Ask ten people “is an MBA worth it?” and you are likely to get ten different opinions.
Unlike graduate engineering degrees a Master of Business Administration (MBA) contains comparatively nebulous, inexact subject matter. Graduate business degrees also come at a comparatively high opportunity cost – most MBA programs seek candidates with several years experience (as opposed to typical graduate degree programs whose applicants are primarily college seniors). Mid-career candidates are forced to choose between two unpalatable choices: pursue a part-time MBA program while working full-time… or forgo two years worth of salary to attend school full-time.
Still, an MBA may be a valuable investment if you are interested in a career beyond technical problem solving or the lab.
EngineerJobs.com talked with Jay Rogers, Vice President of Recruiting for Randstad Engineering, Matt DiGeronimo, Managing Director of Smith Floyd Mergers & Acquisitions and former Navy Nuclear Submarine Officer, and Dennis Chandler, who holds an MBA from Purdue in addition to his MS in Mechanical Engineering – to discuss the value of an MBA on an engineering career.
Identifying the Cons to an MBA
The total cost of an MBA, inclusive of tuition as well as two years of foregone salary, has risen to “four times the post-degree starting salary in the past 10 years” according to Fortune magazine. And in the case of Stanford Graduate Business School, for example, PoetsandQuants calculates the total cost to be “a whopping $351,662.” Full-time MBAs, however, at least have the luxury of being able to focus on their studies exclusively and have unrestricted access to all the program’s resources (including career services).
Part-time MBA programs are more affordable financially, but their principal cost is even more finite – time. For these students juggling work and school leaves very little time for having a social or personal life. The degree also takes longer to complete; typically three years in the United States. In addition, some MBA programs restrict on-campus recruiting to those with full-time status, and part-time students may not have access to all the programs or classes afforded their full-time counterparts.
Executive MBA students, like their full-time counterparts, are able to complete their degree in two years. Admission, however, is usually restricted to applicants with more than ten years experience (TopMBA.com’s survey determines the average age of students to be 37). The EMBA is also the most expensive degree to obtain on the basis of tuition alone; for example, in 2012 the tuition to attend Wharton is $171,360. For most people, this is cost-prohibitive if their employer is not sponsoring the education. And, like part-time MBA students above, EMBA students still have to wrestle with the time management problems of attending school while working full-time.
Not Necessarily a Prerequisite to Leadership Positions
When asked what the most important criteria for promotion to management positions were, our interviewees all independently volunteered that experience is the single most important factor. According to Jay Rogers of Randstad Engineering (an engineering staffing firm) over the last three years and approximately 15,000 job placement requests only .6% required an MBA. Comparatively, 1.7% required an engineering Masters degree and 97.7% a BS in engineering.
An MBA Won’t Necessarily Increase Your Pay
According to the same dataset supplied by Randstad above, the average posted salary for the positions requiring an MBA was about $131,000 USD. The average salary posted for an Engineer with a Masters in an Engineering discipline, however, was $137,000 USD. Per Rogers, “an MBA can open some doors, but there may be fewer doors in engineering… it is more of a ‘plus.’”
It is important that you pursue the degree with some foreknowledge of what it is you want the degree to do for your career. Pursuing an MBA because you are bored or hate your current job is a risky proposition, especially since you may not recoup the cost of the education in your future salary.
Employers Occasionally Biased Against MBAs
As Dennis Chandler, an MBA and MS degree holder, pointed out, “A lot of companies also believe you are going to be an expensive hire. One area that I have seen a lot of bias against MBAs is in software/ computer engineering. Those fields are dominated by the startup culture right now, and the belief is that traditional MBAs hinder rather than help small businesses because they try to run them like a large corporation.”
It is worth noting, however, that our other interviewees said they have never run across a circumstance where having an MBA would prevent someone from being considered for a position.
Not All MBAs are Equal
If you are pursuing an MBA with the goal of remaining with your current or similar employer (albeit in a more managerial capacity) where you obtain your degree does not necessarily matter… so long as it is an accredited institution.
If, on the other hand, you aspire to work for certain Fortune 500 companies after graduation or plan to transition to finance, be very selective about where you choose to obtain your education.
Per Matt DiGeronimo, “Investment banking, most management firms, and even some Fortune 50 programs don’t want anyone who isn’t a top 10 MBA guy. They’re not even quiet about it. I had a former commanding officer tell me ‘I would recommend you go spend 2 years at Harvard and then give us a call.’ These are image conscious organizations… its just not worth it to them to bring in someone else (that didn’t choose a Top 10 MBA program school) when there are plenty of top 10 MBAs available.
It’s a reasonable subprocess to let that school do the screening for them. The institutions are essentially a prescreening process for employment.”
Material Not Particularly Challenging for Engineers
“There’s nothing presented in a traditional MBA program that you can’t learn by studying a few good books on the subject.” – Manifesto from PersonalMBA.com
Most undergraduate engineering curricula will involve more technical study and advanced mathematics than any MBA program. “There is nothing challenging in the MBA program if you are an engineer – if you’ve been through differential calculus you’re just going to laugh at the statistics curriculum,” per DiGeronimo (who holds an undergraduate degree in nuclear engineering).
When Does an MBA Make a Difference?
Intrinsic Value of Studying Business
Engineers excel at being able to stay focused and solve problems with a limited set of resources in a logical and practicable manner. When coupled with the ability to “talk the language of business” this combination is invaluable to an employer.
On the value of the MBA education, DiGeronimo explained:
There’s a need for people that speak both C-level language and engineering language.
Engineers are given a problem state, a set of limited resources, and are told to find a way out.
When I was in the MBA program I realized my engineering background gives me a huge advantage in non-technical fields. If you put me in a group of engineers I don’t know how I fall out… but if you put me among people with a non-technical background the combination of engineering and the language of an MBA gives me a massive advantage.
So the biggest benefit of being an engineer with an MBA, serendipitously, is that it allows me to think like an engineer, have the language of an MBA and find somewhere I can be a unicorn of sorts.
Moreover, if you hope to obtain a position that requires working with budgets and financial forecasting, graduate-level business education is advantageous.
Promotion with your Current Employer
In a recent Wall Street Journal article, Harvard strategy professor Julie Wulf says with respect to engineers obtaining MBAs, “there may be implications for midlevel managers looking to advance their careers, as corporate succession plans might favor functional experts with managerial capabilities, or at least general managers who are willing to cooperate more with their highly specialized suite-mates.”
A candidate with both the technical expertise to understand the nuts and bolts of the product development cycle as well as the ability to see the wider marketing or distribution picture is highly desirable. If you are looking to move “out of the lab coat” and into the corner office, obtaining an MBA may be just the ticket.
A Tremendous Catalyst at the Right Time
At the right moment, with the prerequisite amount of experience mentioned above, obtaining an MBA can be a tremendous catapult to your career and earnings.
Take, for example, Dennis Chandler’s experience: “I increased my salary by 61% once I finished my MBA, and made the move from the aerospace industry to the more lucrative medical device industry. I went from the title of Senior Engineer in a large corporation to the Director of Operations.”
Related: Jobs for Engineers with an MBA
When we asked DiGeronimo when the most appropriate time to obtain an MBA in your career was, he cautioned strongly against completing it immediately following your undergraduate program.
People that do engineering and go right to an MBA program – I just don’t think they have the perspective yet.
What you get out of an MBA as an engineer is really what you put into it. How intensely do you think about things? Without any real work experience I think the benefit is significantly less. It doesn’t significantly benefit you in the job search if you don’t have the experience, because you’ll be competing for the same jobs you would have competed for without the MBA… and in some cases it might be a disadvantage… the employer could question what your future career motives are. Are you going to work here just a couple years? Career hop to another corporation?
Using the MBA to Transition Careers Altogether
As Jay Rogers mentioned previously, “an MBA can open some doors, but there may be fewer doors in engineering.” The corollary to this is that if you are an engineer looking for work outside of engineering, an MBA may be precisely the tool to help get you there.
Depending on what industry specifically you are looking to enter – an MBA may not even be optional. PersonalMBA.com points out, “If you’re looking to go into advanced corporate accounting, finance, quantitative analysis, commercial real estate, Fortune 500 management consulting, venture capital, or investment banking, an MBA or MS in a business-related field may be expected or required.”
“Looking back, I think engineering schools tend to provide very narrow career guidance to engineers that is just not true,” offered DiGeronimo. “When you are good at math and science people push you into engineering… not because I chose it, but because it just sort of happened. But later I learned I’m not a lab coat kind of guy.”
Some employers may even preferentially hire you because you are an engineer with an MBA. This may explain why, according to IEEE and Accepted.com, a full “40 percent of MBA admission seekers are engineers.”
Expanding Your Network
Networking is the one massive advantage obtaining a conventional MBA can provide over simply studying the material on your own and gaining the requisite experience for promotion.
“What has really opened up is my network, in that immediately after gaining the new job and title, I could connect with other Directors and C-suite individuals that I could not have before the MBA,” noted Chandler.
Bottom Line: Is Getting an MBA Worth it as an Engineer?
“Yes” if …
- You want to move into a managerial or C-suite position for a large corporation or a traditional employer.
- Your job (or anticipated job) will require managing a budget or forecasting.
- You would like to change careers, especially if you are looking outside of engineering altogether.
- Want to remain the go-to problem solver or technical wizard.
- Don’t want to fork over two (or more) years of your time and incur expensive student loan debt.
- Want to remain with a traditional engineering firm.
- Need a guaranteed return on investment.
An MBA is a change agent when applied to a conventional engineering career.
Caveat emptor obtaining an MBA does not necessarily mean you will be promoted or see a salary increase – and it will entail your advance on a significant time and monetary investment.
But if you want to be considered for management or C-Suite position within your current firm, make yourself a more valuable candidate to be recruited by another company, or transition out of engineering altogether- an MBA is a considerable asset.Image credit: Eran Kampf