Choosing the right school isn’t the only big decision you must make. You’ll also need to consider where you want to work (and where you want to live). And those decisions are dictated, to an extent, by the concentration you choose in business school.
School networks and prestige matter, no doubt. While an MBA is considered a generalist degree, graduates are an expensive hire. For example, you’ll find starting pay ranging from $142,000 for Stanford grads to $58,000 for Louisiana State MBAs. For many firms, a specialization guarantees—in theory, at least, that a new hire can hit the ground running.
For first years wondering which concentrations offer the highest pay, PayScale recently released their annual “College Salary Report.” Last week, Poets & Quants examined the report in terms of which business schools paid the most (MIT early on and Harvard at mid-career) and produced the grads who felt their work had the highest meaning (Yale, of course). When it comes to concentrations, there is a clear winner.
For the second year in a row, “Strategy” topped the list in both early career pay (median salary for 0-5 years of experience) and mid-career pay (median salary for 10+ years of work experience—with the average respondent being a 44-year-old with 15 years of experience). This year, MBAs with a strategy specialization earned $93,100 to start, up from the $92,200 that PayScale listed in last year’s report. At mid-career, graduates who held a strategy concentration made $148,000, up $3,000 from 2014.
The numbers are based on PayScale’s database of 1.4 million college graduates, who provide data when they search for salary information in their field or region. According to PayScale, data from 232 MBA programs were included in the report.
Along with Strategy, MBAs with a general and strategic management background fare well too. They are tied with MBAs with a concentration in computer science for the second-highest early career pay ($84,000). Their mid-career pay—$144,000—also ranks second, just a hair above MBAs who studied finance and real estate ($143,000). MBAs who study industrial engineering ($78,900), corporate finance ($75,500), and operations management ($74,300) in business school also earn well early on. At the same time, mid-career MBAs who studied economics ($136,000), finance and economics ($134,000), management ($132,000), entrepreneurship ($131,000), industrial engineering ($131,000), and corporate finance ($130,000) also earn a healthy income by mid-career.
Over the years, the biggest gains have been made by MBAs with a concentration in computer sciences (at least among the twenty-highest paying concentrations). Their incomes grew by over 65% between early and mid-career, from $84,000 to $128,000. MBAs who studied industrial engineering (63.6%), strategy (62.9%), and operations and supply chain management (62.0%) also enjoyed the highest growth over time. At the same time, the smallest growth was experienced by marketing management (47.2%), business and marketing (48.9%), and management (49.2%).
Please note, however, that these concentration categories are one drawback to PayScale’s methodology. It is difficult to determine exactly what differentiates each concentration, broad and nebulous as they are. Even more, these incomes don’t include bonuses or equity, a major income source in the financial and startup categories respectively. In addition, the data doesn’t factor in student debt, which can take a major bite out of take home pay (at least early on). What’s more, as alluded to earlier, the rankings are based on a compilation of 232 schools, which may range from MIT Sloan to Abilene Christian. That coupled with the fact that PayScale doesn’t factor in geography, makes such numbers a starting point, not a definitive answer.
However, the data does include some interesting nuggets on how happy MBAs are in their career. As part of the survey that PayScale visitors complete, they are asked, “Does your work make the world a better place?” If you’re hoping to feel good about yourself, health care is the right field for you.
The top three concentrations for high meaning were each found here, led by health care administration at 81%. That category was followed by health care management (80%) and business and health care management (66%). Leadership, in general, scored high with business management and administration and organizational leadership each notching satisfaction rates above 60%.
Ironically, many of the highest-paying concentrations also yielded the lowest marks for meaning. For example, finance and real estate, where graduates earned the third highest mid-career incomes, had the second-lowest level of meaning at 37% (with strategic management coming in first at 31%). At the same time, finance and economics and corporate finance MBAs, who were earning over $130,000 by mid-career, averaged 41% and 42% here respectively. And even MBAs who specialized in strategy—the highest paying concentration—are just getting by. Only 45% of strategists found meaning in their work. As you’d expect, MBAs involved in economics, long known for being the “depressing science” averaged 46% on the meaning scale (despite ranking fourth in mid-career income at $136,000 annually).
This post originally appeared at Poets & Quants.
Image by Startup Mena on Flickr, licensed under CC-BY-2.0.