New data from the Financial Times shows that the average pay for a Master of Business Administration (MBA) alumni is $142,000 – up 12% since 2014.
A poll taken by the publication showed that the main reason students are prepared to fork out for such high tuition fees is to increase their salary.
The FT said it’s data indicates that salaries are still on the rise, with average alumni salaries increasing year on year for about three-quarters of schools in its global ranking.
“Average salaries increased by $7,000 in 2017, the largest increase in absolute terms in more than 12 years. All sectors apart from three — education, transport and logistics and law — saw average salaries increase,” it said.
It said that if the latest trend continues, the overall average salary should be near to $150,000 in 2018.
However, experts have recently warned against the value of pursuing an MBA. While still considered a safe bet, some hiring experts including Debbie Goodman-Bhyat, CEO of executive search firm, Jack Hammer, believe that the qualification is no longer as sought-after as it was during its heyday.
“An MBA itself is no longer a differentiator for professionals who are looking to make themselves more desirable from a hiring perspective,” Goodman-Bhyat said towards the end of last year.
“The MBA is now so common, that the prestige and exclusivity of it has diminished significantly over the years. Twenty years ago, it was a rare and highly prestigious degree to attain, with graduates adding a golden arrow to their bow as they then became assured of substantial career and advancement, and the resultant package hikes that would offset their investment in their MBA studies in no time.”
The FT’s data showed that the Gordon Institute of Business Science at the University of Pretoria ranks among some of the top MBA programmes for senior working managers in the world. It ranked 87th in 2017, and is the only representative from Africa.
The school has been continuously ranked since 2011, when it entered the top 100 at 67. Its highest position was 60th, in 2012.
Its alumni have the highest average salary among the bottom half of the table at $207,000 (R2.5 million) – the average alumni salary three years after graduation, and a 48% increase on their pre-EMBA pay.
Such a salary would put graduates well above most of the top earnings jobs in the country, and more towards the CEO level of pay.
The cost of an MBA
In October last year, the Financial Mail published its market research for ranking the best MBAs in South Africa in 2017, with the Gordon Institute of Business Science (GIBS) retaining its dominance.
The Financial Mail’s research also broke down the cost of MBA courses, showing that Henley Business School (part of the University of Reading in the UK) is the most expensive MBA course, followed by Stellenbosch’s Business School, and Milpark Business School.
|#||Business School||Cost of MBA|
|1||Henley Business School||R249 500|
|2||Milpark Business School||R226 530|
|3||Stellenbosch Business School||R225 950|
|4||Wits Business School||R221 000|
|5||Regenesys Business School||R218 700|
|6||Gordon Institute of Business Science||R214 000|
|7||University of Cape Town Graduate School of Business||R210 000|
|8||North-West School of Business & Governance||R148 690|
|9||University of the Free State Business School||R125 660|
|10||Turfloop Graduate School of Leadership, University of Limpopo||R107 657|
|11||Unisa Graduate School of Business Leadership||R93 285|
|12||Nelson Mandela Metropolitan University Business School in Port Elizabeth||R92 840|
|13||Management College of Southern Africa||R92 450|
|14||Tshwane University of Technology Business School||R85 000|
|15||Regent Business School||R71 200|
Goodman-Bhyat warned that with graduates flocking to obtain their MBAs – in the belief that this will undoubtedly set them up for a hugely successful career in the corner office – MBAs have become a ubiquitous presence on CVs, balancing the scales between demand and supply.
“Prospective students need to know that, yes, companies will take notice if the qualification is acquired from an international, preferably Ivy League institution. In these instances, there is a good chance that a professional will be snapped up for a top job, with a highly desirable package.
“But as always, career mapping should be done strategically. An MBA will always add value, as would most other post-graduate degrees, but pursuing an MBA could turn out to be an expensive and disappointing exercise if done for the sole reason of landing a top position with a lucrative financial package,” Goodman-Bhyat said.