How Much Does an MBA Increase Your Salary?

One of the most effective steps an early- or mid-career professional can take to increase their earning potential is to pursue an MBA, such as the one offered by the School of Management at Cal Lutheran. When talking about MBA earning potential, a lot of the conversation can feel abstract or confusing. You might be asking if the degree really does correlate with pay increases, and if so, how much can an MBA credential really increase your salary?

There are multiple ways to answer these questions. There is a longer, nuanced answer because the answer is complicated: there are a lot of different factors that play into one’s potential income (some of which we discuss in this article). But, the core answer is that the knowledge and experience you’ll gain during an MBA program, as well as the credential itself, can make a significant impact on your income.

What Factors Impact My Salary?

There are many factors that will have an impact on your salary after earning an MBA. Some of these include the industry you work in, where you live, how much experience you have, degree specialization and your individual skill set.

Industry

Employers in almost every industry need — and are willing to pay for — MBA graduates, from retail and healthcare to consulting and financial services and even the governmental and nonprofit sectors.

Industry (Manager Job Title)	Average Median Salary Without an MBA	Average Median Salary With an MBA
Information Technology	$110,000	$131,800
Finance	$115,100	$130,400
Hospitals and Ambulatory Health Care Services	$76,200	$107,400
Marketing	$89,500	$125,200
Human Resources	$87,400	$100,100
Retail	$51,100	$139,100

Source: Lightcast, a leading labor market analytics company

Experience

Experience is a big factor in salary negotiations. For example, a self-reported salary survey of 1,000 health care workers found that those working for two to four years made an average salary of $76,709, while workers in the same field for five to seven years made $94,066. Those with more than a decade of experience made $137,185 on average.

Specialization

Many MBA programs, including the on-campus option at Cal Lutheran, allow you to select an emphasis for your degree, and that specialization helps you prepare for high-priority roles.

• An MBA with an emphasis in finance might allow a financial analyst to expect a starting salary of $92,400, more than 30% more than without an MBA.
• An MBA emphasis in information technology may help you land a product manager role with a median salary of $148,000, nearly 10% more than that same role without an MBA.
• Marketing MBAs are in high demand — brand managers with an MBA earn median salaries of $119,000, more than 18% higher than managers with a bachelor’s alone.

Location

Just as cost of living can vary widely from city to city, salaries are very dependent on location. Economic activity, housing density and even weather can play a part in how much it costs to live in a given place, which competitive employers account for when hiring.

A study published in the National Bureau of Economic Research analyzed nearly 700 community zones across the United States and found a large difference in average wages. For example, wages in San Francisco, San Jose and Washington D.C. are about 30% higher than the national average, while other smaller U.S. metros report ranges about 30% lower.

Skill & Negotiation

A study by Transparent Career showed that those who earned an MBA reported an average increase of $41,000 in their salary after their degree.

MBA graduates often leverage their new degree to find new jobs with new companies or in new industries, some moved into new positions with their current companies that paid more, and some negotiated pay raises based on new responsibilities they agreed to take on.

How Does an MBA Help You Succeed?

There are several reasons MBA degrees are so highly respected and compensated. First, the curricula covers crucial business knowledge, including technical skills in finance, management, organizational behavior, economics and business analytics, as well as interpersonal skills such as leadership, ethics, negotiation and decision making

Gaining expertise in a wide range of topics helps students develop a well-rounded business management tool belt. Rob Bueschen, an MBA student at Cal Lutheran noted, “Cal Lutheran has really increased my confidence as a business person, and I’ve developed and enhanced my entrepreneurial thinking so that I can make optimal decisions within the company.”

Finally, an MBA program can be an excellent networking opportunity. Students will develop strong working relationships by working with classmates, tackling real-world projects and internships and connecting with professors, program alumni and community leaders.

Choosing an MBA Program

Ultimately, the best MBA program for you is the one that fits your goals and your life. If you’re interested in specialization, pick a program that offers the appropriate curricular emphasis. If you’re currently working or have a busy lifestyle, you should also choose a school that offers the flexibility you need to complete your degree.

Cal Lutheran’s MBA program can be completed either full or part time, with on-campus, online and hybrid class options. Most classes are scheduled in the evening, and students can start the program at the beginning of any term. Cal Lutheran also prioritizes small class sizes, allowing for meaningful engagement and connection. With the Cal Lutheran MBA, you’ll have opportunities to gain real-world experience and build your network.

Earn Your MBA from the Cal Lutheran School of Management

Develop skills to stay competitive and showcase your value to organizations with Cal Lutheran’s MBA program.

The School of Management at Cal Lutheran is dedicated to producing graduates who are well prepared to succeed in their personal and professional lives — who lead, think, communicate and follow through with sustained excellence. As a Cal Lutheran School of Management student, you’ll learn from experienced faculty and benefit from personalized attention in small class sizes.

Download a program brochure or start your application for the Master of Business Administration.