According to the Wall Street Journal, salaries for business school grads have bounced back after flattening at the beginning of the COVID pandemic. In fact, these salaries are hitting record highs as consulting firms, banks, and tech firms try to entice top business school graduates to join them.
University of Pennsylvania’s Wharton School and University of Chicago’s Booth School both stated that this year’s graduate median salaries grew $5,000 to reach $155,000. This is a record starting salary for Wharton grads, with 99% of students looking for jobs receiving an offer by late summer. Duke University’s Fuqua School of Business’ MBA graduates’ average annual salary also hit a record, with salaries going up 4% to over $141,000 compared to last year.
“Everyone is in a bit of an arms race in terms of compensation,” stated Maryellen Reilly, deputy dean of Wharton’s MBA program.
MBAs typically earn more out of grad school
In comparison to other grad degrees, the MBA is more likely to pay off in the job market. By two years after graduation, grads from most business programs tend to earn more than they borrowed.
According to the nonprofit Graduate Management Admission Council (GMAC), last year’s pandemic led to a flattening of median salaries for US MBAs at $105,000. This year’s graduates can expect to make up to $115,000, which is an all-time high.
These students can look forward to job offers from a variety of industries. According to Sheryle Dirks, associate dean for career management at Fuqua, “MBAs have more diverse types of job opportunities than ever before.” She added that salary offers in finance, consulting, and tech are showing the largest increases among Fuqua’s 2021 expected graduates.
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Gaps continue between men and women
Regardless of higher salaries after graduation, there continue to be gaps between men and women MBAs. According to the Forté Foundation, a nonprofit that advocates for advancing women’s leadership through business education, women’s enrollment in full-time business school programs peaked at 41% in 2021, up from 39% in 2020.
Respondents to a 2020 Forté survey reported that women made an average of $147,412, 20% lower than the $177,112 reported by men.
The pay gap increases with the number of years of work experience. There was an $11,000 gap for those with 0–2 years of work experience post-MBA, and a $60,000 gap for those with 9+ years of experience. According to Forté, women with 3–5 years’ experience earned an average of $152,000, compared to $172,000 for men with the same amount of experience.
Women were less likely to receive promotions and more likely to have a smaller number of direct reports. “We’ve definitely seen right out of business school the choices men and women are making are similar—similar jobs with the same types of opportunities,” said Forté Foundation Chief Executive Elissa Sangster. “But once they move into their careers, a number of different things come into play.”
Nevertheless, now seems to be the time for both men and women to take advantage of the increased demand for MBA grads and the resultant rise in compensation. Keith Bevan, a partner at Bain and Co. consulting firm, echoes the trend across many firms to attract more MBA graduates to keep up with expanding client needs. “It’s just a more competitive market,” he said. “It’s a great time to be looking for a job after school.”
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Related Resources:
• Is an MBA Worth It, or Is the Sky Falling Down on the MBA Degree?, a podcast episode
• MBA Students Pay Off Student Loans Faster Than Other Grad Degrees
• M7 MBA Programs: Everything You Need to Know in 2021-2022
