Key Takeaway: MBA students hoping their degree will lead to a fat salary right out of school should think again. While career management profiles make them giddy over the fact that the average student makes nearly $100,000, the harsh truth is that few will be rolling in this much dough.
Furthermore, that “prestige” that goes along with your school won’t make much of a difference unless it falls at the very top of the list, and those students will have a slight advantage their entire careers. Hmmm ….
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Excerpted from BusinessWeek “MBA Pay: Riches for Some, Not All” by Anne VanderMey, September 28, 2009
Every incoming student has heard rags-to-riches tales of that gilded certification leading to giant paychecks and even bigger bonuses. But how often do these MBA fairy tales actually come true? According to new research: not as often as you think.
The averages usually reported by schools tell prospective students only part of the story. And numbers outside the averages or ranges can be hard to come by, leaving students to play an uncomfortable guessing game in the shadow of student loans.
Less sunnily, there’s a stark pay divide between graduates from top schools and the average MBA graduate, with the average MBA making only slightly more than half what grads from top programs do starting out. Even more sobering, the vast majority of MBAs—bearing degrees from schools of all stripes, good, bad, and indifferent—will not earn more than $75,000, and only about 4% will exceed the $150,000 mark.
According to PayScale, graduates from the Top 10 programs will make nearly twice as much as the typical MBA. And that pay advantage wears off fast after the Top 10, says Al Lee, PayScale’s director of quantitative analysis. “Outside of the Top 20 [ranked schools], you’re under six figures,” he says. Even worse news for students at lower-ranked programs: “By the time you get out of the Top 30 you’re talking just a small premium over the average school,” Lee says.
“When I’m showing a short list of candidates for a COO role, there’s an automatic quick glance to the education section of everybody’s CV,” he says. Work experience still trumps all, but he says he’s seen cases where degrees from top schools have tipped certain job candidates over the edge. Plus, hiring a Harvard graduate is usually viewed as a safe bet, Travis says, invoking the old maxim, “Executives normally don’t get fired for hiring IBM.”
No matter how you look at it, the fantastic notion of a diploma being an express ticket to a big company’s corner office is probably just that—fantasy.
Edit by JMZ
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Full Article
http://www.businessweek.com/bschools/content/sep2009/bs20090928_592028.htm
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