P08-09 MBAS8 SalGap V6 18/2/08 17:44 Page 2
Editorial
CAREERS RESEARCH
The MBA salary gap increases
As employers worldwide battle to recruit the best young business school talent, there is a growing
salary differential between MBAs and non-MBAs.
By Nunzio Quacquarelli
he QS
TopMBA.com International Recruitment Survey and recruitment manager at Goldman Sachs is concerned with the current “high
T
Salary Report 2007, which surveyed 489 international MBA level of expectation versus undergraduates”. Mesha Mott, a recruiter at Mead
employers, reveals that MBA salaries across most major Westvaco USA confirms that “depending upon the school/reputation and the
industry sectors and geographies have increased more rapidly skills sets required, salary requirements may be misaligned with what the
than salaries for non-MBAs with four years of work experience. candidates actually bring to the table.” Such recruiters have reported greater
The report confirms that the MBA is the highest paid postgraduate success looking beyond the traditional pool of top-tier schools, by targeting
qualification worldwide. The highest average MBA salary of any sector (EU and second-tier schools. These schools are increasingly attracting the high quality
North America) is US$99,154, in consulting/professional services, whereas a MBA candidates who, for reasons of budget, specialization, environment or
candidate with four years of consulting experience, without an MBA earns an disdain for rankings, have chosen to spurn the top-tier.
average salary of US$72,129, or US$77,415 with a PhD. These salaries look
unlikely to slacken off, given the forecast increases in demand for MBAs by Benchmarking MBA salaries by geography
consultants over the next few years. MBA salaries in media and entertainment The weak dollar and very strong growth in salary levels in Western European
are the second highest in the survey at US$97,295 compared to just US$53,637 cities have resulted in the latter average MBA salary reaching US$97,358,
for a candidate with four years relevant experience. Only PhDs joining the compared to US$89,540 in North America. North American and Western
aerospace/defense industries match these MBA salaries. Europen MBA salaries range between US$80,000 and US$100,000 in all
On average, an MBA joining a bank will earn US$93,515, compared to sectors, apart from retail. Salaries in other regions seem to be converging on those
US$66,231 for a candidate with four years of banking experience, but no MBA. in North America. Asian salaries today are only 20% lower than those in the US
Many banks and consulting firms are indeed competing for the same talent. compared to 25% lower in 1996. Latin American salaries are only 23% lower
Consulting firms are competing by offering higher salaries. However, banks are than the US, compared to 60% lower in 1996. Only the Eastern European
currently successfully recruiting many MBAs, perhaps because of the larger markets seem to be lagging behind and even these are likely to catch up rapidly
bonuses they pay, (investment banks in particular) which provide the greatest as more Western European companies expand into markets like Romania,
overall compensation for the first Bulgaria and other new EU states.
year out of business school. Accord- Within countries, MBAs in capital
ing to the survey, banking bonuses
“On average, an MBA joining a bank will earn US$93,515,
cities and especially financial
averaged US$46,000 in 2007,
compared to US$66,231 for a candidate with four years
centres, can expect salaries 20%
down slightly on the US$55,000 higher than in smaller cities. The
in 2006. Such bonuses do
of banking experience, but no MBA.”
UK reports the highest average
fluctuate, however. In 2001-2004, MBA salary in the 2007 study, at
banking bonuses for MBAs fell to less than US$15,000 per annum. US$108,372 with a strong influence from London based recruiters. MBA
Overall, the research reveals that in many sectors the gap between salaries salaries reported by companies recruiting in Western Europe, Central,
for new hires with MBAs and new hires without MBAs is widening year-on-year. Eastern and Southern Europe, reveal wide variations. From 1996 to 2007,
The downside of such high MBA salaries and the growing salary differential average salaries for MBA graduates in Asia have risen an impressive 44% in
to non-MBAs, is that some employers become disaffected with MBA hiring, dollar terms. Singapore reports the highest average salary in the region at
creating a ceiling beyond which they will start to target non-MBAs. Andre US$84,983. Average Latin American MBA graduate salaries have increased
Sieger of Hilti finds that this “highly competitive market for MBAs drives by 27% from 1996-2006, to US$69,400 (compared to US$62,600 in 2006).
compensation insane.“ Even the ‘big hitters’ have concerns. Janet Raiffa, a Mexico has the highest average salary at US$78,063.
8 TopMBA CAREER GUIDE
www.topmba.com
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