How Much Does an MBA Increase Your Salary?

Professionals looking to change careers have the potential to experience some of the strongest salary increases of all MBA graduates. Individuals who transition from a traditionally lower-paying career field, such as teaching or social work, to a higher-paying profession, like management consulting, often see a larger salary increase compared to workers who use their MBA as a stepping stone for a promotion.

Many MBA graduates use their degree as a tool to help them switch career paths. That makes the MBA a powerful tool for professionals who are seeking to take their careers in a new direction. Read on to learn more about how much an MBA can increase your salary, MBA degree salary outcomes and pertinent factors like geographic and industry-specific variables.

The Value of an MBA for Career Changes

An MBA can help you make a strategic career transition by giving you the skill set and credentials that most employers look for when filling higher-level roles. With an MBA, you’ll have a strong foundation in business fundamentals, which can translate across a wide range of industries and careers. This is particularly valuable for professionals who are looking to pivot from individual contributor roles into management.

There are many common career pivots that show the versatility of an MBA. Armed with an MBA, teachers might become corporate trainers or management consultants at white-shoe firms such as McKinsey or Bain & Company. Military veterans may pivot into the lucrative private equity space, and former nurses can use their MBA credentials and newfound knowledge to climb into the higher rungs of healthcare administration.

An MBA provides a powerful pathway for professionals seeking to pivot into new industries or roles. It provides students with meaningful exposure to a diverse range of professions, many of which are difficult to break into without relevant experience or an advanced education.

Factors That Influence Salary Growth

Multiple factors determine your potential MBA salary increase. Among these, program rankings play a major role. Top-ranked business schools consistently produce graduates who command higher starting salaries, which often translate into significantly better lifetime earnings. Many elite programs, for example, report average compensation packages close to, or in some cases over, $200,000.¹

Where you live is another key factor that will play into your eventual salary as an MBA graduate. Schools in large cities often have established relationships with local industries, which tend to pay more than companies in rural areas.

Your prior professional experience can also come into play. If you have a sought-after skill set, it can help you command a higher starting salary in some instances. Finally, certain industries and professions pay more than others. For example, a product manager at a high-profile tech firm may earn more than someone in a similar role in a more staid industry.

MBA Graduate Salary Average in the US

MBA graduates earn an average salary of roughly $165,000 per year.² That represents a significant premium over non-MBA holders.

Does an MBA increase your salary compared to holding just a bachelor’s degree? The answer is a yes. An MBA builds on the foundation of a bachelor’s degree and provides deeper, broader, and more practical business expertise that can significantly accelerate your career. This degree can position you for management and executive-level opportunities, often serving as a gateway to leadership positions. This is why MBA graduates typically earn roughly three-quarters more than individuals who have only an undergraduate degree.³

Average MBA Salary by State

As stated previously, where you live plays a role in how much you can expect to earn after graduation. MBA pay varies substantially by state. This can be explained by variations in industries and the presence of higher-paying roles in certain areas. The location’s cost of living also factors into the equation.

The following states have the top MBA salaries:²

• Washington: $187,300
• New York: $180,923
• Massachusetts: $180,607 
• Alaska: $178,097
• Vermont: $175,833    

How Much Does an MBA Increase Your Salary Across Industries?

The industry you choose to work in will have a dramatic impact on your salary potential. For example, finance, consulting and technology often offer larger compensation packages compared to other industries. Roles like management consulting and product management at top tech firms may offer higher compensation packages for MBA grads.

An MBA Offers More Than Just a Higher Salary

Beyond increasing your salary, an MBA can add significant value to your career and life. An MBA will improve your professional development by enhancing skills that translate across industries, such as your strategic thinking and leadership capabilities.

MBA programs also offer extensive networking opportunities. This enables you to meet with professionals across diverse industries and roles, allowing for future career pivots and advancement. In fact, many graduates find their networks to be just as valuable as their classroom education.

Compared to more narrow, vocational educational opportunities, MBAs offer a comprehensive pathway to senior leadership roles. You’ll learn about the following fields:

• Finance
• Marketing
• Operations
• Strategy
• Entrepreneurship

Unlock Your Earning Potential With an Online MBA

William & Mary’s Online MBA program offers a flexible learning environment that allows you the opportunity to achieve your career goals without sacrificing your current responsibilities, and you’ll still have access to all of the resources that are available to full-time students. You’ll gain insight into the world of business through rigorous academic coursework that marries practical business skills with preparation in the sort of high-level strategic thinking that is sought out by companies across industries.

Get in touch with an admissions outreach advisor today to learn how William & Mary’s Online MBA can take your career to the next level.