What is the ROI of an MBA Degree?
Today, MBA is one of the most popular professional courses across the world for its lucrative career trajectory and handsome pay packages. However, management programme is in itself an expensive affair. In India, the scenario is currently different from rest of the world.
In a 2016 report by Assocham, barring IIMs, most of the 5,500 Business schools in the country are producing "un-employable" sub-par graduates, earning less than Rs 10,000 a month if at all they find placements.
One of the largest factors when considering whether or not to get a Masters of Business Administration (MBA) is the cost. While on an average each student spent nearly Rs 5 lakh to Rs 10 lakh on a two-year MBA programme. So, prospective students are right to be concerned about the cost of their MBA degree. How long it might take to repay student loans or to recoup the cost of an MBA program depends on the circumstances of each individual student. But here are some factors to keep in mind when determining the value of your MBA investment.
The right way to calculate the ROI i.e. return of investment, of an MBA degree is to estimate the annual increase in salary and figuring out how many years will it take to recover the student loan/ investment through salary increases over a period of 10 years. The calculation should also take into account pre-MBA and post-MBA work experience, EMIs, market conditions and so on.
While, comparing ROI in an MBA programme with salary offered in campus placements does not provide a correct picture, it nonetheless gives an idea of the ROI i.e. return of investment.
SO, ARE MBAs IMPORTANT ?
The discipline and knowledge you can gain from an MBA increase your chances to enter any of these fields and unlocks the path for advancement, especially when coupled with a few years of experience.
What’s important to you?
Questions about the ROI of an MBA mostly translate to questions about expected salaries and career advancement. But it’s also important to think about what motivates you. For example, could the type of work you get to do with an MBA provide satisfaction beyond the highest salary possible? Could the network you gain be more valuable than the amount on your paycheck? These are all things that you should think about when exploring MBA programs and the shiksha advisor team is the perfect to explore yours RoI and reach us to get started.
Looking at the ROI is essential in your efforts to find the right school(s). The ROI figures shown above for the best schools were calculated during times of unparalleled economic prosperity. However, it would be wise to be more modest and conservative in your expectations and estimations. Remember that the return on your investment in a business degree, just like on any other investment, may prove volatile over the years. It could increase during economically good times and go down in turbulent periods.
Think carefully about things that make you feel happy and fulfilled in your life and career.