A major reason for the increasing popularity of a Master of Business Administration (MBA) is the prospect of earning a much higher salary.
The most recent MBA index, published by the Financial Times in January 2019, found that people who have studied and qualified for their MBAs had seen their salaries more than double in most territories – and even tripling in emerging markets.
Looking at salary increases of graduates from all top 100 schools featured in the ranking, the value of an MBA is evident in the large jumps alumni see.
The smallest increase recorded by the FT was 63% (ESMT Berlin), where the average post-MBA salary is still in six figures ($110,082 – or R1.5 million p.a.) – but salaries can almost triple (195% increase) in places like China and India.
The top-ranked university, Standford’s Graduate School of Business, has the highest average post-MBA salary ($228,074 – or R3.1 million), which is 129% higher than before the course.
While South African universities were not ranked among the best in the world in the FT ranking, salary data from PayScale does provide insight – and corroborate – the group’s findings.
According to PayScale’s data, the average salary of MBA holders in the country sits at R718,000, with salaries ranging from R250,000 for professionals working in HR, to CEOs earning in the millions of rand (R3 million).
This is more than double the average salary for those who hold a bachelor’s degree (which varies depending on type), and triple the average salaries seen by those who hold a diploma.
As is expected – aligning with the various levels of specialisation – those who hold a doctorate command the second highest average, followed by masters, bachelors, diplomas and typical graduates.
Because PayScale’s data relies on user submissions, the accuracy is dependent on scale. The measurements below are based on the input of thousands of user profiles tracked in each category totalling over 16,000 submissions from South Africa. Over 1,500 profiles that list an MBA were included.
In late 2018 the FT published its executive MBA rankings, which featured one school from South Africa – the Gordon Institute of Business Science (GIBS) at the University of Pretoria.
GIBS climbed 20 places to reach 67 in the rankings, with graduates of its modular/part-time EMBA expected to earn upwards of $200,000 (R2.9 million).
|MBA||R250 000||R719 000||R3 000 000|
|Doctorate||R150 000||R598 000||R2 100 000|
|Master’s Degree||R100 000||R445 000||R2 600 000|
|Bachelor’s Degree||R58 000||R273 000||R2 600 000|
|Diploma||R45 000||R219 000||R1 100 000|
|Graduate||R45 000||R211 000||R950 000|
|Certificate||R45 000||R205 000||R700 000|
The latest Quarterly Labour Force Survey published by Stats SA for the fourth quarter of 2018 once again highlighted the importance of gaining a qualification in South Africa in order to secure a job.
While the country’s unemployment rates sit at their highest levels in decades, there is a clear distinction between the unemployment rates across various education levels.
The latest report shows that, of the 6.1 million unemployed persons in Q4 2018, approximately 57.1% had an education level below matric, followed by those with a matric at 34.2%.
By comparison, only 1.7% of the unemployed persons were graduates, while 6.3% had some form of tertiary qualification as their highest level of education.