BALBOA Concepts, Inc. REVIEW: MBAs Expect a 140% Pay Increase From Degree

July 14, 2013

Everyone knows MBAs tend to be a confident bunch. But when does self-confidence veer into the Pollyannaish territory of completely unrealistic expectations?

Business school applicants in the U.S. say they expect the MBA degree to lift their current salaries by a whopping 140%, to an average of $140,000 a year from their pre-MBA salaries of $58,000.

If that increase sounds overly optimistic, candidates in many other countries have even greater expectations, according to a new survey of MBA candidates by QS TopMBA.com, an organization that holds admissions fairs for business schools. Prospective students in Switzerland said they anticipate post-MBA salaries of $200,000, which would reflect a 145% increase over pre-MBA pay of $82,000, the highest salaries of any MBA applicants in the world.

MBA applicants from India expect the largest percentage increase. They believe the MBA degree will boost their pre-MBA pay by 369% to $112,000, from just $24,000 a year. The current pay of Indian candidates is among the lowest reported by any MBA applicants in the world. Only applicants in Nigeria reported lower salaries: $21,000 on average.

In China, a country like India from which much of the growth in business education is occurring, MBA applicants expect the degree to provide a 245% increase in salary to $121,000 a year from only $35,000 a year currently.

What makes the numbers especially optimistic is the fact that QS did not survey applicants to only the top schools but to a wider variety of business schools whose graduates tend to make considerably less than those at such schools as Harvard, Stanford, Wharton, London Business School, INSEAD and other top-ranked institutions.

Yet, even in the best of all possible worlds, the average salaries at the highest ranked schools would fall well below the expectation of U.S. applicants for average salary of $140,000. Graduates of Harvard Business School reported average base salaries of $124,000 in 2012, for example. Only when you include the average signing bonus of $26,200 at HBS do you exceed the overall expectation—and that is for the graduates of Harvard Business School.

At Georgetown University’s McDonough School, in contrast, the average starting salary last year was $99,799. Even adding the average signing bonus of some $24,100 would make an MBA graduate from McDonough fall some $16,000 short of the expected salary in the QS survey.

Still, compared to 2012, there has been a general drop in candidates’ current earning as well as their target salaries, according to the report. In the U.S., for example, applicants reported making $58,000 a year, down from $61,000 in 2012. A year earlier, MBA applicants expected to make $153,000 a year when they graduated. That expectation has fallen this year by $13,000 to $140,000 a year. In short, applicants in previous years were even less realistic than those polled in the past year.

 

Chairman & Editor-in-Chief at C-Change Media Inc.

BALBOA Concepts, Inc. REVIEW:

We should always be hopeful and strive to reach our best, but at the same time, we must be realistic about our expectations. As stated in the article, several MBA graduates have very high expectations of their starting salary. By having high expectations, they will most likely be disappointed. These graduates will most likely eventually reach their target salary, but not right away. Greatness takes work and time to achieve and one cannot assume that you will be rewarded immediately. Here at Balbao, we value our time by working hard and knowing that by doing so, you will eventually reach your goal. 

 

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