Because you're worth it: is an MBA right for your career?
While an MBA may be an accolade that many who reach the higher echelons of business seem to have, by itself it is by no means a guarantee of success
The chairman of Ireland’s largest company CRH has one from University College Galway and the executive director of DCC has one from UCD Michael Smurfit Graduate Business School, as does Smurfit Kappa’s group financial controller.
But while an MBA may be an accolade that many who reach the higher echelons of business seem to have, by itself it is by no means a guarantee of success.
So is it worth foregoing a year of potential earnings and investing a significant sum in fees just to have those three little letters on your LinkedIn profile? And are people still flocking to get the qualification?
The question of whether or not an MBA is worth it is not a new debate. Philip Delves Broughton explored his experiences of participating in the Harvard MBA programme in his book, Ahead of the Curve, and concluded that leaving a good job to pursue the qualification was a waste of time because MBAs offer a poor return on investment and the much vaunted “network” that you build through the programme can be achieved in other ways.
But despite the naysayers, demand remains strong for MBAs in Ireland. Trinity College Dublin will take on 33 students on its full-time programme this year, up from its 2007 level, while at University College Dublin Smurfit School, 100 students will enrol across its various programmes.
“We’re much, much bigger than we were before,” notes Michael Flynn, MBA director at Trinity College, adding that TCD also now offers a part-time programme.
Both colleges have seen an increase in demand from people looking to invest their redundancy money in a MBA, although this is now starting to taper off.
Executive MBA programmes, whereby students are typically sponsored by their employer to complete the programme on a part-time basis, have suffered however.
At UCD Michael Smurfit Graduate Business School, Orla Nugent, MBA programme director, notes that enrolments on the university’s executive programme are down, “reflecting the difficult economic climate” although this is starting to change.
“We’re seeing a recovery in sponsorship over the past year. Companies are using perks such as training and payment for courses as a method of employee retention rather than raising salaries in an uncertain climate. This year approximately 50 per cent of our Executive MBA participants received some form of sponsorship from their employer,” she says.
Fees in Ireland are largely steady across the sector, with neither UCD nor TCD raising them of late.
Nonetheless they remain steep and there has been a proliferation of MBA courses all across the country, with most universities, and institutes of technology, now offering such programmes.
But is your qualification only as good as the name of the college on your degree? And are any Irish colleges worth such an investment?
Ronan Colleran, managing director of recruitment firm Accreate, doesn’t think so. “I would question whether MBAs in Ireland would really be sufficient,” he says, noting that a six- to eight-week programme in a university of the stature of Harvard might be the better option for those looking to enhance their career prospects.
“Some people think Harvard is unattainable – but it’s not,” he says, adding that he believes that an MBA is really only for people who have gaps in their academic record.
“I would only consider self-funding an MBA if there was a gap in my academic background that needed to be filled,” he says, adding, “Outside of that, there’s not much merit in a chartered accountant doing an MBA. It doesn’t warrant the investment in time just to have an expanding network of personal contacts”.
MBAs have also been criticised for not offering enough focus on entrepreneurship and sales.
However for Dave Byrne, who has just completed a full-time MBA at UCD, the year’s reprieve from his work as a technology consultant offered him the ideal opportunity to get a business plan together and take the first tentative steps towards being an entrepreneur.
“As part of the entrepreneurship module we had to write a full business plan for an idea, so it was quite useful to have the space and the support to explore it,” he notes of his social media music venture, Buzzoo.
In addition, he benefited from the network of high profile entrepreneurs who came to speak to his class, and got the opportunity to pitch for his project to serious investors as part of a competition he entered.
“One of the key things about it is that it’s a risk-free environment. You’re very free to just take risks during the year, and if it doesn’t work out then it’s not the end of the world,” he says.
Since graduating at the end of August, Buzzoo has been accepted onto the National Digital Research Centre Launchpad Accelerator programme, where he hopes to bring his fledgling company to the next stage.
Apart from the entrepreneurial route, there are still good career options out there for those graduating from an MBA programme. According to Nugent, sectors which are actively hiring include management consulting, technology, digital media and life sciences.
“Even in financial services there are little niches, but it’s about being able to identify and get introduced into them,” adds Flynn, adding that aviation finance is one such sector.
However, if you think that an MBA will immediately set your salary soaring, it might be wise to re-consider. Colleran regularly sees the “biggest disappointment” on candidates’ faces, when they’re told what their salary expectations might be post-MBA.
“Post-MBA, you’re probably worth more than if you hadn’t done it. But it’s a slow burn in terms of transferring that to the opportunities available to you, or to the level of remuneration you’ll be paid afterwards,” he cautions.
Indeed at Trinity, the average starting salary for graduates of the MBA programme is about €100,000, while UCD estimates a 70 per cent up-lift in your salary, according to the FT global guide, with an average starting salary of about €82,000.
“You do change your job prospects with an MBA, but what I have found is that people are less fussy than they were before. There is a bit of compromise on both sides,” says Flynn.
However, perhaps the real value in an MBA is if it helps you get to somewhere that previously wouldn’t have been possible.
Indeed for Byrne, bringing Buzzoo to this stage may not have been possible without taking the chance to leave his old job and focus on the new project.
“It’s very difficult to get the space to explore different options, and you find that a lot of doors aren’t open to you because its difficult to sell yourself as anything other than what you’ve been doing,” he says of his previous position, adding,
“But I feel like the MBA has given us the skills we need to set up and run a business.”
Added value: How much does an MBA cost?
Total fees(FT global ranking 2012 in brackets)
Stanford, US€90,293 (1)
London Business School€72,649 (4)
University of Oxford€65,700 (20)
Insead, France€58,000 (6)
University of Limerick€27,200 (-)
Henley MBA, IMI€25,000 (-)
IBAT€10,000 (-) **
*Trinity doesn’t participate in rankings
**Part-funding of €3,000 available