In an effort to determine the impact of an MBA degree on earnings and career prospects, MBA.co.za recently launched its first ever salary survey. The survey attracted a total of 467 respondents. Although most of the CHE-accredited business schools participated, the majority of graduates obtained their MBA degree at the Gordon Institute of Business Science, Henley Management College, the University of Stellenbosch Business School or Milpark Business School.
Jonathan Cook, executive director at GIBS, says while it is a concern that some schools are not as well represented as others, the survey still gives an indication that the MBA, on the whole, is a successful investment. However, he does caution against drawing conclusions when looking at certain aspects of the results where the sample sizes are relatively small.
Prof Eon Smit, former director of the University of Stellenbosch Business School, feels the results provide a useful snapshot of the MBA salary trends, but notes that income surveys are notoriously biased in the sense that those who do well report back and those who don’t do well will often opt against responding.
“Be that as it may, the MBA.co.za study is valuable in that it confirms the findings of research conducted elsewhere in the world – the market does indeed reward the MBA degree in real terms and rewards it substantially. The message for the industry is very positive.”
SalariesAccording to the survey, the average respondent currently earns an annual salary of R560 285 and the maximum reported salary is R3 000 000. Interestingly, the average pre-MBA salary earned is R297 731 and the average salary earned at the first job post-MBA is R393 783.
|
SALARY COMPARISONS |
|
Salary |
Minimum |
Average* |
Maximum |
|
Annual salary pre MBA: |
R7 200 |
R297 731 |
R1 500 000 |
|
Annual salary at 1st job post MBA: |
R12 000 |
R393 783 |
R1 800 000 |
|
Current annual salary: |
R90 000 |
R560 285 |
R3 000 000 |
|
*Extreme and outlier values were removed when calculating the average salary figures |
The survey indicates that the average annual salary increased by 32% between the periods before obtaining an MBA and the first job after obtaining the degree, which Smit says equates to a real annual increase of almost 20%. What may be more noteworthy is that the average annual salary increased by 42% between the first job after obtaining an MBA and the current job. However, Cook believes this second measure should not be too heavily weighted, as the periods in which job changes take place are not included in the data.
“Not surprisingly, there is quite a large differential between the first and fourth quartiles,” says Cook. “This could be explained in part by the variances in working experience, which range from as little as two years to 40 years.”
|
SALARY COMPARISONS (QUARTILES & PERCENTILES) |
|
Quartile |
Lower Quartile |
Upper Quartile |
90th Percentile |
|
Annual salary pre MBA: |
R180 000 |
R400 000 |
R500 000 |
|
Annual salary at 1st job post MBA: |
R240 000 |
R510 000 |
R680 000 |
|
Current annual salary: |
R387 250 |
R750 000 |
R950 000 |
|
Lower Quartile: 75% of respondents earn more and 25% earn less than this figure
Upper Quartile: 25% of respondents earn more and 75% earn less than this figure
90th Percentile: 10% of respondents earn more and 90% earn less than this figure |
ExperienceWhile the survey reveals that respondents with the most work experience earn the most, position and industry are also important considerations, with certain jobs and industries traditionally paying more than others.
|
ANNUAL SALARY ACCORDING TO EXPERIENCE |
|
Experience |
Minimum |
Median |
Maximum |
| 1 - 2 years (2) |
R264 000 |
R307 500 |
R351 000 |
| 3 - 4 years (3) |
R297 000 |
R440 000 |
R600 000 |
| 5 - 6 years (12) |
R126 000 |
R389 000 |
R650 000 |
|
7 - 8 years (35) |
R120 000 |
R440 000 |
R1 100 000 |
|
9 - 10 years 48) |
R90 000 |
R420 000 |
R1 750 000 |
| 11 - 12 years (48) |
R139 302 |
R500 000 |
R1 600 000 |
| 13 - 14 years (24) |
R220 000 |
R550 000 |
R980 000 |
| 15 - 16 years (56) |
R97 000 |
R579 000 |
R1 600 000 |
| 17 - 18 years (39) |
R240 000 |
R550 000 |
R1 665 000 |
| 19 - 20 years (57) |
R158 650 |
R600 000 |
R3 000 000 |
|
> 20 years (139) |
R150 000 |
R600 000 |
R3 000 000 |
|
Median: 50% of respondents earn more and 50% earn less than this figure |
|
ANNUAL SALARY ACCORDING TO POSITION |
|
Position |
Minimum |
Median |
Maximum |
| Academic (14) |
R97 000 |
R213 500 |
R600 000 |
| Accountant (8) |
R90 000 |
R222 825 |
R450 000 |
| Analyst (6) |
R297 000 |
R438 350 |
R700 000 |
| CEO (15) |
R204 000 |
R800 000 |
R3 000 000 |
| Consultant (23) |
R158 650 |
R500 000 |
R2 200 000 |
| COO (5) |
R500 000 |
R810 000 |
R1 450 000 |
| Engineer (6) |
R240 000 |
R557 000 |
R1 000 000 |
| Executive/Director (66) |
R139 302 |
R707 500 |
R3 000 000 |
| Financial Manager (16) |
R180 000 |
R499 600 |
R695 000 |
| General Manager (35) |
R160 000 |
R600 000 |
R1 665 000 |
| Head of Department (18) |
R180 000 |
R560 000 |
R1 750 000 |
| HR Manager (5) |
R240 000 |
R453 516 |
R701 000 |
| Managing Director (28) |
R372 000 |
R925 000 |
R2 000 000 |
| Marketing Director/Manager (10) |
R286 000 |
R480 000 |
R1 200 000 |
| Project Manager (19) |
R160 000 |
R400 000 |
R900 000 |
| Sales Manager (16) |
R350 000 |
R540 000 |
R1 100 000 |
| Self-employed (18) |
R300 000 |
R575 000 |
R1 500 000 |
| Senior Manager (132) |
R120 000 |
R500 000 |
R1 500 000 |
|
Median: 50% of respondents earn more and 50% earn less than this figure |
|
ANNUAL SALARY ACCORDING TO INDUSTRY |
|
Industry |
Minimum |
Median |
Maximum |
| Advertising / Marketing / Public Relations (7) |
R230 000 |
R720 000 |
R1 200 000 |
| Agriculture (12) |
R300 000 |
R545 000 |
R2 000 000 |
| Arts / Entertainment (2) |
R205 000 |
R372 500 |
R540 000 |
| Automotive (15) |
R324 000 |
R520 000 |
R1 665 000 |
| Construction / Architecture (6) |
R240 000 |
R539 000 |
R1 500 000 |
| Consulting (19) |
R240 000 |
R600 000 |
R2 200 000 |
| Education / Training (24) |
R97 000 |
R310 000 |
R1 000 000 |
| Engineering (19) |
R240 000 |
R451 300 |
R980 000 |
|
Environment (2) |
R240 000 |
R345 000 |
R450 000 |
| Finance / Banking / Insurance / Accounting (99) |
R150 000 |
R600 000 |
R3 000 000 |
| Government (14) |
R90 000 |
R380 000 |
R1 200 000 |
| Information Technology (27) |
R300 000 |
R700 000 |
R1 500 000 |
|
Legal (3) |
R264 000 |
R550 000 |
R1 500 000 |
| Manufacturing (53) |
R120 000 |
R542 000 |
R2 100 000 |
| Media / Publishing / Broadcasting (8) |
R240 000 |
R446 758 |
R687 000 |
| Medical / Dental / Healthcare / Pharmaceutical (21) |
R220 000 |
R450 000 |
R1300 000 |
| Mining / Petrochemical (27) |
R260 000 |
R600 000 |
R1 200 000 |
| Non-Governmental Organisation i.e. non-profit (7) |
R160 000 |
R460 000 |
R553 350 |
| Real Estate / Property (5) |
R180 000 |
R600 000 |
R3 000 000 |
| Retail / Wholesale (20) |
R220 000 |
R560 000 |
R2 100 000 |
|
Service (11) |
R275 000 |
R800 000 |
R1 750 000 |
|
Sports (1) |
R155 000 |
R155 000 |
R155 000 |
| Telecommunications (16) |
R158 650 |
R416 000 |
R1 400 000 |
| Transport / Logistics (15) |
R250 000 |
R550 000 |
R1 500 000 |
| Travel / Tourism / Lodging (9) |
R160 000 |
R480 000 |
R1 200 000 |
| Utilities / Parastatals (6) |
R204 000 |
R517 000 |
R986 000 |
|
Median: 50% of respondents earn more and 50% earn less than this figure |
AgeSurvey respondents falling within the 40 to 49 age bracket earn the highest annual salaries on average, with almost 30 individuals earning R1 000 000 or more.
|
ANNUAL SALARY ACCORDING TO AGE |
|
Age |
Minimum |
Median |
Maximum |
| < 25 (0) |
- |
- |
- |
| 25 – 29 (21) |
R217 000 |
R390 000 |
R700 000 |
| 30 – 39 (200) |
R97 000 |
R500 000 |
R1 750 000 |
| 40 – 49 (191) |
R90 000 |
R600 000 |
R3 000 000 |
| 50 – 59 (48) |
R150 000 |
R572 500 |
R3 000 000 |
| > 59 (3) |
R500 000 |
R570 000 |
R1 080 000 |
|
Median: 50% of respondents earn more and 50% earn less than this figure |
GenderSmit says the percentage of female to male respondents is fairly representative of female representation at most schools, and the number of women signing up for the MBA degree is rising steadily.
|
ANNUAL SALARY ACCORDING TO GENDER |
|
Gender |
Minimum |
Median |
Maximum |
| Male (368) |
R90 000 |
R550 000 |
R3 000 000 |
| Female (95) |
R97 000 |
R480 000 |
R1 600 000 |
|
Median: 50% of respondents earn more and 50% earn less than this figure |
Cook finds it interesting that men are still out-earning women by a considerable margin
(23%). “This is confirmed by other surveys I’ve seen. However, there is a possibility that women are in lower paying positions. In order to give real meaning to the findings, we need to compare men and women in the same job category.”
MobilityA concern employers often raise about sending their managers on an MBA programme is that they will leave the company once they’ve qualified. However, the survey indicates that job mobility after obtaining the qualification is minimal.
|
JOBS & PROMOTIONS |
|
Gender |
Minimum |
Average* |
Maximum |
|
Number of jobs since obtaining an MBA |
0 |
1 |
20 |
|
Number of promotions since obtaining your MBA |
0 |
1 |
10 |
|
*Extreme and outlier values were removed when calculating the average number of job and promotion figures |
Not all about the moneySmit says it is important to look beyond the financial rewards associated with an MBA degree. “You cannot put a monetary value on learning and personal development. This sentiment is backed up by the fact that 80% of respondents felt the degree had helped to advance their career.”
Cook agrees. “It’s good to provide measures that will give people an indicator of the financial return on what is a substantial investment, particularly in terms of time. But the financial return is only part of the picture; the non-financial rewards are considerable and include personal rewards like increased confidence, the ability to express one’s point of view, think critically, and analyse and solve problems. The benefits for the employer are a manager with a much wider world view and a broader perspective on business.
“I would hope that salary isn’t the only motivator for doing an MBA, because if it is, the student will find it a long, hard slog. True, it should provide that benefit, but there’s so much more, not least of which is to grow capacity.”
Implied in the data is that the MBA in itself doesn’t necessarily lead to increased salary, but that the increased performance which the MBA enables can do so,” says Cook. “Applicants keen to get an MBA to make them manage more effectively have the right idea. If they expect the MBA to do it for them without any effort on their part, they’re going to be very disappointed.”
Click here to view a complete summary of the MBA.co.za Salary Survey data.