The Median Salary of an MBA Graduate

Average Salaries for MBA GraduatesEconomic hardship around the globe has pushed the so called temptation in dismay. In a recent report released by the Graduate Management Admission Council (GMAC), folks responsible for conducting the GMAT B-school entrance test, it was stated that the median starting salaries have been more or less stuck at $90,000 since 2008.

The value of this degree over the entire career is also diminishing except for top-ranked B-schools. While top notch schools can put significant importance of your degree the lower ranked schools will have to bear some heat.

Average Salaries for MBA Graduates

 As per GMAC, the entry-level median salary for an MBA graduate was $95,000 in 2013. In addition, roughly 62% of employers during this time offered $15,000 signing bonus for all MBA graduates.

According to GMAC, there are different parameters that decide the starting compensation for MBA graduates which include skill level, region, experience and type of program they enrolled for.

Also the salary may vary depending on the cost of living in different regions. For example, the Northeast paid the highest median starting income ($100,000), while those in the South may earn $92,000 per year.

In 2013, the highest paying industries for MBA graduates were consulting, finance/accounting, technology and products/services, reported GMAC.

Reports released by Bloomberg Businessweek in association with PayScale which gathered individual salary data through online pay-comparison tools. While calculating an estimated median cash earnings over the 20-year span it was Harvard Business School that scored the top spot in the ranking, with 20-year pay of $3,639,643, followed by the University of Pennsylvania’s Wharton School($3,460,707) and the Stanford Graduate School of Business ($3,432,013).

It is estimated that on average, graduates of all 57 programs earned about $2.4 million over the two decades, or $122,513 a year. This amount, however, is slightly increased from last year, when annual pay for the group was $122,146. Graduates of the 10 programs with the highest earnings took home nearly $3.2 million apiece, or $159,122 a year, an increase of 3.6 percent. The rest of 47 schools maintained its average of $2.3 million, or $114,724 a year—virtually no change from the previous year.

Moreover, the report revealed that during the last 20-years, graduates of all 57 programs averaged a 90 percent increase in pay. But multiple factors, starting from geographic location to the career paths of graduates, resulted in wide variations among B-schools. Institutions with the lowest starting salaries typically had the biggest gain—The University of Georgia’s Terry College of Business experienced the biggest gain—174 percent, whereas The Massachusetts Institute of Technology Sloan School of Management had the smallest of the pie, at 41 percent.

Back home the scenario is not so encouraging either. A recent report published in the Time of India suggests that close to 40% of B-schools across the country offers less than Rs 3 lakh starting salary. Only 1% out of 4,500 institutes across the nation is offered an annual salary upwards of Rs 9 lakh during campus placement after spending Rs 12-15 lakh as course fee.

Crisil Research Report included in its analysis that the lure of MBA in the country is quickly fading away as there are awareness about quality, infrastructure and decreasing return on investment. However, the actual benefit still lies with the top-ranked MBA institutions where you have the quality assurance and proper placement records. The report also concluded that B-schools with quality and better industry tie-ups will continue to do well.

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