MBA by the Numbers: How to Calculate Your Return on Investment

ROI (Return in Investment) Graphic
ROI (Return in Investment) Graphic

Considering an MBA? Chances are that one of the many reasons you’re thinking about earning an MBA is for career advancement. And, you’re not alone.

According to the “2014 Prospective Student Survey Report” from the Graduate Management Admissions Council (GMAC), “The primary motivations of today’s prospective business school students to pursue a graduate management education are consistent with the past: to increase job opportunities and increase salary potential.” Research suggests that those beliefs may well be true. Let’s take a look at some numbers.

According to research conducted by the Financial Times, students under the age of 24 who complete their MBA report an average increase in their pre-MBA salary of around $130,000 over the next three years. The numbers tend to decline the older students are, though even students 31 years and older at graduation reported a $63,000 increase.

Across all age groups, the average salary increase is $90,000 – a quite significant return on investment.

An MBA can award as much as an 80% increase in salary.

In similar research, Forbes reported that the average increase can be as much as 80% after five years across all age groups, meaning that a salary of $75,000 at graduation could be as much as $135,000 just five years later. These salary trends are not just confined to North America. In every continent, the pattern is repeated. Not only are MBA graduates highly valued across the globe, it could also be argued that the appeal of an MBA can be carried from country to country.

72% of employers surveyed planned to hire MBA grads this year.

The good news doesn’t stop there. As well as expecting a higher salary, MBA graduates will find more opportunity to gain or change employment in 2015.

Further GMAC research reported in The Economic Times suggests that 72% of 169 employers questioned intend to hire MBA graduates this year compared to 69% in 2014. There’s one other number every MBA student looks at – course fees. In order to make the potential salary increases of obtaining an MBA, students have to make a financial investment and commitment to their education.

Interestingly, the top two business schools identified by the Financial Times 100 MBA programs (Harvard and Stanford) actually rank 86th and 99th in students’ opinion of the “value” the programs provided. In addition, Harvard MBA graduates ranked the school 50th in terms of “achieving their aims.”

Compare the cost of your MBA program choices for maximum ROI.

This brings up a very interesting point when considering which MBA Program to choose. Fees are important weigh, but students should select schools using a consideration set that balances fees, their personal and professional goals, overall comfort with the program, and whether the program is “accredited,” that is, has been approved by a separate professional organization not affiliated with the school.

Consider the online MBA program at Spring Arbor University. There are six tailored MBA concentrations to suit your career aims and goals. The program is accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools. The program provides immediate real-world applications that will help you with your work from day one. And at just $608 per credit hour, you can complete your MBA for just $21,708 – an excellent value when you find that many online courses are between $35,000 and $50,000 to six figures.

One final benefit of completing an MBA is the sense of personal achievement that comes from investing your time in improving yourself and your career. The knowledge that you have moved yourself forward both professionally and personally is very rewarding.

If you would like to speak with an admissions advisor about the online MBA program at Spring Arbor University, call 1.844.621.0900.