New Research Indicates Which MBA Programs Offer Greatest ROI

In other words, even when controlling for factors such as undergraduate schooling and work experience, the resumes with the top schools’ names commanded a significant premium in the workplace. We believe that this premium could increase in a stronger economy when employers have larger payroll budgets. To quote one recruiter from the United Kingdom, “12-18 months ago I would have expected that these candidates would have been able to add £10,000 – £15,000 to their starting salary and their background prior to the Masters would have been less important.” Clearly, in any economy, the reputation of your MBA program has a significant impact on your future.

We had many other findings from this study.

1. All of our graphs, including those for each of the 10 regions and various job functions, show similar nonsymmetrical skews, i.e. the very top school names are further above the mean and median than the very bottom school names are below the mean and median.

2. All 31 schools profiled in Top MBA Programs are very highly regarded, representing the crème de la crème of graduate business educational programs. For comparison purposes the survey also included some composites of graduating MBAs from some less prestigious 2-year. Students from these less competitive business schools earned an average of 20% less than any of the 31 schools listed here. (See graph below.)

3. Candidates who pursue a career in a highly competitive field such as strategy consulting, investment banking, private equity, or venture capital, will most certainly benefit from attending one of the very top business schools. We heard repeated comments about consulting and I banking composites who were attending the least selective of our 31 profiled b-schools.

4. Recruiters give advantages to candidates who had already lived or worked in the same geographic region as the job they are applying for. Each composite resume reflected interest in a specific region by listing summer internships, undergraduate schools, and pre-MBA employment in the same geographic region. Most MBA students find it easiest to secure a summer internship in the same region as their MBA program. (Approximately half of second-year students find their positions through their career services office.) Hence, our composite resumes may not have been entirely accurate in portraying the chances of getting back to the region to actually compare the relative value of the b-school names.

5. The saying goes: “You’re only as good as your last position.” The survey saw that truism come into play repeatedly, particularly for the “candidate” with a public sector background. However, this was also the candidate who received the biggest increase in salary with a Harvard MBA: a whopping 55% higher salary than with the least competitive school’s degree. This difference suggests that highly competitive schools give their graduates the greatest “fresh start value” following a low-paying pre-MBA job.

6. Although some regional differences remain, the rapid spread of information through the Internet and the increasing transiency of the workforce have lessened the importance of geographical differences among the top MBA programs.

7. We believe that our average salaries are a bit lower than those reported by the schools for a few reasons: (1) our averages reflect an equal weight from each of the ten regions as defined by the MBA Career Services Council’s Standards for Reporting MBA Employment Statistics, (2) we reached out to recruiters beyond the ones who come to these schools’ campuses in full force each year. However, while these recruiters are going to place a lower value on these graduates, we steadfastly believe that the relative value on the b-school brand names remains constant.

8. We don’t believe for even a minute that this study quantifies the full difference between the educations offered at the top MBA programs. For starters, the differences in alumni networks and opportunities, particularly in highly competitive fields such as strategy consulting and private equity were not captured in our study.