With graduates who have a masters of business administration earning £49,400 and £58,500 a year to start, enrolling in an MBA program appears to be a one-way ticket to an upper-middle-class lifestyle. However, all is not as it immediately appears.
Surveys of MBA average salaries tend to skew high. This is because surveys average in the salaries of all MBAs, including someone like Michael Bloomberg, who is worth billions. Factoring in Bloomberg's salary raises the average for all MBAs, thereby making the salary surveys a less-than-completely-accurate way to measure what MBAs everywhere are earning.
Job Change or Career Change?
Some who attend MBA programs do so to change careers. Others do so to upgrade their career and change jobs within it. Others still--a slim minority--attend right after getting their undergraduate degrees. Average rates of pay differ for all these groups, with those changing jobs making more than those who are changing careers, and those changing careers making more than those who are just starting their careers.
This is why the medical field has the most lucrative starting salary for MBA grads with, according to MBASchools.com, £72,150 per year. Most who go into this field were already in it before they started and are making the move from medicine or nursing to administration.
There are also differences between industries, fields, and specialities. As was mentioned above, MBA grads who work in health care make the most on average with £72,150 per year. Those who go into non-profit and government work make–again, on average–the least with £47,450 per year. A more accurate picture is therefore painted by examining not average MBA salaries on the whole, but the average salaries of the MBAs in a particular field or industry.
Geographical differences account for variations in average incomes for individual subgroups. MBA grads who take jobs overseas tend to make less than those who stay in the United States. What’s more, cost of living varies in different areas: £45,500 per year goes considerably further in Kansas City than in the San Francisco bay area.
Cost of Education
Attending a top-10 school full time costs around £52,000 in tuition alone, not to mention the income lost by not working for two years, if that is the path that is taken. This is another factor that must be examined; a better school does yield, on average, a higher starting salary, but it also costs more to attend.
When data is collected for these average figures, it is usually before graduation and therefore before every student has a job. Those who do have jobs before graduating are either high achievers or the job-changers mentioned above, who are slated to go back to their previous organisation or industry armed with contacts, an MBA and experience. If you are one of these people, then the averages are probably accurate. If not, it would serve you well to examine average salaries for your preferred industry--not just starting salaries, but also those of with three to five years experience.
Wharton Business School grads have an average starting salary of £71,500 a year. This number, however, comes from a range of £18,200 to £228,800. An individual's place on that scale is contingent on far more than simply attending business school.
To sum up, an average salary is just a starting point--your expected income is subject to myriad factors, all of which must be personally examined. To find an accurate average starting salary, you must examine all of these factors, from your expected job to its relationship to your current job to your expected location to the cost of the program itself. Only by comparing all of these factors can you find if an MBA is right for you.