What You Get Back when You Invest in an Executive MBA

by mba

Value for money and beyond

For business people who place a premium on efficiency, profit, and making the best possible use of resources, return on investment (ROI) is a key metric. For those experienced professionals who consider returning to school for an Executive MBA, it is a KPI for success.

ROI, of course, is not only concerned with the purely financial aspect of the investment, but also includes all the intangible ways, big and small, in which the degree helps business leaders reach their full potential and break through barriers that previously seemed unsurmountable.

A career supercharger

Ask any EMBA graduate about the best feature of the degree and most will point to the fact that it does not require you to give up a regular pay cheque and leave your job. The delivery and structure of the programme allows experienced professionals to acquire key knowledge and skills and apply them immediately in their jobs.

The networking opportunities associated with the EMBA degree represent another big asset. An EMBA programme enables students to connect with classmates and alumni from different countries who have experience in a wide range of industries around the world. This means that you will be exposed to different ideas, approaches, and perspectives and, most importantly, you will build relationships that will last a lifetime.

Those who have enrolled in an EMBA programme rarely regret it. A 2017 survey by the Executive MBA Council (EMBAC) of more than 1,000 Executive MBA alumni throughout the world showed that the majority of graduates found their EMBA experience worth the investment of time and resources. About 72% of participants responded that the EMBA positively impacted their careers, resulting in advancement and even the launch of their own businesses. The participants in the survey also reported a salary increase of 28% on average in the first five years after graduation.

Multiple paths

Executive MBA participants are a diverse group, with each aspirant’s post-degree goals looking very different. Some see the EMBA degree as a stepping stone to the board. For others, the goal might be to change job functions or industries. Indeed, a growing number of business professionals are looking at the EMBA as a means to help them change careers rather than just climb the corporate ladder. This trend became evident after the financial crisis of 2008. “This is a massive, massive shift,” INSEAD’s Marie Courtois told the Financial Times.

“We see an information technology director or people with 15 years in the telecoms industry who want to move into consulting,” added Courtois, who at the time was head of career development for INSEAD’s executive degrees.

Entrepreneurship is another focal point growing in popularity among EMBA participants. Some entrepreneurs turn to the degree to fill knowledge gaps and gain a more nuanced understanding of business, while others return to school because they want to found their own business, drawing on their experience as corporate leaders. Digital entrepreneurship, an offshoot of the broader trend, is another popular choice among EMBA participants who want to explore the various ways digital technologies enhance innovation and drive business value.

Let’s talk about money

Whatever the direction you choose, the efficiency of the investment remains a key factor. It was Benjamin Franklin who famously said that an investment in knowledge pays the best interest, but let’s examine what this means exactly in the case of the EMBA.

A 2019 survey by EMBAC revealed that EMBA graduates (mostly in the United States) received a 13.5% increase in compensation – salary and bonuses combined – after programme completion. At the start of the programme, the average salary and bonus package stood at USD 205,000. By the end of the programme, the average salary and bonus package increased to USD 232,663. In addition, 40% of those polled said that they received a promotion during the programme and 53% reported increased responsibilities.

The financial parameters can vary widely between business schools. The average salaries three years after graduation for graduates of the 2020 Financial Times top 100 EMBA programmes ranged between USD 97,000 and USD 528,000. Graduates from the EMBA programme of Kellogg School of Management (US) and HKUST Business School (Hong Kong) reported an average salary of USD 528,000 three years after completing their studies. The salary increase for students on the course amounted to 67%. The second highest average salary, of USD 483,000, was reported by graduates of China Europe International Business School (CEIBS), up 87%.

EMBA graduates typically earn significantly more than MBA graduates, mainly because they are more experienced and occupy C-suite positions after graduation. The Financial Times in 2019 estimated the gap in average salaries between EMBA and MBA alumni at USD 74,000 (USD 220,000 vs USD 146,000).

There’s more to life than money

The EMBA degree results in benefits you can measure, but also in benefits that you cannot.

What You Get Back when You Invest in an Executive MBA

“It is so much more than just the technical qualification; it’s about your confidence, humility and the way you approach business and building relationships,” says Rashwan Hammady, EMBA alumnus from the University of Chicago Booth School of Business (US).

Improved confidence is a common thread running through alumni testimonials, and so is the ability of the degree to help business professionals reach their full potential. Kristian Ćurković, who holds an EMBA degree from IMD Business School (Switzerland) and is COO at H1 Telecom in Croatia, says his career was progressing very fast and at times he felt he had skipped certain development stages.

“Before doing the programme I thought I had reached my maximum, but now I recognise that I have become more secure, can focus better, and am even more efficient.”

Students and alumni seem to appreciate the EMBA experience, but what do employers think? The GMAC 2018 Year-End Employer Poll Report shows that 86% of employers say that the value of business school education is high or above average. Staff at business school career centres have similar impressions. “Feedback we get from recruiters is that thanks to the pace of the programme and the diversity of the student body, students are better equipped to perform on the job from day one,” says Christelle Cuenin, Global Financial Services Lead at the INSEAD Career Development Centre.

Hitting the ground running is not easy, and companies typically expect graduates to “get their hands dirty” early on. One of those companies is Amazon, known for its fondness for hiring MBA and Executive MBA graduates. Dee Clarke, head of European Campus Recruitment at Amazon, told BusinessBecause:

“From day one, our MBA graduates are leading teams in our fulfilment centres, working on new, fast-moving products and services, and raising the bar of the customer experience. The responsibility can be challenging, but incredibly rewarding.”

Optimising the investment

Seeking to optimise their investment, many EMBA aspirants consider company sponsorship. There are two facets of sponsorship. The first one refers to a company acknowledging the necessary time commitment an employee needs to complete the programme. The second facet refers to financial assistance, which can range from covering a portion of the tuition cost to providing full financial support. While employer endorsement is typically a requirement for admission, financial sponsorship is not.

There are many advantages associated with a financial sponsorship, the most obvious being that you don’t have to spend your money or take out a big loan. However, you have to be aware of the downsides. If your company agrees to assist you financially, you will be asked to sign a sponsorship contract. One of the most important clauses in such documents is the period which you commit to stay with the company after obtaining the degree. You need to consider all the implications of such a commitment before putting pen to paper.

It’s useful to take an analytical approach when considering whether an EMBA would be worth the investment in time and resources. But when weighing the pros and cons, it’s wise to consider also the benefits that go beyond the financial return.

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