What are the benefits of getting an MBA? Explore how an MBA advances careers, improves job security, and grows professional networks and earning potential.
The demand for graduate management education is surging, with 84% of online MBA programs seeing an increase in applications for admission, according to the “Application Trends Survey Report 2020.” While these numbers stand out, professionals considering their graduate school options may wonder about the benefits of getting an MBA and whether the degree is worth it.
To answer these questions, one should take a look at what an MBA offers in terms of career advancement, networking opportunities, earning potential, and job security.
Why Choose an MBA?
An MBA, or Master of Business Administration, offers practical training in the core management functions of:
- Planning (developing organizational goals and outlining how to achieve them)
- Organizing (delegating tasks and building an environment that supports productivity)
- Leading (managing people with guidance and encouragement)
- Controlling (evaluating and adjusting the execution of organizational plans to ensure success)
MBA students often choose the degree because of its focus on how to achieve real-world results in the business world. Curricula center on leadership, organizational behavior, and business strategy. Core courses typically span marketing, management, supply chain, talent management, business law, and accounting. Ultimately, the degree aims to prepare graduates to run businesses both big and small.
Many MBA graduates go on to launch startup companies, work in financial institutions, or take on management roles in various types of organizations, ranging from Fortune 500 companies to nonprofits.
In addition to gaining valuable knowledge about how to put sound business practices to work and lead strategically, earning an MBA has some other key advantages.
Advance Your Career
MBA programs help develop professional problem-solvers ready to tackle all sorts of challenges. Computer-based simulations in the classroom, for example, teach MBA students how to make strategic decisions in the context of real-world situations. Because simulations mimic workplace conditions, students gradually move away from seeking right and wrong answers, improving their creative problem-solving abilities and moving them toward career readiness.
Diane Fittipaldi, MBA Program Director at St. Catherine University, often includes simulations in key MBA courses because “simulations not only provide students with the marketable decision-making skills employers are looking for, they also have been proven to build student confidence, which is especially important for women in business.”
Problem solving abilities gained from simulations of real-word situations can help graduates move up within their organizations, land higher management positions, and realize new career goals. They can also prepare professionals to take on advanced roles and responsibilities with a current or new employer.
For example, with an MBA, a sales representative may move on to become a sales manager. An IT professional may use an MBA as a tool to pursue senior-level IT roles, such as a chief technology officer or a chief information officer.
Additionally, an MBA can help professionals build the confidence they need to become entrepreneurs or go after competitive leadership positions in their industries. Many MBA graduates also find the degree invaluable when seeking work in consulting or building their careers in finance.
The hard and soft skills students hone in MBA programs, such as financial forecasting or working well with diverse types of people, allow them to excel in a wide variety of industries. This means graduates can move into healthcare, tech, government, or other fields of interest. In fact, a Graduate Management Admission Council (GMAC) survey of alumni found that 87% of respondents either strongly agreed or agreed that their graduate degree made them more employable.
Grow Your Professional Network
The benefits of getting an MBA go beyond helping professionals develop the domain knowledge needed to thrive in their fields. MBA programs can also provide invaluable networking opportunities. MBA students often get access to industry leaders and talented business professionals with diverse experiences who can expose them to unique points of view and business practices.
Numerous studies have established that strong networks typically result in more career promotions and higher salaries. These relationships help connect people from different organizations, provide insight about job opportunities, and help professionals learn about the preferences of potential employers.
MBA programs may offer sessions that teach students how to grow their networks. They may also host career conferences where students can find internships or meet future employers. Additionally, MBA programs often hold events that invite alumni to meet and interact with current students. This gives both groups a chance to discuss their interests, share ideas, and build relationships.
Diane Fittipaldi, MBA program director at St. Catherine University says, “with an online program like ours, we hold these alumni sessions via Zoom, linking our students together with alumni from different geographic locations, different companies and different backgrounds. It is a rewarding experience for everyone involved”
During the course of their studies, MBA students collaborate with one another on projects and forge bonds with their classmates. Later, these students may start their own businesses or land executive positions with important companies. Graduates can then tap into their alumni networks to gain in-depth knowledge about a specific sector, find business partners, or get references for job openings.
Increase Your Earning Potential
An MBA can play an important role in helping professionals secure management and leadership positions. These types of positions tend to pay more than non-management positions, accounting for the connection between an MBA degree and the ability to command higher salaries.
MBA graduates can expect a significant pay bump. The Nation Association of Colleges and Employers (NACE) predicts MBA graduates will earn $29,000 more a year than their counterparts with only a bachelor’s degree in business. NACE also expects 2021 MBA salaries to start at $87,966 a year. That’s 11.3% higher than the starting salaries for MBA graduates in 2020.
A 2020 GMAC corporate recruiters survey found that MBA graduates are accepting job offers with median salaries of $105,000 a year, excluding bonuses. A GMAC survey of MBA alumni found that 80% of graduates strongly agreed or agreed that their graduate management education increased their earning power. A third reported that their median income rose from between $50,000 and $100,000 annually to over $100,000 a year with an MBA.
Strengthen Your Job Security
Despite the disruptions caused by the COVID-19 pandemic, hiring projections for professionals with an MBA remain strong. In the GMAC recruiters survey mentioned earlier, 90% of respondents said they planned to hire MBA graduates. That number jumped to 96% among technology recruiters. In 2019, only 80% of technology recruiters indicated plans to hire MBA graduates. This upward hiring trend portends a positive job outlook for degree holders.
Many companies view an MBA as a key differentiator among job applicants and believe that hiring professionals with this degree brings value to their organizations. Recruiters across various sectors express a great need for talented business school graduates, and many will likely now set their sights on finding talented female MBA graduates in particular.
In recent years, an accumulation of research has shown the benefits of gender diversity in leadership such as:
- Greater financial performance and investor confidence
- Improved shareholder value
- Decreased risk of corruption and fraud
- Enhanced employee and customer satisfaction
For example, a recent Harvard Business Review study found female board members help improve organizational decision-making. By tempering the overconfidence of their male counterparts associated with an overestimation of returns, female leaders help companies reduce unsuccessful risk-taking and improve investment decisions.
Aware of these findings and others like them, many businesses have prioritized efforts to increase the gender diversity among their leadership. A Goldman Sachs CEO announced at the beginning of 2020 that the investment bank would no longer take companies public without at least one “diverse” board member. The CEO noted that companies with female leaders enjoy significantly better premium returns than those without them.
Other major companies, including Intel, Hilton, and Visa, have also created initiatives to recruit and promote female leaders, making it an especially advantageous time for professionals who are women to earn an MBA.
Achieve Your Career Goals by Earning an MBA
The benefits of getting an MBA are undeniable. Not only does the degree substantially increase one’s earning potential and deepen their practical knowledge of business practices and strategies. It also provides numerous opportunities to connect with industry experts and build important relationships with other talented professionals from various sectors.
Explore how St. Catherine University’s online Master of Business Administration program helps professionals achieve their career goals.