Are you thinking about pursing an MBA? It can provide a nice life-long boost to your earning potential, but also costs a lot of money upfront. There is also some evidence of a glut of MBA candidates entering the jobs market, which devalues the benefit of having one somewhat. The programs are also time-consuming and rigorous, from taking the admissions test to applying and getting accepted – and that’s all before the truly demanding effort of the classes begins.
Still, some jobs flat out require an MBA, and the experience provides unparalleled networking opportunities that can support your career for the rest of your life. The degree adds credibility to your resume or CV and significantly boosts your earning potential, provided your degree matches up with your overall career goals.
The question of whether or not to pursue this advanced degree – it stands for Master of Business Administration – is a complex one. So we are going to break down all the things you’ll need to consider before you jump in, or else choose a different path. There are many roads to a satisfying career and comfortable income, and an MBA is just one of them. But it is a high-power degree that primes a person for management positions and steady career growth.
To help you decide if an MBA is right for you, we will be looking at:
- Who needs an MBA
- Types of MBA program
- Pros of getting an MBA
- Cons of getting an MBA
- How to choose the right MBA for you
Who Needs an MBA?
The truth is that very few careers absolutely require an MBA. It can certainly get your foot in the door faster, but it’s not like earning one grants you access into an exclusive professional guild. There is no board, bar, or licensing system for MBAs.
If you are lucky enough to be hired in the industry of your choice and work your way up the ladder organically, there may be no need to pursue an MBA at all. Your employer most likely won’t penalize you for it as long as your work product is solid.
But that’s not to say that some companies aren’t strict about this requirement. The larger the business, especially if it is publicly traded, the more likely the company will require an MBA for its executives. If your goal is to work at a Fortune 100 company, definitely get that degree. And if your industry of interest is an investment bank or management consultancy, an MBA can really help you gain the necessary skills to excel there.
Types of MBA Program
There are several different routes you can take to earn your MBA, depending on where you are in your school/work career and how much time you have to devote to study. The Princeton Review breaks down six distinct MBA formats.
If you are ready to devote yourself to your studies full time, this could be the type of program for you. When you pursue your MBA full-time, it takes two years (after the year that it takes to prepare, apply, and gain acceptance). The workload will be intense, with several hours of classes each day and a significant amount of homework to complete.
When you attend full-time, it’s not really possible to work as well, unless you can squeeze in some freelance or consulting gigs without affecting your performance at school. Remember to factor in the lost wages when you consider the cost of pursing an MBA on a full-time basis. It can cost upwards of $80,000 per year just to attend the program, live on campus, and purchase books and supplies.
Part-time MBA programs are great for working students as long as they live close enough to commute to campus. When you pursue an MBA on a part-time basis, it takes a minimum of three years to finish, but it can be longer depending on the course load you choose to bear.
Tuition costs typically average out to the same as a full-time program, but you won’t have to factor in lost wages, nor shell out for room and board. The credit loads tend to be flexible, allowing students to take more or less each semester depending on other factors in their lives. However, remember that going part-time will extend the time it takes you to start earning the big bucks in your career.
If you are looking for ultimate flexibility, an online MBA might be for you. You can earn this degree from many reputable schools and the ultimate credential is considered just as valuable as one you gained on campus. The average time for completion of an online MBA is 2-3 years, but this may be extended as need be to accommodate your job and daily life.
One of the really nice things about online study, beyond the flexibility to control the pace and work while you study, is that you can apply to schools that really inspire you, regardless of how far away you live from the physical campus. However, it is important to really research various MBA programs. While some very well-known schools offer a top-notch MBA, there are also plenty of cut-rate programs out there that may not deliver on their promises.
Early Career MBA
If you’ve only been out of school and in the workforce for a couple of years, or if you are soon to graduate with an undergraduate degree and plan to go straight on to your MBA, an early career program might work for you. This type of MBA has little to no requirement for work experience, a hands-on curriculum, many opportunities for mentorship, extensive career placement assistance, and an active alumni network.
If you can’t find a true early career program at the school of your choice, ask if that school accepts very many younger students in general, and what they offer in terms of networking, mentorship, and career assistance. Chances are, a mainline program could also provide what you need.
Established professionals who have been working for many years and are ready to push their careers to the next level may want to look at an Executive MBA. To qualify, you will likely need to have at least five years of progressive work experience that demonstrates your growth potential. Executive programs are designed around working adults with weekend and evening classes. It typically takes about 1-2 years to earn an Executive MBA, but this varies. Don’t expect to save money just because the program is shorter – the average cost to earn the Executive MBA degree is about $100,000.
Another type of specialized MBA is a Global MBA, which is ideal for executives who travel extensively for work. A focus on international business can be helpful for these people because the way business is conducted varies a lot from country to country. Global MBA programs also offer the chance to study abroad if you aren’t currently tied to a work location. The programs last 1-2 years and cost about as much as other Executive MBA degrees, around $100,000.
Pros of Earning an MBA
MBAs are not for everyone, but they can make a huge difference to people in certain careers. How do you know if it will pay off for you? If the following arguments in the pro category fit into your needs, you might want to start looking at programs.
1. You can build and extend a professional network significantly
By some accounts, the opportunity for professional networking is the single most valuable aspect of an MBA program. That alumni network can pay dividends for the rest of your career by keeping you in the loop on available positions, advancement opportunities, and developments in your field. In fact, you don’t necessarily need to finish your degree in order to benefit from the network you can establish in an MBA program, as long as your skills and professional drive are on point.
2. You can gain marketable skills that look good on a resume
Having an MBA can certainly give you an edge over other candidates for the same job, even if your experience is otherwise the same. And statistics from 2017 indicate that a full 79% of employers expected to hire one or more MBAs that year. Most everyone who was surveyed agreed that a candidate with an MBA can add value to the company. So even though there is a glut of MBAs in the job market right now, it still puts you in a category that employers are seeking.
3. It will likely increase your earning and advancement potential
The goal of your MBA should be to have it pay for itself, and then some, over the course of your career. Though it represents a huge initial outlay, you can still feel confident in a ROI over 250% for an MBA from a well-regarded state school and over 300% for an MBA from a school like Stanford or Harvard.
In terms of career advancement, an MBA can help because it shows that you are ready to move up. There is nothing you need in order to qualify for more demanding positions, other than the experience you gain from working every day.
4. It allows specialization in lucrative subfields
Your MBA degree can be carefully customized to your industry of choice, and if that’s an emerging subfield with a growing demand, you will be very well positioned to dominate. It may be necessary to specialize when it comes to certain emerging career paths, as landing the job without any experience is a nearly impossible task, even though brand new areas of enterprise have very little in the way of entry level work to offer.
Cons of Earning an MBA
It’s important to understand that MBAs aren’t for everyone. You could be wildly successful in your chosen field without one.
1. MBAs don’t necessarily support entrepreneurs
If your goal is to found and build your own business, an MBA might not be the best use of your time or money. While it won’t hurt, there is no substitute for real-world experience when it comes to entrepreneurship. Start by getting yourself in on the ground floor of a quickly growing start up and hang on for the ride. Being in the trenches will teach you more than any MBA program could, but a basic undergraduate degree in business could really help support your pursuit.
2. MBAs are limited to certain career paths
Make sure that an MBA is designed to advance the career you truly want. If you aren’t totally passionate about a career with an investment bank, management consultancy, or Fortune 500 Company, earning an MBA could represent a very expensive detour on the way to your true passion.
3. It is very expensive
Despite the fact that an MBA is expected to eventually pay for itself several times over, it will take many years to realize the gains. Depending on how much student loan debt you need to incur, it could be very many years indeed. But if you know for sure than an MBA is for you, the cost shouldn’t stop you. It can be prudent, however, to wait until you have a good amount of money saved up before you begin your study.
4. You can succeed without one
There are certain careers that require a corresponding degree, such as lawyer or doctor. But that’s not true of business executives. In fact, by some estimates, only 35% of CEOs in the United States have an MBA. Certain Fortune 500 companies may be sticklers for the degree, but in general you won’t get locked out of top companies because you lack one.
How to Choose the Right MBA Program
If you have decided to go for it and earn your MBA, now you need to choose the right program for you. Following are some factors to consider before applying.
Location and Geography
Do you live in close enough proximity to the campus to commute, or are you willing to relocate to live on campus? If you plan to study online, geography isn’t as big a consideration, though some online programs do price differently for in-state students. There are also hybrid programs that are mostly online but contain some in-person elements.
Finding the money to pay for your MBA is no small feat. Start by applying for all the grants, scholarships, and financial aid programs you can find. Some employers subsidize continuing education as well, so it’s worth it to ask your HR department if assistance might be available to you.
Once you have a sense of the financial support you can receive, you’ll better understand how much more out of pocket you can comfortably go. Hone your potential schools list with that understanding.
It’s not just the cost of the MBA program you need to consider, but also the lost wages if you quit a well-paying job in order to pursue it. It may not be practical to go for a full-time MBA if you don’t have a strong financial aid package or a large amount of personal savings.
In deciding whether to pursue a part-time, full-time, or online MBA program, there are many considerations beyond forgone earnings. How will your work-life balance be affected? Do you have parenting duties or consulting projects that will still need your attention? Is your significant other willing to relocate with you and/or support you while you go to school full-time? Decide how your MBA will fit into the life you already have, rather than let it rule your life entirely.
The best MBA candidate knows exactly what he or she wants out of a career. Armed with that knowledge, you may decide to specialize in a specific discipline or subfield. Doing so can ensure that you are connected with the very best faculty, advisors, and alumni to set you up for success with your degree. Popular options for specialization include marketing, human resources, finance, information systems, and operations management.
The application process for an MBA program is no joke. You should start planning at least a year in advance in order to study for and successfully sit your GRE or GMAT exam. And you must also be prepared to drop at least $250 per school just to submit your application materials.
Therefore, do your research on the selectivity of your potential schools before deciding which ones to actually apply for. If you know in advance that you don’t have the grades for certain programs, you’ll save yourself a lot of time, money, and heartbreak by skipping them.
Alumni and Job Placement Support
Because networking opportunity is arguably one of the most beneficial features of an MBA program, don’t forget to investigate the school’s alumni network before accepting an offer of placement. Do the alumni remain engaged with their alma mater and build relationships with current students? Does the alumni program host regular networking events? Also ask the school to share their post-graduation job placement rates. If they don’t have them or don’t want to share that information, it’s a red flag.
Don’t fall into the trap of assuming that you need an MBA in order to be successful in business. Once you get your foot in the door of a major company in the industry of your choice, it’s still very possible to climb the ladder organically. Experience and willingness to go the extra mile for your employer still count for a lot. You may also be able to pick up various certifications to along the way support your job growth for a much smaller outlay of time and money.
However, an MBA is an advanced degree that can make a huge difference in lifetime earning potential and job advancement for some careers. If you know that an MBA is the right call for you, don’t stress too much about the challenges and hurdles in achieving that dream. Whether you go full-time or spread your studies out over several years, that MBA might just be an investment in yourself that pays major dividends over the course of your entire career.