MBA graduates can demand big bucks but salary is just one of many attractions

We may not be quite so mercenary as in the Eighties, but the size of the pay cheque is still important, and few starting out on an MBA would profess indifference to the prospect of sharply increased earnings. But is it still a feasible aim to double your salary by doing an MBA? The short answer is yes. A brief glance down the lists that rank MBA programmes under various headings shows numerous business schools reporting salary increases around 100 per cent. But there are several important qualifications.

The first is a mathematical one. As every good spin doctor knows, statistics based on percentages can mislead. A salary rise from £15,000 to £30,000 is, of course, a 100 per cent rise, whereas one from £50,000 to £75,000 is 50 per cent, even though in absolute terms it's bigger.

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At Cambridge University's Judge Business School, for example, the average salary increase recorded by the 105-strong full time MBA cohort who finished last September was an impressive 66 per cent. However, this masked some startling extremes, which, according to Cathy Butler, MBA careers director at Judge, should be kept in perspective

"If we look closely at the salary increase split by pre-MBA region, the results from other parts of the world outside the US and Europe feature figures as high as 200 and 300 per cent." she explains.

"However, the averages of those from pre-MBA locations such as UK, Europe and North America, while not hitting former heady percentages, also reach beyond 50 per cent."

At Lancaster University Management School (LUMS), Cana Witt, MBA career development manager, has also seen some gigantic increases. "Last year an Indian woman went back to India after her MBA and got three times her salary, and a woman returned to China to a salary six times what she'd been earning before."

These rises have helped push Lancaster's average up to 114 per cent - the fourth best performer in the UK - but Witt concedes that, for LUMS students staying within a European or North American employment market, rises, though substantial, are usually well below 100 per cent.

Another key component is the time in someone's career that they choose to do the MBA. "People in their late twenties or early thirties who've acquired some professional experience but have yet to make a substantial career leap are at the optimum point to get the best out of an MBA, in salary terms," says Witt.

However, there are several other factors that affect, and explain, raw data on salary increases, all closely linked to the underlying reasons for embarking on an MBA. These include a desire to change career direction or location, industrial sector, or job function within a sector. To expect to achieve one or more of these by doing an MBA, and land a much bigger salary as well, might be ambitious.

Statistics from Cranfield School of Management, for example, illustrate the point neatly. The most recent cohort of MBA graduates saw their salaries rise by 33 per cent on average, which might appear modest. However, 82 per cent of the cohort had achieved a change of function and 64 per cent changed sector.

Steep increases are often not immediate. "You tend to see the biggest growth two or three years after an MBA," says Diane Morgan, director of career services at London Business School (LBS).

And at LBS, Morgan has observed a change in the mix of recruiters showing keen interest in hiring MBA graduates. Alongside the continued prominence of accountancy, finance and management consultancy firms, there's now marked activity from energy and technology employers, often looking to fill leadership gaps due to retirements, and pharmaceutical and healthcare businesses.

By the time students are considering firm job offers, Morgan observes the salary factor slipping behind exact nature of job and possibilities for the future. This matches the overall analysis of Simon Tankard, head of careers services at Oxford University's Saïd Business School.

"It's not just the salary component that's important," he concludes. "Candidates are equally concerned to look at their career prospects, job content and the relevant sector experience that the opportunity will give them. And recruiters know that these factors play a key role in securing the best candidates.

''My main motivation for doing an MBA was to learn more and change direction'

Kate Green, 26, finished a full-time MBA at Lancaster University Management School last December, and is now working as an internal business consultant for a passenger transport firm in the North West. Before, she'd owned and run two mobile phone shops. Her salary has increased from in the region of £25,000 to around £45,000.

"I was running my own business, but realised that there was so much about business that I didn't understand and found a bit baffling. I thought an MBA would help me get a more holistic view of how business works. Plus I knew that I might one day want to work for a plc, and knew that wouldn't be possible without an MBA.

"The main motivation for doing an MBA was to learn more and change direction, but of course I knew that I would earn more as well. Most of us started the course talking about how much more money we were going to earn, and to some extent that gives you peace of mind, because you know you'll re-coup the cost of the course - for me £25,000.

"But by the end most people were more concerned to be going into an interesting job, and not just a mundane one with a big salary.

"I got offered two jobs with higher salaries but chose this one because I thought it would be interesting and right for me."