Is Obtaining an MBA Worth It? It depends

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With the cost of an MBA and Executive MBA on the rise, and with more economical alternatives to traditional business training readily available, the value of an MBA is no longer as evident as it once was. .Kate Monakhova / iStockPhoto / Getty Images

Brett Chang graduated from the University of Toronto in 2013 with an undergraduate degree in history and political science. Six years later, he was ready for a career change and figured that an MBA was the best way to make that transition.

“At the time, I wasn’t really sure what I wanted to do, I just felt it would be good to develop my quantitative skills, my financial skills,” he says.

Chang’s application was accepted by four different business school programs, but he ultimately didn’t choose any of them.

“When I looked at the price of education, when I really weighed what I would gain for that cost, and the opportunity cost of my time. I felt like I could earn so much, I could earn that much by doing something else.

With the cost of an MBA and Executive MBA increasing, and with more inexpensive alternatives to traditional business training, the value of an MBA is no longer as evident as it once was. .

According to Statistics Canada, the average cost of tuition fees for an MBA program in Canada is almost $ 30,000, while EMBAs cost on average over $ 50,000 for the 2020-2021 school year, but fees vary from institution to institution. Tuition Fees at Three of Canada’s Top Business Schools – University of Toronto Rotman School of Management, Western University Ivey Business School, and that of McGill Desautels Faculty of Management – range from $ 83,000 to $ 95,000 for Canadian residents.

Instead of pursuing an MBA, Chang started a media company called The Peak, which offers a daily newsletter and podcast with around 45,000 subscribers. “For an entrepreneur, the skills you learn there, a lot of them don’t impact your business bottom line, and that’s ultimately why I didn’t pursue them,” says- he.

The MBA program has long been viewed as the most direct route to a managerial position, but now there are a variety of lower-cost alternatives that can be equally valuable to students under certain circumstances.

“Beyond the obvious platforms – like Coursera, EdX and Udemy, all of those tools that will help you develop these skills [online] – more traditional brick and mortar universities also do some of these [non-MBA business programs]because they understand that some of your longer term offerings, MBAs and EMBAs, are not necessary for career progression, ”says Teo Salgado, Founder of VerveSmith, an independent education consultant and provider of business counseling. ‘admission.

Salgado says many clients are finding that they can achieve similar career outcomes by earning a degree at a lower cost, such as a certificate in project management, a master’s degree in finance, or the Chartered Financial Analyst designation.

“If a student really thinks about their motivations, their purpose, and takes a look at the landscape to see if there are other options for them besides the MBA, I think students can make better decisions,” he says.

Salgado adds that some industries also value credentials more than others. According to a 2020 to study By the Ivey School of Business, 31 percent of its alumni are now employed by financial hunches, 12 percent work in consulting, and 10 percent are employed in technology. No other industry employed more than six percent of its graduates.

“If they are coming from industries where the ROI may not be the best, I will ask them to take a look at the ranks of their organization or an organization in which they hope to work at the end. ‘future, to take a look at who occupies the leadership positions they aspire to and what kind of education they have received, ”advises Salgado.

The one situation that usually results in the lowest ROI is enrolling in an MBA program before gaining meaningful work experience.

“A lot of employers will say, ‘great, instead of four years of schooling, you now have six years of schooling, but you still have no work experience, you’re still an entry level candidate.” , and they “I’ll pay you like a newbie candidate,” says David Pullara, a marketing consultant and marketing instructor at the Schulich School of Business at York University. “The MBA is like a multiplier, but if you have no work experience, zero times is zero.”

Pullara, whose salary increase after obtaining an MBA from Schulich in 2008 was greater than tuition, says MBA programs are best suited for those who want to take their current career to the next level, in an industry. which grants an education bonus.

“For some people, an MBA is a complete waste of time, and for some people, it’s the best thing they could have done,” he says. “One of the most important things they teach in business schools is that the answer is usually ‘it depends. “”


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