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Reports shows MBA salary gap increasing
The salary differential between MBAs and non-MBAs in the world’s job markets is growing, according to the recently published TopMBA.com Recruitment and Salary Trends Report 2007.
The survey of 489 international MBA employers reveals that, compared to the previous year, MBA salaries increased more rapidly than salaries for non-MBAs with 4 years of work experience. This is true across most major industry sectors and regions.
In consulting, for example, someone with 4-years experience will earn on average $72,129. A Masters graduate will earn $65,121 and a PhD $77,415 while and MBA graduate earns $99,154. This 137% improvement between the MBA and the earner with 4-years experience is up from last years 132%.
The table below compares the average MBA salary gap by sector between MBA graduates and non-MBA graduates with 4-years experience. The sectors featured reveal a widening gap year-on-year between salaries for new hires with MBAs and those without.
| Industry | 2007 (2006) |
| Consulting | 137% (132%) |
| Financial Services/Banking | 141% (129%) |
| Media/Entertainment | 181% (155%) |
| Manufact./Automotive | 135% (132%) |
| Public Sector/Non-Profit | 124% (118%) |
The TopMBA.com Recruitment and Salary Trends Report 2007 confirms that MBAs are the highest paid postgraduates worldwide, across all major industry sectors. Nunzio Quacquarelli, author of the Report, says of this increase, “Many banks and consulting firms are competing for the same talent, and consulting firms are competing by offering higher salaries. However, many MBAs are being recruited by banks at present because the larger bonuses payable by banks, and investment banks in particular, ensure that they offer the greatest overall compensation for the first year out of business school. MBAs who choose to join banks are judging that the financial sector boom will continue and banks will continue to pay high bonuses resulting in higher overall compensation.”
He continues, “The downside to such high MBA salaries and the growing salary gap with non-MBAs is that some employers become disaffected with MBA hiring, creating a ceiling beyond which they will start to target non-MBAs.” Also, the boom may not continue. Chris Higgins of the Career Service at Wharton reports 779 companies on-campus to recruit Wharton MBAs in 2007, a 9% increase on 2006. “I started working at Wharton in April 2001, just in time to experience the dot.com and consulting crash. Demand for MBAs is cyclical and you never know what is around the corner, but the current market is great and the outlook is pretty good.”
A summary of the TopMBA.com Recruitment and Salary Trends Report 2007 is offered FREE of charge to candidates registering to attend the QS World MBA Tour in Fall 2007. Wharton will be attending all 48 venues of the Tour between September and December 2007.
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Simona Bizzozero
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Notes for the editor:
QS World MBA Tour
The QS World MBA Tour is the largest program of recruitment and information fairs for business school applicants. In 2006 over 70,000 potential applicants visited 64 events in 35 countries. The QS World MBA Tour offers a unique opportunity to meet admissions officers of the world's top business schools at venues around the world. Now in its thirteenth year, the Tour will visit 72 cities on five continents during 2007.
QS TopMBA.com International MBA Recruitment and Salary Report 2007
Since 1990, QS Research, in collaboration with TopMBA.com, has conducted an annual survey of MBA employers worldwide to determine trends in international salaries and recruitment. Responses are received by more than 400 companies. The QS Recruitment and Salary Report is an invaluable source for companies and agencies that recruit MBAs, business school administrators, career services, and MBA students and graduates.
