Just as recruiting has increased in the United States, M.B.A. salaries also have risen—as have tuition costs, which, at the top end, average about $100,000. M.B.A. graduates want a ROI on the substantial investment in their education, and it looks like they’re getting it.
Salary Ranges for the M.B.A.
The National Association of Colleges and Employers (NACE) puts average salaries from the top M.B.A. programs in 2006 at $90,000; first-year base salaries start (not including bonuses) at $50,000 to $75,000, with more than 40 percent of new M.B.A. recruits starting their new jobs after graduating at $75,000 a year and up.
The Graduate Management Admission Council (GMAC) Corporate Recruiters Survey Report estimated the 2006 starting annual base salary for new M.B.A. graduates at $80,809, compared to the $78,040 that graduates got in 2005. All in all, average salaries have steadily gone up at 21 percent for the last seven years. Once M.B.A. students hit seniority levels, their salaries can rise up to 50 percent.
The GMAC Estimated Total Annual Compensation for New M.B.A. Graduates in 2006 compared salaries (including base salary and additional compensation) in different industries:
• Consulting $101,736
• Energy Utility $100,263
• Finance $103,122
• Health Care $111,477
• High Tech $98,621
• Manufacturing $98,417
• Nonprofit/Government $73,125
• Products/Service $94,558
Perks and bonuses come with these figures. Some companies give yearly bonuses of $25,000 and add other things like tuition reimbursements, car allowances, and relocation costs, which can add about another $15,000. Obviously, these figures differ from company to company. M.B.A. graduates will have to look at the match between their area of specialization with the potential employer, their own experience before getting the M.B.A., the geographic location and its cost of living, and the ranking of the M.B.A. program within the business community.
The GMAC put some percentages to what companies are likely to offer: 81 percent indicated they would give a benefits package, 55 percent a moving allowance, 54 percent performance-based bonuses, and 40 percent a year-end bonus. Consider, though, that new M.B.A.'s should weigh offers of a higher base salary and fewer bonuses against a high year-end bonus. According to NACE reporting in November 2006, only 46.4 percent of the employers responding to their Job Outlook 2007 survey said they would not use signing bonuses to attract potential hires and would use them only when they felt the situation warranted it. This figure was about the same in 2005.
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