Mba Salaries And Working Hours

ext">MBA salaries are a key factor which MBAcommunicate this benchmarking to the recruiter. In at
candidates consider when selecting a business school.least one case, a top-tier consulting firm has
In this article we provide information about currentincreased its offer for the entire entering MBA class
MBA salaries as well as an analysis of working hoursin order to match competitors. No MBA graduate can
and hourly wages for various MBA job functions.count on the promise of a performance bonus,
According to the QS International Recruiter Surveymaking financial planning, including meeting minimum
2009, despite the recession, or perhaps because ofloan repayments, more difficult.
the need to restore their reputations amongst topPerformance bonuses, whether tied to individual,
MBA candidates, banks in the US offered the highestteam or company performance, are a means for an
total compensation to MBAs in 2009 at $130,000,employer to introduce variable compensation and to
ahead of Consulting - $120,000, IT - $120,000 andensure they do not make financial promises they
Energy - $118,000. All sectors, apart from Defense,may not be able to keep the report says.
Government and Transportation, offered totalWhile MBA salaries is an important factor in
compensation ranging between US$100-140,000.understanding post MBA career options, it’s
Salary stagnation was a major concern fornot less to understand what working hours you will
candidates this year as the gap between supply andbe expected to commit. Dynamics of the Gender
demand widened. Recruiters have the bargainingGap for Young Professionals in the Financial and
power to determine how many jobs they will postCorporate Sectors, a research piece published in
and at what level they will set MBA starting salaries.January 2009 by Chicago Booth and HBS
However, employers surveyed stated that theyresearchers1, shows that weekly hours are high for
planned to maintain salaries at 2008 levels.almost all MBA positions. Hours are highest in
According to the report, Western European salariesinvestment banking and consulting. The average
have been relatively stable since the crash. In reality,investment banker puts in a whopping 74 hours per
an MBA graduate today will face similar prospects onweek, the average consultant 61 hours per week.
either side of the Atlantic. Salary levels in financialAlso reaching close to the 60 hours per week mark
services and consulting are very similar in bothare those employed in venture capital and sales and
regions as are technology salaries and those intrading.
general industry. The recent strength of the US dollarMean earnings by gender are comparable directly
means that average European salaries reported in USfollowing MBA receipt but they soondiverge. Women
dollars have fallen this year to $87,000, but in Euroearn $115K on average at graduation and $250K nine
terms they have remained stable. There is a greatyears out; men earn
variation in salaries across the region. The United$130K on average at graduation and $400K nine
Kingdom, France and Switzerland are paying theyears out. Median salaries by gender also diverge in
highest MBA salaries, all with averages of $100,000 orfavor of men with years since graduation but not by
more, well ahead of the regional average. MBAas much as do mean salaries. The median female
salaries in Germany and the Netherlands haveMBA starts her career at the 34th percentile of the
dropped back below the average for the region,male distribution but after 15 years has fallen to the
though this may be explained by the fact that fewer19th percentile. ZoomInterviews will explain this
(and a higher proportion of smaller) companies inphenomenon in one of our following posts.
these countries have responded to the survey thisFinally to complete this analysis and provide more
year.comparable information we combined the salaries
Because of fluctuations in the exchange rate, MBAstatistics by function collected by the University of
salaries by sector, in US dollar terms, have droppedChicago Booth School of Business and working hours
this year. Consulting offers are averaging $92,000.statistics reported in the Dynamics of the Gender
Financial Services offers are averaging $89,000Gap for Young Professionals in the Financial and
(these figures exclude bonuses). The highest salariesCorporate Sectors report1. This data does not include
have been offered by IT/Computer servicesyear-end performance bonuses because of high
companies, which average $95,000.variability of this item.
The average first year bonus guaranteed for newDespite a perception of high salaries in investment
MBA hires across North America/Western Europe inbanking, in reality, hourly wages for this industry
2009 was US$21,700 - down compared to the 2008were the lowest among all MBA jobs. Investment
figure of US$26,875. This bonus, which is typicallybankers work approximately 74 hours per week and
used to repay school fees, is the area of MBAreceive $34 per hour. However, higher performance
compensation employers have felt most comfortablebonuses in investment banking compensate for this
cutting during times of recession.gap. According to our calculations, in order for the
The average reported bonus ranges between US$0hourly rate to equal that of other job functions, the
and US$40,000 depending on the industry sector.minimum annual bonus would need to reach about
Banks are still reporting the largest average bonus at$45,000.
US$37,500, only slightly down from the previous year.The hourly rate in other MBA job functions can vary
The Energy sector is also offering bonuses in excessfrom $42 to $46, while working hours vary from 61
of $30,000, probably caused by their need tohours per week in consulting to 50.8 hours per week
compete with banks and consultants to attract topin operations.
talent.We would advise MBA applicants to consider a range
The Consulting sector is offering slightly lowerof factors including future salaries, bonuses, life work
bonuses of $28,000 on average, compared with thebalance and general career potential in choosing their
previous year.post-MBA career. However, while these
The sectors which have reduced MBA bonuses theconsiderations are important, in our view the most
most are: manufacturing (down from over $30,000important factor in making your career decisions is
to $20,000) and high tech (down from over $30,000doing what you really like. This is especially true when
to $22,000).you know that the per hour wage, at least in your
MBA bonuses have tended to be volatile in the pastfirst few years after graduation, will be the same in
and it may be that if MBA demand bounces back inmost job functions. While salaries in various job
2010, so will these average bonuses, says the report.functions may diverge in the following years, the
It is important for candidates to understand the fiscalchances that you will earn more in a job that you
status of their bonus. Maximizing after-tax bonusdon’t enjoy are not very high and it’s
value should be prioritized: in some US states,highly questionable if the money is worth the
bonuses are taxed at nearly 50%. In the UK,sacrifices that you will make on the personal level
relocation expenses and tuition reimbursements canaccepting such a job.
be claimed tax-free. In such cases the cost is the1) Dynamics of the Gender Gap for Young
same for the recruiter, but the benefit far greaterProfessionals in the Financial and Corporate Sectors,
for the candidate.January 2009, Marianne Bertrand (University of
Furthermore, an up-front starting bonus carriesChicago Booth School of Business, NBER, CEPR and
greater value than a year-end or performance bonus.IZA) Claudia Goldin (Harvard University and NBER)
Candidates can compare their offers with their peersLawrence F.
to ensure they are getting a competitive offer and