SO ALL THE hype about how an MBA will increase your salary wasn't just advertising waffle to boost SA's business schools.
According to a recent survey among SA's MBA graduates by website mba.co.za in which 467 respondents representing virtually all SA's business schools took part, there's no doubt that this degree not only brings in extra income, but also improves general business knowledge, management skills and status.
Salaries increased 88%
One of the most important findings is that the average annual salary of MBAs increased from R297 731 before their degree to R560 285, a whopping 88% over three or four years. Though the highest annual salary reported was R3m, it's well known that there are several MBAs in top jobs, who are earning three or four times as much.
This is the biggest local survey of its kind. Business schools in SA formerly relied heavily on statistics from overseas about how an MBA degree can boost your career and the salary increases you could expect. Now for the first time SA has fairly comprehensive figures based on local conditions.
Over 80% of the respondents did their degrees at one of the following eight business schools: Gordon Institute of Business Science (Gibs), University of Stellenbosch Business School (USB), Wits Business School, Henley Management College, the University of Cape Town's GSB, Milpark Business School, the University of the Free State's business school, and the business school at the Nelson Mandela Metropolitan University (Port Elizabeth). Alumni from about 10 other business schools also responded.
Most respondents completed their MBAs in 2003; 3% of them are already CEOs and 14% are top executives. Most respondents (21%) are in financial or related professions, followed by manufacturing (11%) and the IT industry (6%).
Most local MBAs (61%) preferred to do their degrees part-time or in modules. Many business schools recommend this, but at the same time offer full-time alternatives, usually over a year or 18 months. Of the respondents 5,5% did advanced degree courses for executive management.
Immediate impact on earnings
One of the most significant findings in the survey was that the salaries of those involved rose immediately after they had obtained their MBA. The average annual income rose from R297 731 to an average of R393 783 (by 32%).
"The mba.co.za survey is an illuminating look at MBA salary trends," says USB director Professor Eon Smit. But he says that one must bear in mind that earnings surveys always give a distorted picture, because those who are earning the best salaries usually respond most readily, while those who are earning below average tend to be more tardy to respond.
In the survey, 20% of the respondents said that their MBA degrees hadn't really helped their careers.
However, Smit says that the local survey confirms the findings of other surveys done regularly overseas - that an MBA degree is of "substantial benefit".
According to Gibs's academic director Jonathan Cook, the survey confirms that an MBA qualification is a successful investment, but he believes that some of the findings should have been based on a larger group.
"Not about getting more money"
"But remember that an MBA is not merely about getting more money, it also provides several non-financial benefits, such as greater self-confidence and critical reasoning, better analysis and interpretation skills and certainly a broader outlook. I hope that a higher salary is not the only reason to tackle an MBA."
SA's MBA Association says the degree broadens the path to a successful career, but it can never guarantee a flood of job offers.
Milpark Business School GM Barry van der Westhuizen says there's more reason than ever to obtain an MBA. "In SA and elsewhere, more and more employers are appointing people with advanced qualifications."
For SA, which loses a lot of its brainpower to foreign countries, it makes even more sense to have an MBA, because it combines local and overseas management knowledge and skills, Van der Westhuizen says.
Morea Josias, head of career management services at the University of Cape Town's GSB confirms this. "In the past 24 months, there has been a great increase in the recruitment of businespeople with MBA qualifications throughout the world. SA's business schools must take cognisance of this new increased demand."
America's influential Kellogg School of Management, for example, last year experienced a 20%-25% increase in the recruitment of MBA students on its campus.