The ROI of an MBA
Does Program Length Matter?
An MBA at a top-ranked business school doesn’t come cheap. If you’re thinking about the ROI of an MBA, ask yourself these questions:
- Will the degree help if you plan to change careers?
- Do you expect to receive a large salary boost?
- Can an MBA accelerate your path to a leadership position?
If those answers are yes, then it’s time to consider another variable: whether to do a one-year accelerated or two-year traditional MBA program. One factor that can drive this decision is the expected return on investment. Today we’re diving into an ROI comparison between these two types of MBA programs to help prospective students make informed choices.
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MBA in One Year
A one-year MBA program is like drinking from the proverbial firehose. It’s a fast and focused launch where, in just 12 months, you gulp down a concentrated dose of business knowledge and thrust yourself back into the job market. A shorter program means lower tuition and living expenses. Plus, you start earning again sooner than your two-year program peers, and so can potentially recoup your investment faster.
These programs often attract students with a more extensive work history. “Without a summer internship, the one-year MBA doesn’t offer the same kind of stable path to a job and therefore is more for career advancers than switchers,” MBA.com explains. If you’re already a seasoned professional, a one-year MBA might help you enhance your skills and career quickly.
On the negative side of the ledger, networking opportunities may feel rushed with a one-year program. Building meaningful connections can be challenging in a condensed timeframe. Also, because of the shorter duration, one-year programs offer fewer elective courses. If you hope to do a deep dive into a certain business topic, this limitation could be a drawback.
MBA in Two Years
While that firehose analogy still describes the feeling that many two-year MBA students have, the pace is definitely more leisurely in comparison. The number-one benefit many business school grads cite is the network they built during their MBA. Two years provides ample time to create a robust professional and personal network. Students can attend more networking events and join myriad extracurricular activities that forge stronger connections.
Not everyone enters an MBA program with crystal-clear career goals. When that’s the case, a two-year program is helpful because it allows you to explore various courses and specializations. With more time on your side, you can take advantage of skill-building workshops, leadership programs, and other activities that lead to a well-rounded education.
It’s like a buffet of business knowledge, helping you find your true passion. Plus, two-year programs include a summer internship. This experience not only provides a break from coursework but also valuable real-world exposure and, yes, more networking opportunities!
The obvious downside of a two-year MBA program is the extended financial commitment. You’ll have higher tuition costs, living expenses, and the opportunity cost of not working for two years. While you’re gaining in-depth knowledge, your one-year program peers are already in the workforce. The trade-off between knowledge depth and early career entry can be a crucial consideration.
Comparing the ROI of an MBA in One Vs. Two Years
While there’s some debate as to whether the ROI of an MBA is the same no matter which program route you take, many believe the long-term ROI of a two-year program wins out. As the Rice Jones Graduate School of Business argues, “Graduates of two-year programs experience a return on investment over their lifetime that the one-year model simply cannot match.”
“One-year MBA students do not have much time for networking and relationship building. They jump right away into the full-time job search while cramming their coursework into a single year.
“Because of the limited time frame, one-year students have less time to attend events, meet faculty and alumni, and participate in extracurricular activities than their two-year peers. As a result, it’s harder for them to create genuine, sustainable connections and explore as many career paths as two-year MBA students.”
For those entering the MBA journey with an open mind, the two-year program allows a more thorough exploration of various specializations. The flexibility to try different classes can lead to a more informed career choice, potentially landing you in a field that aligns better with your passions and, consequently, promises a higher earning potential.
Also, with another year of academic preparation, two-year program graduates may find themselves better equipped to navigate the competitive job market. A deeper understanding of business intricacies positions them as more attractive candidates for employers seeking well-rounded professionals.
For some industries, such as investment banking, internships are particularly important. A one-year MBA program is unlikely to provide that critical experience. —Rice Jones Graduate School of Business
The extended timeframe of a two-year program allows for more comprehensive skill-building initiatives, leadership training, and involvement in extracurricular activities. This holistic approach to education fosters personal and professional growth, making graduates not just academically adept but also well-equipped for the complexities of the business world.
What Matters Most to You?
Your personal return on investment, however, is something quite different. Transitioning into a lower-paying but more rewarding job may be well worth it. After all, you can’t measure that kind of personal satisfaction in dollars and cents. Ultimately, the decision between a one-year and a two-year MBA program comes down to your individual goals, career stage, and preferences. If you’re seeking a rapid career boost and are already an experienced professional, a one-year program might be your ROI-optimized path.
On the other hand, if you value a deeper dive into business, extensive networking, and the flexibility to explore various specializations, a two-year program might offer a more fulfilling ROI. In the end, it’s about aligning your program choice with your unique aspirations and circumstances.
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Stacy Blackman Consulting offers multiple services to meet your needs, from our All-In Partnership to test prep to hourly help with targeted tasks. Contact us today for a free 15-minute advising session to talk strategy with a Principal SBC consultant. Here’s a snapshot of the caliber of expertise on our SBC team.
Here’s a snapshot of the caliber of expertise on our SBC team.
Ashley
Ashley is a former MBA Admissions Board Member for Harvard Business School (HBS), where she interviewed and evaluated thousands of business school applicants for over a six year tenure. Ashley holds an MBA from HBS. During her HBS years, Ashley was the Sports Editor for the Harbus and a member of the B-School Blades Ice Hockey Team. After HBS, she worked in Marketing at the Gillette Company on Male and Female shaving ...
×Kerry
Kerry is a former member of the Admissions Board at Harvard Business School (HBS). During her 5+ year tenure at HBS, she read and evaluated hundreds of applications and interviewed MBA candidates from a wide range of backgrounds across the globe. She also led marketing and outreach efforts focused on increasing diversity and inclusion, ran the Summer Venture in Management Program (SVMP), and launched the 2+2 Program during her time in Admissions. Kerry holds a B.A. from Bates College and ...
×Pauline
A former associate director of admissions at Harvard Business School, Pauline served on the HBS MBA Admissions Board full-time for four years. She evaluated and interviewed HBS applicants, both on-campus and globally. Pauline's career has included sales and marketing management roles with Coca-Cola, Gillette, Procter & Gamble, and IBM. For over 10 years, Pauline has expertly guided MBA applicants, and her clients h ...
×Geri
Geri is a former member of the Admissions Board at Harvard Business School (HBS). In her 7 year tenure in HBS Admissions, she read and evaluated hundreds of applications and interviewed MBA candidates from a diverse set of academic, geographic, and employment backgrounds. Geri also traveled globally representing the school at outreach events in order to raise awareness for women and international students. In additio ...
×Laura
Laura comes from the MBA Admissions Board at Harvard Business School (HBS) and is an HBS MBA alumnus. In her HBS Admissions role, she evaluated and interviewed hundreds of business school candidates, including internationals, women, military and other applicant pools, for five years. Prior to her time as a student at HBS, Laura began her career in advertising and marketing in Chicago at Leo Burnett where she worked on th ...
×Andrea
Andrea served as the Associate Director of MBA Admissions at Harvard Business School (HBS) for over five years. In this role, she provided strategic direction for student yield-management activities and also served as a full member of the admissions committee. In 2007, Andrea launched the new 2+2 Program at Harvard Business School – a program targeted at college junior applicants to Harvard Business School. Andrea has also served as a Career Coach for Harvard Business School for both cu ...
×Jennifer
Jennifer served as Admissions Officer at the Stanford (GSB) for five years. She holds an MBA from Stanford (GSB) and a B.S. in Chemical Engineering from University of Illinois Urbana-Champaign. Jennifer has over 15 years experience in guiding applicants through the increasingly competitive admissions process into top MBA programs. Having read thousands and thousands of essays and applications while at Stanford (GSB) Admiss ...
×Erin K.
Erin served in key roles in MBA Admissions--as Director at Haas School of Business at UC Berkeley and Assistant Director at Stanford's Graduate School of Business (GSB). Erin served on the admissions committee at each school and has read thousands of applications in her career. At Haas, she served for seven years in roles that encompassed evaluation, outreach, and diversity and inclusion. During her tenure in Admissions at GSB, she was responsible for candidate evaluation, applicant outreach, ...
×Susie
Susie comes from the Admissions Office of the Stanford Graduate School of Business where she reviewed and evaluated hundreds of prospective students’ applications. She holds an MBA from Stanford’s GSB and a BA from Stanford in Economics. Prior to advising MBA applicants, Susie held a variety of roles over a 15-year period in capital markets, finance, and real estate, including as partner in one of the nation’s most innovative finance and real estate investment organizations. In that r ...
×Dione
Dione holds an MBA degree from Stanford Business School (GSB) and a BA degree from Stanford University, where she double majored in Economics and Communication with concentrations in journalism and sociology. Dione has served as an Admissions reader and member of the Minority Admissions Advisory Committee at Stanford. Dione is an accomplished and respected advocate and thought leader on education and diversity. She is ...
×Anthony
Anthony served as the Associate Director of MBA Admissions at the Wharton School at the University of Pennsylvania, where he dedicated over 10 years of expertise. During his time as a Wharton Admissions Officer, he read and reviewed thousands of applications and helped bring in a class of 800+ students a year. Anthony has traveled both domestically and internationally to recruit a ...
×Meghan
Meghan served as the Associate Director of Admissions and Marketing at the Wharton MBA’s Lauder Institute, a joint degree program combining the Wharton MBA with an MA in International Studies. In her role on the Wharton MBA admissions committee, Meghan advised domestic and international applicants; conducted interviews and information sessions domestically and overseas in Asia, Central and South America, and Europe; and evaluated applicants for admission to the program. Meghan also managed ...
×Amy
Amy comes from the Wharton School of the University of Pennsylvania where she was Associate Director. Amy devoted 12 years at the Wharton School, working closely with MBA students and supporting the admissions team. During her tenure at Wharton, Amy served as a trusted adviser to prospective applicants as well as admitted and matriculated students. She conducted admissions chats with applicants early in the admissions ...
×Ally
Ally brings six years of admissions experience to the SBC team, most recently as an Assistant Director of Admission for the full-time MBA program at Columbia Business School (CBS). During her time at Columbia, Ally was responsible for reviewing applications, planning recruitment events, and interviewing candidates for both the full-time MBA program and the Executive MBA program. She traveled both internationally and dome ...
×Erin B.
Erin has over seven years of experience working across major institutions, including University of Pennsylvania, Columbia Business School, and NYU's Stern School of Business. At Columbia Business School, Erin was an Assistant Director of Admissions where she evaluated applications for both the full time and executive MBA programs, sat on the admissions and merit scholarship committees and advised applicants on which program might be the best fit for them based on their work experience and pro ...
×Emma
Emma comes from the MBA Admissions Office at Columbia Business School (CBS), where she was Associate Director. Emma conducted dozens of interviews each cycle for the MBA and EMBA programs, as well as coordinating the alumni ambassador interview program. She read and evaluated hundreds of applications each cycle, delivered information sessions to audiences across the globe, and advised countless waitlisted applicants. ×
