On average, the MBA salary for students graduating from a Top 60 B-School is around $152,000. Moreover, jobs after MBA graduates in Consulting, Financial Services, and Technology offer a starting MBA Salary of over $100,000.
Here is the MBA salary of graduates of full-time programs at top 10 universities based on Industry:
|Consumer Packaged Goods||$106,719|
|Transportation & Logistics Services||$106,250|
As we can see from the table, the average post-MBA salary differs based on the industry, which makes you think about what other factors might affect your MBA Salary.
This article will explore the various factors that affect your MBA salary and how you can ensure the best outcome – in terms of monetary compensation.
Your GMAT Score, the prestige of your business school, the industry you choose to work in, your pre-MBA work experience, and the country you choose to work in are a few important factors that affect your MBA Salary.
But on which point should you focus first to get an above-average post-MBA salary? – That’s the question you’ll be able to answer yourself after going through this post!
Watch this video that will give you reasons why you should pursue MBA and will help you get more clarity about your post-MBA goals:
- MBA Salary 2023
- MBA Salary Components
- MBA Salary – Key Takeaways
- FAQs- MBA Salary 2023
MBA Salary 2023
Besides a prestigious degree, an MBA from a top B-School opens the door to a plethora of opportunities, from changing your career to learning successful management skills and building a network of peers that you can leverage long after your MBA. However, for some aspirants, another goal serves as an excellent motivator for pursuing an MBA degree, i.e., MBA Salary.
It is a known fact that an MBA degree greatly increases your earning potential with prospects of higher salaries and various other components of compensation such as performance-based and guaranteed bonuses. However, your MBA Salary varies depending on these factors:
- GMAT Score and business school ranking
- Job Industy and Work profiles
- Prior work experience
- Country you work in
So, let’s look into various factors that can affect your MBA Salary in 2021.
Post-MBA Salary and GMAT Score relation
An MBA from a top-ranked Business School catapults your career into the high gear you want in a competitive job market. Let us look at the relation between average MBA salaries and GMAT scores.
We have used data from the Forbes Ranking of best business schools to understand how the Business School rankings affect your post-MBA Salary. Here are our findings:
- The average post-MBA Salary for students graduating from a Top 60 B-School is around $152,000.
- There is a strong correlation between GMAT scores and MBA salary. The correlation coefficient is 0.83 – which means that the higher the GMAT score, the higher are your chances of getting a higher salary!
We've prepared this scatter plot with the help of the data in the table below for the top 60 B-Schools in the US:
|Ranking||Business School||MBA Salary||GMAT score|
|11||UC Berkeley (Haas)||$205K||730|
|17||Carnegie Mellon (Tepper)||$185K||700|
|24||Brigham Young (Marriott)||$145K||672|
|25||Notre Dame (Mendoza)||$151K||680|
|27||Michigan State (Broad)||$125K||690|
|28||Georgia Tech (Scheller)||$143K||690|
|29||Washington U-St. Louis (Olin)||$125K||700|
|33||Texas A&M (Mays)||$142K||640|
|34||Penn State (Smeal)||$130K||657|
|38||Arizona State (Carey)||$125K||700|
|41||Ohio State (Fisher)||$137K||685|
|43||UC Irvine (Merage)||$130K||680|
|44||William & Mary (Mason)||$120K||620|
|52||Case Western (Weatherhead)||$117K||625|
For any strategic advice for GMAT or MBA Admissions, write to us at email@example.com. Let us help you conquer the first step of getting into top business schools i.e., taking the GMAT. Take a free GMAT mock to understand your baseline score and start your GMAT prep with our free trial. We are the most reviewed online GMAT Prep company with 2500+ reviews on GMATClub.
Business school rankings can be tough to decipher. Learn what they signify and how you can make use of them in your business school application process by reading this article.
This reaffirms the belief that a high GMAT score can make a big difference in your post-MBA salary.
How? You ask? - The logic is quite simple. To get a high salary you need to get an MBA degree from a top business school. A high GMAT score will help you get into a top business school. A high GMAT score assures the business school that you will ‘get through’ their rigorous MBA program. That's why the top 10 Business Schools boast a very high average GMAT Score of their incoming batch as compared to the next 10 business schools.
Let us consider the following 2 Candidates:
- Candidate 1 – GMAT Score 732– Admitted to Stanford GSB
- Candidate 2 – GMAT Score 700 – CMU Tepper
While Candidate 2 on average can command $185,000 as a starting salary, it pales compared to the $250,000 that Candidate 1 can command post-MBA. That is a whopping $65,000 difference in starting salaries, and this gap only widens with time.
Let us try to understand why this seems to be the case:
There are many factors that are taken into account while assessing an applicant for any Business School. The weight-age each criterion is given can be neatly summed up by the graphic below:
As we can see, significant weight-age is given to an applicant’s GMAT Total and Quant Score – 22% in fact! Hence, top Business Schools consistently accept candidates with higher GMAT scores. To add to this, many studies have shown the GMAT score to be a reliable predictor of performance in an MBA program. Hence, it is not a stretch to say that a higher GMAT score is a key factor affecting your post-MBA salary.
To sum up, we can confidently say that a higher GMAT score allows you an opportunity to get into a top B-School and hence gives you a better chance of commanding a higher Post MBA Salary.
A high GMAT score has more value than just getting you into a top business school. Know more about the importance of GMAT and top 3 reasons of taking the GMAT
MBA Salary vs. Job Industry and Work Profiles
MBA graduates are hired into diverse businesses owing to their vision, innovation, and ability to help businesses grow. MBA aspirants should also consider Business Schools' placement figures and statistics to understand which industries and profiles would give them the maximum return on investment post their MBA degree.
Looking at the data of a survey conducted by US News of the Class of 2022 graduates of full-time programs at the top 10 universities, we can see that MBA graduates that enter the consulting industry command the highest salaries.
Furthermore, Consulting, Financial Services, and Technology are the top employers of MBA graduates with an average MBA Salary of over $100,000. Also, it is noteworthy to observe that a graduate working in consulting can earn an average of $46,000 more than a graduate in the transportation and logistics industry.
NOTE - The above figures are reported based on basic pay that the MBA graduates receive, and these figures do not include joining or performance-based year-end bonuses and other benefits such as tuition reimbursements or stock options, which can easily add another $10K-$30K to your first-year post-MBA salary.
From the data mentioned above, we can conclusively say that graduating from a top Business School into a career in Consulting, Finance or Technology offers the best opportunities in terms of salaries and career advancement. This also has a lot to do with the perception that a graduate from a top Business School is a great investment for the recruiting organization.
Let us help you conquer the first step of getting into top business schools i.e., taking the GMAT. Take a free GMAT mock to understand your baseline score and start your GMAT prep with our free trial. We are the most reviewed online GMAT Prep company with 2500+ reviews on GMATClub as of July 2021.
MBA Salary and Prior Work Experience relation
Another essential factor determining what you can earn after your MBA is the number of years and quality of work experience a candidate has before their MBA.
According to PayScale's survey of tens of thousands of MBA graduates in the United States, the average salary of MBA graduates is estimated at $90,000, with typical jobs ranging from a financial analyst ($68,160 average) to financial controller ($95,096 average) to chief financial officer ($157,693 average). Moreover, approximately 1.3% of MBA graduates had less than one year of work experience, whereas 32% were experienced, and 26% reported that they were mid-career graduates.
Similarly, MBA graduates in India get offered on an average earn 8 lakhs salary, with typical jobs ranging from a financial analyst (INR 4,96,160 average) to financial controller (INR 13,17,084 average) to chief financial officer (INR 34,27,199 average). Moreover, of MBA graduates, approximately 4.2% of participants had less than one year of work experience, whereas 27.3% were experienced, and 33.7% reported that they were mid-career graduates.
Another data point that we have considered to see if work experience contributes to an MBA Salary is by comparing average base salary at various job levels.
The data in the table below clearly shows how your job level (post-MBA) and prior work experience can affect your salary. Graduates hired into Senior and executive-level positions mint $25,625 – $70,625 more on an average than graduates who join mid-level positions.
|Industry||Entry Level||Mid-Level||Senior Level||Executive level||C-Suite|
Thus, based on the above results, we can say that work experience contributes significantly to an MBA's Salary.
Post-MBA salary vs. Country you live in
The geographic location and the surrounding market for jobs also heavily influence the average MBA salary. The top 10 countries for MBA salaries conclusively show that an MBA graduate from Switzerland earns the maximum post-MBA salary, followed by the United States and Canada. Graduates from schools in these regions also earn higher bonuses compared to their counterparts in other countries.
Many candidates consider an important reason while deciding on an MBA program is the opportunities available after completing the degree and international exposure in terms of class composition and teaching methodologies. While US universities have steadily maintained a 20%-40% ratio of international vs. national students, in European universities, such as INSEAD, this figure may go up to 80%-90%.
Do you know you can save upto $624 or INR 43,000 on your GMAT preparation costs. Learn how much it actually costs to take the GMAT?
MBA Salary Components
Following are the typical components of an MBA salary:
- Base Pay
- Signing Bonus
- Performance Bonus
- Other Guaranteed Compensation
- Stock options
- Tuition reimbursement
- 401k Match
A fixed and recurring amount paid to employees generally expressed an annual salary. It does not include any benefits or bonuses.
This is a one-time inducement offered to employees when they join an organization. Depending on your employment industry, signing bonuses can be standard or rely on other factors such as region, etc. E.g., according to the Management Consulted 2023 consulting salary report, Bain & Co., BCG, and McKinsey & Co. offered signing bonuses of $5,000.
A performance bonus is an additional compensation awarded based on performance appraisals as a reward for achieving specific goals or predetermined targets. It is typically awarded annually and is a one-time award.
Other Guaranteed Compensation
Based on the industry of your post-MBA job you may receive some or all of the components that usually come under this head of compensation.
Stock options or other forms of equity most commonly awarded to MBA graduates choosing careers in technology are a form of compensation awarded to retain talent and align employees with the organization’s longer-term goals.
Compensation offered as stock options, and equity generally has a vesting period associated with them and are not available immediately to employees.
Tuition reimbursement assistance
Tuition reimbursement assistance is generally offered to graduates who choose to return to their pre-MBA firms after completing their MBA degrees. 40% of US employers offer sponsorship for MBA programs, according to GMAC’s corporate recruiter survey.
Profit-sharing is a way for organizations to share yearly profits with their employees. These may vary across industries and job levels.
401k is a retirement savings plan offered by employers to their employees and enables employees to save and invest a part of their paycheck before taxes are calculated. Many employers offer to match employee’s contributions up to a certain percentage of their salary.
MBA Salary - Key Takeaways
- A high GMAT score opens the door to better opportunities and hence the opportunity to earn a significantly higher MBA salary. On average, a GMAT score of 675+ can earn you $152,933 post-MBA salary
- Consulting, Financial Services, and Technology are the industries that offer the highest average salaries over $100,000
- Your work experience plays a big role in deciding the level at which you start your post-MBA job. This job level eventually defines your salary. In India, you can earn an avearge base salary of 5 lakhs for financial analyst, 13 lakhs for Financial controller, and 34 lakhs for chief finance officer. So, your earning power increases at earn job level
- Your post-MBA Salary also depends on the country you decide to work in or do MBA from. MBA in India can earn you an average MBA base salary of 8 lakhs. Whereas, MBA in USA can earn you an average base salary of $90,000
As an aspiring MBA graduate, many of the factors discussed above may or may not be in your control, but your control is your GMAT Score. A high GMAT score opens the door to top-ranked Business Schools, and hence the opportunity to earn a significantly higher salary after you graduate. With leading employers that hire candidates straight out of B-Schools demanding that candidates reveal their GMAT scores, a strong performance in your GMAT certainly smoothens out your path to a high paying and rewarding career regardless of geographical location and length of previous experience
We hope that you find this article helpful, in case of any questions please feel free to reach out to us at firstname.lastname@example.org.
Let us help you conquer the first step of getting into top business schools i.e., taking the GMAT. Take a free GMAT mock to understand your baseline score and start your GMAT prep with our free trial. We are the most reviewed online GMAT Prep company with 2100+ reviews on GMATClub as of July 2021.
FAQs- MBA Salary 2023
Post-MBA you can join a variety of industries. The top three industries that offer the highest average MBA salary are Consulting, Finance, and Technology. Here is the average MBA salary by industry:
1. Consulting: $152,470
2. Finance: $129,889
3. Technology: $124,289
The average salary for an MBA graduate from the top 100 business schools in India is approx. INR 11,43,955. However, your salary also depends on the business school. For instance, the average salary for IIMs in 2020 was INR 15,67,373.
The average salary for the top 10 business schools in Canada is CAD 97,200.
The average salary for the top 20 business schools in the USA is above $100,000.
The average salary for an MBA graduate in the UK is approx. £53,351.