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Salaries on the Rise for MBAs

Posted in Test Prep on February 17, 2011 by

An article in the Wall Street Journal indicated that newly minted MBA salaries and bonuses rose last year, a sign that employers are recruiting more intensely at business schools across the country:

“Students who graduated in 2010 received a median salary of $78,820, up from $66,694 for the class of 2009. Last year’s grads also reported bigger signing bonuses, a median of $13,318, nearly double the previous year. Still, both salaries and bonuses are down from prerecession levels.

The rebound speaks to the diversity of companies seeking to employ M.B.A.s, says Dave Wilson, president and chief executive officer of GMAC. ‘There are a lot of different players, other than just consulting and finance, in the M.B.A. marketplace,’ he says. Energy, clean technology, health care, government and nonprofit companies have all boosted their M.B.A. recruiting, he says. ‘And they are willing to pay more competitive salaries for an attractive M.B.A.'”

A few things to note about this trend:

1. Companies are still “cautiously optimistic.” Recruitment still hasn’t hit prerecession levels, but more banks and consulting firms are enticing MBAs with fancy “sell dinners.”

2. Recruiting is up across a broad range of industries. “Consulting is up, energy is up, banking is up,” says Julie Morton, associate dean of the University of Chicago Booth School of Business.

What this means for you: Given the current employment trend, an MBA degree is still a solid investment. Though MBA average total compensation figures may seem attractive to you, remember that the degree can cost up to 150k and that you are giving up 2 years’ worth of salary to invest in your education. Therefore, the salary jump is by no means magic.

While you should not necessarily be concerned about finding a job (especially if you attend a top-tier school), understand that you may not land your first-choice job out of an MBA program. Don’t forget that your peers in the program will also have passed through the hurdles of the admissions process and also have rich, exciting work experiences to boast of; and while MBA programs are generally supportive communities, you will have to compete with your peers if you intend to land the most prestigious jobs (the interview process is there for a reason).

Also be aware that your pre-MBA employment record is a significant factor in the recruitment process. You want to have a solid track record of success to point to on top of your educational pedigree, especially if you want to be competitive for the top banks and consulting firms. Considering all of this, the best thing you can do for yourself is to be extremely realistic about your skills, your work experience and how you intend to market yourself given the current economic climate.