Is the cost and effort a good investment? The overwhelming answer seems to be: It depends.

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The long-held benefits of pursuing a Master of Business Administration are tempting: job security, higher pay, a chance to play a key role in company growth or even launch a new startup. That said, attending an MBA program at a top-tier school can cost upwards of $100,000, and a shifting job market doesn’t guarantee the same stability it once did.

Adam Grahek was well acquainted with uncertainty. When he enrolled in the MBA program at the University of Minnesota, he had hopes of parlaying his six-year tenure as a marketing consultant with Wells Fargo into something more. At the time, hope was all he had.

“Not only was there no guarantee of a raise or promotion, but there was no clear financial reward in sight, at least not in the short term,” Grahek says. “This was about the long game for me.”

Is the long game worth it? The overwhelming answer seems to be: It depends.

The investment

Perhaps the most glaring downside of pursuing any graduate degree is the cost, and an average for an MBA is difficult to nail down. Tuition, books and fees can vary drastically by discipline, and there are several to choose from. The University of Washington offers six MBA degree programs in the Foster School of Business, with in-state student costs ranging from $66,678 for a general MBA to $108,000 for the Executive MBA. According to Assistant Dean for Master’s Programs Dan Poston, the financial investment for each degree is the result of a targeted approach.

“Each program has different types of career services with different career staff built to serve the various needs of students in each program,” Poston says. “For example, the executive MBA focuses more on executive-level career coaching, the technology management MBA career people focus on coaching and connections of common high-interest industries, and the evening MBA students do workshops and develop skills to open doors to new roles within the student’s current employer, which is often a first career move.”

Targeted training aside, the measure of a worthwhile graduate degree is your return on investment — that is, how much you’ll stand to earn in salary after accounting for the cost of your degree. The cost is steep for Foster MBA students, and Poston encourages applicants to consider their long-term career goals in terms of employer, particularly companies that value MBA grads. “Amazon and Microsoft have led all other regional companies in recent years in the volume of MBA recruiting, followed by consulting firms like Deloitte, Accenture, PricewaterhouseCoopers, and others.”

Foster serves over 400 recruiting firms across more than 12 industries in Seattle, the Pacific Northwest overall, the San Francisco Bay Area, and other locations such as Boston, New York and Los Angeles, Poston says.
If you’re committed to increasing your ROI, consider pursuing a company that offers tuition reimbursement for MBA studies, and rely on them to offset the costs.

Career paths

In addition to ROI, the issue of work experience presents a difficult dichotomy for MBAs. At first glance, the employment prospects for graduates are promising. In June, the Graduate Management Admission Council released its annual Corporate Recruiters Survey Report, which found that 81 percent of companies plan to hire MBAs this year. While this may sound like booming opportunity, it represents a 7 percent drop in jobs since 2016, and the median starting base salary of $105,000 per year remained unchanged within the same period.

The ground is shifting when it comes to MBAs and perception. The question of value has been brewing in the years since the Great Recession, and there is a marked divide among employers, many of whom want to see substantive technical and soft skills in their workforce — skills that an MBA alone may not deliver. In a 2017 Financial Times survey, one in three recruiters said they could not find candidates with the right skills in an MBA pool, citing candidates’ general inability to convert business theory into practice and employ time-management skills.

“When I have had other financial planners ask me whether they should get an MBA like me, I tell them that the MBA helps give some number crunching and general business background, but there are a few other designations that may help more directly,” says Scott Bishop, a partner and executive vice president of STA Wealth Management, a Houston-based financial planning firm.

While an MBA looks great on a résumé, it’s wise to understand the needs of your chosen discipline before jumping into a graduate program. For Bishop, who earned his MBA before becoming a financial planner, the choice would have been clear.

“I’m not sure that my MBA from a marketing standpoint looks better than my CPA, CFP or PFS certifications,” he says.

Bishop’s skepticism is supported by a PayScale analysis, which compared the differences in compensation of professionals who held undergraduate degrees and certifications to MBA graduates in the same fields. Those who saw the largest salary increases held high-level executive titles like finance director (32 percent) and marketing director (31 percent), whereas financial analysts were likely to see a 28 percent decrease in pay compared to their CFP counterparts, and program managers could expect a 7 percent dip in salary.

How you use it

The answer to the question of an MBA’s value is completely conditional, and although there are several stumbling blocks on the path to success, a 2018 GMAC survey found that the majority of students felt personally and financially rewarded by their MBAs — to the tune of 94 percent and 89 percent, respectively.

For Grahek in particular, hope combined with focus ultimately paid off.

“When I completed my MBA I received a promotion, which, while based on my performance in my job, had a lot to do with my experience in the MBA program,” Grahek says. “Another way that shows an MBA in itself is no ticket to success — but is a valuable tool if you take advantage of every opportunity within it.”