Should I get an MBA?
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Should I get an MBA?
Of course you’re not the first to ask this question. If you’ve been a business professional for any number of years, chances are this question has crossed your mind. And in recent years, the “correct” answer has become increasingly elusive.
Deciding if you should do an MBA is no small decision. Business school is extremely expensive, a multi-year commitment, and often cited as unnecessary in a post-Covid business world. That’s not to say nobody should get an MBA. For some, it might make sense. But how do you decide for yourself?
The truth is, “Should I do an MBA?” cannot be answered in isolation. That is, a handful of other key questions are also at play for anyone trying to reach a decision. These include:
- In which industry will I pursue my career?
- What role(s) am I interested in landing?
- What is my financial situation?
- What is my risk tolerance?
- Have I looked at MBA alternatives?
- What is the price comparison of MBAs vs. MBA alternatives?
6 Questions to Consider to Help Answer, “Should I Get an MBA?”
Let’s briefly analyze each of these questions to explain why each is important, and to hopefully help you craft some answers that make sense for yourself.
1. In which industry will I pursue my career?
Views and opinions on MBAs vary widely depending on the industry. In a few industries, senior roles at certain firms require an MBA. Certain private equity funds stick by this rule, but few professionals land in PE.
Growing industries like tech are trending in the opposite direction. In fact, some tech pioneers actually discourage MBA degrees. Take Tesla and Paypal founder, Elon Musk, for example. Musk is rather critical of the business degree accolade and suggests that business school doesn’t actually teach students “how things work.”
To Musk’s point, real-world, hands-on education isn’t necessarily guaranteed from business school. Perhaps that’s why another tech leader, Facebook COO Sheryl Sandbderg, believes a business degree is not required to be successful in the tech industry.
2. What roles am I interested in right now?
The majority of today’s most popular (and well paying) roles don’t require an MBA. Take the tech industry as a mini case-study. Most tech products or services are supported by a predictable web of teams, including engineering, product, sales, and marketing.
At most companies, an MBA is not required to climb the ranks in any of these fields. In fact, earning a six figure salary typically only requires a Bachelor’s Degree. Whether you want to earn an attractive salary as a marketing manager or product manager, most in-demand jobs do not require an MBA.
3. What is my financial situation?
One of the first considerations when asking, “Should I get an MBA,” is the significant cost involved. Traditional MBAs are expensive; there’s no two ways about it. While exact figures vary based on the specific program, most reports suggest that all things considered, business school ends up costing around $200k.
This number is actually a bit misleading, as you must also factor in the opportunity cost of removing yourself from the workforce for 2+ years. Not only are you paying $200k for the degree, you’re also missing out on 2 years of salary. If you’re currently making around $100k, that can be considered another $200k in lost earnings, for a grand total of $500k.
A half-million dollar investment! Considering 65-75% of graduates in the US have student debt related to their undergrad degrees, the majority of the workforce is not in a position to fork up those kinds of savings.
Since fewer and fewer employers are offering tuition assistance for MBA degrees, you will need to take a hard look at your savings and spending goals.
4. What is my risk tolerance?
Like most investments, returns for MBA programs are variable, and there is no guarantee of a return on investment (ROI). How fast do you expect to make back the cost of the MBA once you return to the workforce? If a degree brings you just 10% more earning potential, for example, it would likely take years to make back the $500k+ cost of the MBA.
This is why you must assess your risk tolerance before making the decision to pursue an MBA. Also note that some factors that might impact your ROI are completely out of your control. Take COVID-19, for example. Unpredictable worldwide events, or major workforce trends, could ultimately determine how fast and successfully you recoup your principal investment.
5. Have I looked at MBA alternatives?
Fortunately for many, excellent MBA alternatives exist. Through the advent of the internet, business school institutions no longer hold a “gatekeeper” position on higher education or powerful networks, the way they once did. For the person considering an MBA, this is great news.
A flexible mini MBA program offers students the same knowledge and network as traditional programs, at a fraction of the cost.
6. What is the price comparison of MBAs vs. MBA alternatives?
So what kind of savings can you expect from a MBA alternative? At less than 1% of the cost of a traditional business school degree, it’s tough to make the argument against a MBA alternative. Add to that the fact that many of these programs will expose students to real-world business leaders, projects, and skills to use immediately, MBA alternatives are looking like an attractive option to more and more business professionals.
“Should I get an MBA?” I hope these six critical considerations help you make the best decisions for yourself.
