We’ve just entered into 2022 and just like with New Year’s resolutions, a lot of people are thinking about next steps in their career.

To add, we are also in what everyone calls “The Great Resignation” with people switching jobs at a record pace.

Lots of people are also considering getting an MBA to advance their career.

But…with rising costs of getting an MBA, is it still worth it?

In this blog post, I’ll share my thoughts on a good framework you could use to decide whether an MBA is the right next step for you. Enjoy!

Benefits – Investment = YOUR conclusion

The framework we will discuss is basically the ROI equation you might have seen or used before.

The idea is that you have look at the investment that is also related to YOU and then benefits that are also related to YOU.

What I will do is help you ask the right questions for each piece so that you could come up with your answers. Hence, you’ll see why everyone will come up with their own conclusion.


Investment

First, let’s look at the investment of an MBA. There are generally three categories that you should look into:

  1. Cost of an MBA
  2. Your Time
  3. Opportunity Cost

Let’s go into each one of these separately.


Cost of an MBA

Huge! For a top-tier program, expect to pay somewhere around $150K for the entire program. This doesn’t take into account living and other expenses if you are considering a full-time MBA.

While you could argue that the future earnings will help pay this back, it is still a significant amount of money.


Your Time

You will be taking at least 2 years to complete your MBA. If you’re doing a full-time program, that is generally your primary focus (and hence the opportunity cost).

In addition, you will have to spend time upfront to study for GMAT, apply to programs, and network among other things.


Opportunity Cost

This is very related to your time. By doing an MBA, you are not working full-time for two years which means you are giving up what is basically a full-time salary.

Depending on your role and the company you are in, this is clearly an opportunity cost.  

Not to mention other things or projects you could be involved in – starting your own business, learning other skills, etc.

I don’t mean to be negative and scare you off based on the investment that you will have to make so let’s look at the questions that you should ask yourself to figure out the benefits (which are different for everyone).


Benefits of an MBA

To break this down into sub-categories, let’s consider the following:

  1. Knowledge
  2. Network
  3. Access to Jobs
  4. Credibility

Knowledge

This is a no-brainer. By going through an MBA program, you will have the opportunity to learn from the best in their respective fields.

However, with the increased access to information, I would argue that a lot of the knowledge could be acquired on your own.

Don’t get me wrong – top-tier MBA programs have some of the brightest professors that will share more than what you could find elsewhere.

However, if you are considering doing an MBA just for knowledge, there are individual programs and courses that could help you learn those individual areas and topics.

The downside is that you will have to figure out which areas you need to develop in (e.g. finance, marketing, strategy, etc) and find the best programs for each.

This will be a cheaper alternative than doing an MBA (again, if you are only looking to acquire knowledge).


Network

This is by far the biggest benefit of doing an MBA in my opinion.

You will be exposed to a wide range of people from different backgrounds and you will learn what is expected of them in their respective roles.

The exposure is invaluable.

However, here is a catch. Given the recent changes in people attending classes remotely, this limits the ability for you to network with others.

Now, you will still be involved in group projects and likely interact with others online. However, those happy hours after classes as well as networking events are more valuable to develop your network.


Access to Jobs

It is very difficult to get a job you’ve never done before. Why? Well, hiring managers are all about reducing the risk of hiring candidates that haven’t performed a particular role before.

The recruiters also won’t be bothering you too much for those roles because they generally look according to the guidelines of the hiring managers.

Getting an MBA will definitely help in two ways – 1) Helping you get an internship, and 2) Giving you opportunities to expose yourself to projects in the area you’re interested in.

If you are thinking about switching careers and go into one of these fields (exhaustive list) – investment banking, consulting, tech, finance – then getting an MBA will give you a huge boost in getting access via on-campus recruiting.


Credibility

Once you get your MBA, it will be with you forever. There are no renewals 🙂

People know that getting into an MBA program requires a lot of work. They also know that getting through the entire program takes a lot of work (especially when you have a lot of other priorities).

Hence, using your MBA card will almost always provide instant credibility not just to recruiters and hiring managers but also to people you will be working with as well as your clients (if you are in a client-facing role).

Now that we have gone through the framework and you have thought about each of the aforementioned pieces, ask yourself how some of the answers might change in 2022 and beyond. Will you get the same benefits if some of the classes and events might be done remotely?

There isn’t a one-size fits all answer to whether an MBA is worth it. Rather, you should come up with your own conclusion using this framework.

Hope you were able to think this through – let me know if you have any questions in the comments below and also check out the video version of this post.