MBA Salaries on the Rise
January 2005
MBAs: Show them the money
Help
wanted: MBAs. Help wanted even more: Graduates of top
business schools such as
Harvard
Business School, the
Northwestern Kellogg Graduate School of Management,
and the
Wharton School
of the University of Pennsylvania.
"You'll likely make more money on your first job
with a degree from one of the top schools – but it's not just
about the money. It's about making contacts that
will help in your entire career," says Kent Harrill of
AdmissionsConsultants.
What are the schools that offer the best bang for the buck? Forbes.com answered that question
by conducting a survey of 85
business schools. It found that Harvard graduates came out
at the head of the pack, with a
five-year gain of $149,000 over their investment in
tuition and foregone salary.
While an MBA from a state school doesn't offer the same
dollar gain, the percentage return on investment it
could bring was still excellent, the report concluded.
Harrill is candid in saying that some MBA candidates are
just as well off going to schools that are not top ranked.
"If, say, you want to go to a state school and
want to stay in that area, that is sometimes a better
choice," he says.
Harrill, who has an MBA from
Cornell and who worked as a
junior partner at PA Consulting, says that
starting salaries for MBAs from the top schools are up
this year, varying according to areas of specialization.
"Investment
banking and management consulting have started
rebounding," he says.
But, he
adds, salaries are up overall for all MBA graduates. Recent media accounts back him up.
Cox News Service recently reported that MBA holders are
now looking at multiple job offers with starting
salaries of $90,000.
That salary figure doesn't include signing bonuses, which are no longer
restricted to professional athletes. "That may be 10% of
the base salary, and performance bonuses may be another
15%," Harrill says.
"Companies are courting MBAs as though they were colleges recruiting
athletic prospects," according to the Cox article.
The
MBA market three years ago was slow, but investment
banking firms and consulting firms are again appearing on
campus to recruit MBAs.
"Officials at top business schools report that during
the fall’s recruiting season, salary offers and signing
bonuses for MBAs jumped significantly, especially for
those seeking jobs as investment bankers and
consultants," according to the Wall Street Journal.
The Journal reported that MBA salaries are particularly escalating for
finance and management consultant firms.
"Average
salaries in finance increased 21% to $98,477 in 2004 from
$81,144 in 2003, while average salaries for management
consultants jumped 16% to $86,233 during the same period,"
the newspaper said. Signing bonuses were an average of
$25,000 to $30,000.
To put
this into perspective: the newspaper reported that the
bonus alone would cover almost a year's tuition.
"Sounds like the class of 2005 is looking at a pretty fast
payback on their MBA investment," it concluded.
"The
consulting firms have led the charge," with base salaries
rising about 10%, says Al Cotrone, director of career
development at the
University of Michigan's Ross School of Business.
The Journal says after remaining stagnant since
2001, total compensation for MBAs was matching the record
levels of pay hit during the peak of the dot-com boom.
"For
the first time since the dot-com bust, business school
graduates are being offered stellar pay packages," said
the report.
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