni association and they tend to rate their level of career success higher than non-members. Alumni seek additional services from their alma mater, including courses and seminars, access to career services as well as additional networking events.

It’s enough to make Cassandra think again about getting her MBA.


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