Using data collected from nearly 7,000 graduate business school alumni as a part of the 2016 Alumni Perspectives Survey, this SlideShare highlights analyses performed by GMAC researchers related to the return on investment of a graduate management education.

1. Alumni Perspectives
Survey Report2016
Return On Investment

2. 2016 Alumni Perspectives SurveyResearch Services
Making the decision to earn an MBA
or other graduate business degree
requires weighing the full cost of
such an investment.
Time Energy Money

3. 2016 Alumni Perspectives SurveyResearch Services
The findings of the
2016 Alumni Perspectives Survey
showcase the quantifiable returns
alumni have received on their
investment.

4. 2016 Alumni Perspectives SurveyResearch Services
Specifically highlighted here are
alumni's monetary returns in terms
of base salary earned over time.

5. 2016 Alumni Perspectives SurveyResearch Services
Methodology

6. 2016 Alumni Perspectives SurveyResearch Services
Return on investment (ROI) is a
simple formula that measures the
amount of return on an investment
relative to the investment’s cost.
ROI =
Investment Return – Investment Cost
Investment Cost

7. 2016 Alumni Perspectives SurveyResearch Services
In this study’s analysis of the ROI of
a graduate management education,
investment cost is:
Total out-of-
pocket
program
costs
Forgone
pre-degree
salary
+

8. 2016 Alumni Perspectives SurveyResearch Services
For investment return, alumni
provided salary data for three time
periods:
Pre-
degree
base
salary
Post-
degree
base
salary
Current
base
salary

9. 2016 Alumni Perspectives SurveyResearch Services
To determine ROI at various points in
time (3, 5, and 10 years post-graduation),
a compound annual growth rate (CAGR)
was calculated between post-degree and
current base salary.
CAGR =
Current Salary
Post-Degree Salary( ) -1
1
# of years
post-degree
employment

10. 2016 Alumni Perspectives SurveyResearch Services
Using data collected from nearly
7,000 graduate business school
alumni, GMAC researchers were able
to calculate:
Median
Total
Investment
Cost of a
Degree
Initial
Boost in
Base
Salary
Post-
Degree
Average
Years to
Recoup
Investment
Median
ROI at 3, 5,
and 10
Years Post-
Degree

11. 2016 Alumni Perspectives SurveyResearch Services
ROI for Full-Time
2-Year MBA

12. 2016 Alumni Perspectives SurveyResearch Services
On average, it takes alumni of
full-time 2-year MBA programs
3.5 years to recoup their b-school
investment.
Total
Investment*
Initial Boost in
Base Salary*
Years to Recoup
Investment
$105,000 $30,000 3.5
*Median, US dollars.

13. 2016 Alumni Perspectives SurveyResearch Services
Median Cumulative Post-Degree Base Salary (US$)
3 Years 5 Years 10 Years
$348k $590k $999k
Median ROI
3 Years 5 Years 10 Years
37% 132% 445%
On average, in 10 years following graduation
full-time 2-year MBA alumni earn nearly $1
million (USD) in cumulative base salary.

14. 2016 Alumni Perspectives SurveyResearch Services
The ROI of a full-time 2-year MBA
fluctuates relative to economic conditions.
-20%
0%
20%
40%
60%
80%
100%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
ROIatthreeyearsaftergraduation
(3-yearrollingmedian)
Graduation year
3-year ROI rolling median
Linear (3-year ROI rolling
median)
ROI at 3 years after graduation, by graduation
year (3-year rolling median)
3-year ROI
declined
during the
recessionary
period of the
early 2000s,
and was
stagnant
during the
Great
Recession.

15. 2016 Alumni Perspectives SurveyResearch Services
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
USdollars
Graduation year
FT 2-YR MBA investment costs
Post-degree salary
Total investment costs of a full-time
2-year MBA are growing at a faster rate
than starting salaries.
Total investment and post-degree salary, 3-year
rolling median adjusted for inflation (2012 dollars)
Despite this,
adjusted
starting salary
has increased
over the past
20 years, and
the value of
an MBA
remains
strong.

16. 2016 Alumni Perspectives SurveyResearch Services
ROI of Other MBA and
Business Master’s
Degrees

17. 2016 Alumni Perspectives SurveyResearch Services
On average, it takes alumni of
professional MBA programs 2.5 years to
recoup their b-school investment.
Program Type Total Investment*
Initial Boost in
Base Salary*
Years to Recoup
Investment
PT or Flexible
MBA
$25,000 $10,000 2.5
Executive
MBA
$25,000 $10,000 2.5
Online MBA $25,000 $10,000 2.5
*Median, US dollars.

18. 2016 Alumni Perspectives SurveyResearch Services
Alumni of specialized business master’s
programs recoup investment costs faster
than MBA grads.
Program Type Total Investment*
Initial Boost in
Base Salary*
Years to Recoup
Investment
Master of
Accounting
$35,000 $45,000 0.8
Master of
Finance
$35,000 $22,500 1.6
Master in
Management
$30,000 $30,000 1.0
*Median, US dollars.

19. 2016 Alumni Perspectives SurveyResearch Services
Download the
full report at
gmac.com/alumniperspectives

20. 2016 Alumni Perspectives SurveyResearch Services
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