Is an MBA worth it?
Published: 9 Jun 2010 17:23
How to stand out from the swarms of graduates in a tight job market is what every student should be asking themselves. A big decision is whether to continue studying on a postgraduate course.
When you consider the expense of a Master of Business Administration (MBA) degree - taking into account the course fees of about £20,000, accommodation, materials and loss of earnings for the time spent studying, you are looking at a project that costs upwards of £100,000 - it's a gamble.
Gus Marshall-Andrew spent a year doing a full-time MBA at Cranfield University. "I did mine because I was disillusioned with my career. The course didn't actually help me to change my career path but it did help me to be much more effective in it.
"As well as cramming our heads with a number of business models, we learnt a lot of softer skills, such as public speaking and making presentations, and that was really useful." insists Gus. "It really bolstered my confidence and helped me to realise that I did know as much as everyone else!"
But what tangible benefits does an MBA hold? Can you really expect to recoup the costs in terms of a higher salary? A survey by GMAC (Graduate Management Association Council) suggests so. It quizzed 1,382 recruiters who hire MBAs and found that they expect to offer 28% higher salaries to people with graduate business degrees with up to 70% increase for MBAs from top business schools.
Of course, it depends what sector your career is in. "For general business, international management and consultancy, an MBA is the gold standard," says Gus. "It shows you have the education. Most members of the board in blue chip companies like Shell, BP and Rolls Royce will have MBAs. For other sectors, like surveying, it's not so useful - I knew an HR manager who said 'Our business is all about relationships - you don't need to be a rocket scientist, therefore we won't pay you any more!'"
But a higher salary isn't the only benefit of doing an MBA. "There's an incredible alumni network amongst MBAs," says Gus, "which you can't put a value on. When you bring in a big contract through your alumni contacts, it's definitely worth more than the £20,000 you pay in course fees!" Contacts can prove to be vital; when positions for MBA jobs are competitive, it can be who you know that counts. Alumni networking both on-line and in person are dynamite, and decisions on where to study should be influenced by the strength of the alumni network.
Critics of MBAs suggest that they are too theoretical and analytical and, indeed, there is an argument to say that if you are naturally gifted you should be out there making your money. "I found there were a lot of people who went into the MBA course thinking they were going to come out of it as Richard Branson," admits Gus. "Some big entrepreneurs have actually turned up at MBA schools to say to classes 'If you're a great businessman, you shouldn't be sitting here!'"
So is an MBA really worth the money and effort? "As I get more senior, and say I go for a job on the board in five years' time, - if there are two of us in the final run-in, and only one of us has an MBA, I'm pretty sure it will have pay back then," says Gus. "I'd definitely do it again".
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