Having an MBA (Master of Business Administration) has been a long-standing guarantee of moving up the ladder in the business world to reach levels of leadership within an organization. If one wanted a promotion or increased income, earning an MBA was the sure road to reach those goals. Does that still true today, in the year 2020? After international economic upheaval due to a global pandemic, is an MBA worth it?
The answer: it depends.
The Cost of Getting an MBA
The cost of earning an MBA has always been a little steep, in reference to both the actual tuition a student would pay for the advanced education as well as the lost wages it would cost a student to leave the workforce and return to school. The benefits of an MBA have been questioned during the past decade, and that speculation has only increased with a quickly shifting and volatile economy.
During the past decade, the average cost of an MBA program was between $50K to $100K in tuition alone. Add the lost wages to that and for some students, it could personally cost them between $150K to $200K. Many corporations, and even smaller companies, would headhunt employees with an MBA and additional experience.
One way to answer the question “Is an MBA worth it?” is to study the financial return on investment. Historically those with an MBA earn close to three times as much as those without an MBA. The return on investment in the past has always been well worth the time and money spent.
Connections & Purpose
Another factor that often makes an MBA worth it is the opportunity students have to work alongside other brilliant-minded students and professors. Some would argue it’s impossible to put a value on the relationships that are forged during a time when students are seeking to embark on their own entrepreneurship journeys. There are relatively few other settings where such connections could be made.
Another non-financial factor that is worth considering is the purpose behind the earned MBA. Is this going to be for a career change or for career advancement? Will the MBA program being considered provide the student with the technical skills that will allow them to advance in their career? Will they gain leadership skills or opportunities that will make them more marketable to employers? Will they have anything extra to offer in their target industry that isn’t already there once they complete their MBA? After answering these questions, prospective students might have a better vision of why they are or are not earning their MBA.
Career considerations are necessary to determine if an MBA is worth it. Those with an MBA are seeking leadership within organizations. Not every organization or business requires an MBA for it to run properly and be profitable. For example, an individual desiring to open and run a yoga studio does not need an MBA to do so to make it successful. However, an individual seeking to become an organization leader would greatly benefit from an MBA.
The benefits of MBAs have all been tried and true during a time when the economy was strong and moving forward, but things quickly changed with the year 2020 that has students asking, “Is an MBA is worth it?”
For the past 6 years, enrollment in MBA programs has been dropping. This trend is largely due to the fact that professionals are wary of leaving their current employment to enter another two years of education that may or may not benefit them. Currently, many view an MBA more as a risk than an investment in today’s world. Many now view that the traditional MBA courses are outdated. They worked fabulously for the generation before social media and the global economy took hold.
The last quarter of 2020 has wrapped up a year where entire economies shifted at lightning speed with many well-rooted industries struggling to stay afloat. No MBA could have prepared any CEO for what has been experienced during this time, yet some industries and companies have not only survived but thrived during this major shift. One thing every business has learned is that the archaic rules and teachings of the traditional MBA don’t apply to what every industry has experienced during the pandemic. Business plans have been torn up and everyone is learning now in real-world time.
Have Traditional Benefits Carried Over in 2020?
Let’s remember what MBA programs have traditionally provided: an education on core business topics, career opportunities, and networking. Unfortunately, these outcomes are no longer a guarantee with the way things have quickly shifted.
Before, getting a deep and relevant business education came through MBA programs. Now, fortunately, core business courses are widely available online through MOOCs (massive open online courses) such as UDEMY and Coursera. With these classes relatively affordable or even free online, motivated individuals can learn the same managerial, communication, and leadership skills without committing to a full MBA. They can pick the ones that are relevant and implement them as needed in their current careers.
The employment opportunities that were once widely available for MBA graduates have diminished as many companies are instituting hiring freezes, furloughs, and layoffs. Additionally, many companies that once provided meaningful internship opportunities have frozen those as well. At this time, the businesses that are hiring for positions that require an MBA are looking for people who already have experience working in the shifting economy during the past two years.
The last item that MBA students greatly benefited from was the networking opportunities. In the year 2020 networking went digital through Zoom, FaceBook, Instagram, and other platforms. MBA students today will not have digital networking courses and must learn to network on their own in real-time as trends shift from one week to the next.
The Future of MBAs
One thing learned during the COVID era is just how quickly traditional jobs can be automated and outsourced. So where does that leave the aspiring business leader? In a shifting world, gaining managerial skills, interpersonal skills, emotional intelligence, and experience is most important, no matter how you choose to do it. Over the course of the past two years the automation of jobs has increased steadily, and during COVID that only accelerated. It is expected that by the end of 2030 another 25% of jobs will be automated. Add outsourcing to that and there will be fewer jobs in the business world. Those wanting leadership roles need to have the experience and flexibility to change as quickly as the economy does to stay afloat and profitable.
Back to the question: Is an MBA worth it? There was a time and era when it was, no question. For some students that have a specific industry position they are seeking after, an MBA may be their path there. For the majority of students, the post-COVID era may prove that an MBA is not worth the investment or even the risk. The model is now outdated and businesses will need forward-thinking, real-time, problem-solving employees to be competitive in this decade. Those willing to learn new models will be the ones that shape the future.