A personal choice
There are a lot of financial decisions that will likely come into play when you look at if doing an MBA is right for you. First and foremost is probably the upfront cost. I know several companies that will foot part of, if not the whole bill for an MBA. It’s pretty stuff to say no at that point in my opinion. You are making yourself more attractive to the company, plus they are sinking money into you so from their investment standpoint they don’t want to lose you purely for that reason. It’s like if you have two quarterbacks who are equally good but one gets paid a lot more. Guess who gets the start? (Unless you’re like my beloved bombers and then everyone is equally incompetent and/or fragile so the decision doesn’t really matter.) Another consideration for young people is how much debt they have on their personal ledger. If you already have several years of post-secondary studies behind you and you followed that up with a few years at sub-par wages because it’s an employer’s market, then you likely still have some fairly substantial student loans to pay off. Adding to this burden can make it appear very unattractive, and is definitely something to consider.
Paying for “who you know”
One interesting fact that continuously came up when I was reading both American and Canadian articles on MBAs is the idea that the most valuable thing you will get out of the experience is not knowledge or even the credential – but instead the connections. Now I should point out that several people were dubious about the value of making connections with a bunch of other people who were trying to make connections and climb the same ladder you were. There are definitely some programs out there that make a strong pitch in regards to their alumni being available for resources and help if need be. I had never thought about that viewpoint of an MBA before.
I came across a couple of interesting perspectives on MBAs when I was doing a little research in order to answer the question of “Is an MBA Worth It?” Anna Ivey from the University of Chicago states, “If [an MBA] is something that you’re doing because you want to make more money, rather than because you’re really interested in how businesses function, you’ll probably be disappointed,” she says. This probably isn’t what you wanted to hear if you thought that hitting the books for a couple more years was going to be your ticket to the top. For a Canadian perspective, I defer to Henry Mintzberg who is a professor of management studies at McGill University and author of “Managers Not MBAs.” He blatantly states that “The MBA trains the wrong people in the wrong ways with the wrong consequences.” It sounds like some of the courses available in the business stream mirror the complete disconnect we see behind theory and practice in the field of education. It’s sort of amazing to me that these sorts of scenarios can continue on, but there seems to be no shortage of demand for the programs so I guess there is little incentive to take note.
Canada’s MBA options
Canadian Business magazine actually has a brilliant breakdown of the top ten MBA schools in terms of return on investment. You can find the complete list of the 45 MBA programs available in Canada here.
Here is a brief summary of some of Canada’s more notable programs and their respective return on investment (measured by tuition cost vs immediate salary increase upon graduation):
- McGill comes in at #1 in the ROI department which is not surprising considering its sterling reputation. While Canadian Business reports that the cost of an MBA there is considerable at $65,000, in 2011 their grads saw an astounding salary increase of 129% to an average of $112,000. This definitely made me sit up and take notice. The school also notes that several opportunities to study abroad are available.
- Studying an MBA at Dalhousie University will provide you with more than just a smattering of East Coast charm and people skills. Their graduates go from $33,000 upon entry to an average of $67,000 for an increase of 103% for those of you keeping track at home. The school pointed out that in 2011 over 80% of the graduating class were offered jobs before graduating.
- If you’re an Ontario person and don’t mind driving a little within the GTA then DeGroote business school based out of Hamilton offers a respectable 91% ROI. Tuition will cost $35,225, but the exiting salary is over $66K.
- If tuition is a major factor for you that consider the University of Saskatchewan’s Edwards School of Business. Students entered the school with an average salary of $40,000 and left at around the $72,000 mark, but the most impressive thing is that this world-class education only costs $24,520.
- One final option that is fast gaining traction in the Great White North is going online to get your MBA. I can vouch for the flexibility of online courses being a major positive, especially when you are trying to work at the same time. The MBA program at Athabasca University is one of the leaders in this field with over 900 current students and boasts that it was the first online MBA in the world. This program costs a very competitive $44,000.
A reality check (as opposed to a pay one)
I have to admit that while McGill’s numbers caught my eye, and the experience seems kind of fun in a geeky educational way, I was a little shocked by the relatively low salaries at many of these schools (both income and outgoing). I always figured the business guys in suits made quite a bit of money (how many years of payments is the BMW amortized over anyway?). By comparison, a Manitoba teacher with a Master’s of Education degree and 10 years of work experience would have come in around $85K automatically in 2011. If you’re in administration of any kind, those salaries jump substantially.
Having a plan
It seems that there were far more successful reviews of MBA programs across Canada from people who went in with solid goals for their degree and plan put in place to take advantage of the credential once they had gotten it. As I mentioned earlier, another major focus for people who got the most out of an MBA was building a solid support group of contacts from instructors, alumni, and other students. It never hurts to have friends in high places I guess. Trying to answer the original question isn’t as easy as I thought it would be frankly. If you have to sacrifice a couple of years of work in order to pay a large tuition and don’t foresee a direct connection to a major increase in compensation, I wouldn’t hesitate to hold back on an MBA despite the fact that you might easily be capable of completing it. There might be other education paths or areas to invest your energy in that yield better results. Like most things in life, if you can get someone else to pay for it you’re golden. Beyond that, if you’re playing with your own money and not the house’s, I would definitely sit down and calculate out a personal cost-benefit scenario before committing to anything.