For Many Grads, Salaries Are a Far Cry from "Average"
By Anne VanderMey
Everyone knows what the mean and median salary is for any given school, but there's a lot more to MBA compensation than the average paycheck. To try to flesh out the standard metrics, BusinessWeek asked the salary tracking company PayScale to look at the pay of recent full-time, part-time, and to a lesser extent, executive MBA and online MBA graduates from the magazine's Top 30 B-schools. The results provide a visual representation of how many grads earned how much pay at each of the schools.
Distribution of pay at most schools looked something like a standard bell curve with a long right-hand tail, representing the exceptionally high salaries. Typically, the low end of the curve reflects people in either nonprofit or government work, jobs in foreign countries, or startups. The high end was typically consulting or financial services, and the bump many schools see in very high salaries can largely be attributed to bonuses in the financial services sector, says Al Lee, PayScale's director of quantitative analysis.
However, there are some inherent limitations to the school-by-school data. Most programs consulted for this article disputed the medians reported by PayScale, and in many cases, the ranges as well. Brigham Young University's Dick Smith, director of MBA career management at the Marriott School of Management (BYU Marriott Full-Time MBA Profile), said he couldn't recognize the PayScale's numbers, and that they were far too low to be accurate. Indiana University's Kelley School of Business (Kelley Full-Time MBA Profile) said the data seemed to have been skewed dramatically downward by disproportionately drawing from its part-time classes and those in its MBA accounting program, who start after three years as Kelley undergrads and are often paid less than full-time MBAs at graduation. "I'll be honest, we've done an awful deep dive analysis," says Erik Medina, Kelley's director of career services. "I'm not convinced that the median pay number or the distribution is even kind of reflective of where our full-time students are at."
Still, as a rough barometer for what MBAs in general are getting paid, the distributions are enlightening. Culled from a database of roughly 30,000, with about 100 respondents for each school depending on the size, the data represent a challenge to the way we typically view MBA compensation. In this light, the MBA seems far from a sure-fire path to a gargantuan pay check and a job in financial services, but rather a gateway to a much broader range of careers and salaries. The PayScale data also confirms something many an MBA applicant has long suspected: that the increased earning power from top-tier programs make them well worth the added cost.
Note: Two Top 30 schools, Dartmouth and Yale, were not included in this analysis due to insufficient sample size. Unemployed MBAs with no salary to report were not included in the salary data.
