Dilution Diminishing the Value of MBAsRoy Cohen | Executive Career Coach, Roy Cohen Career Management
1. Could you shed some light on what the biggest problem with MBAs are for individuals looking to either start a career in finance or those looking to advance in their careers?
There are a number of problems for MBAs; first and foremost, the return on investment is unclear, particularly in this market. An MBA requires an enormous upfront investment in terms of the cost of the program and then there’s also the income that’s lost for two years of being in school. It’s tough these days to get a summer internship, especially one that will pay substantially, so we’re really talking about an enormous investment that has dubious returns and, for some people who approach a program like an MBA program, there’s some question about whether or not it’s worth the investment.
Secondly, not all MBA programs are created equal. For some companies, they will limit the schools where they recruit — if they are recruiting — and other programs need to really be a lot scrappier and aggressive in terms of helping to promote their graduates.
We’re talking about issues of perception and impression and that is also a challenge for some folks considering MBA programs: what’s the marginal value of going to [a] third-tier school versus a top-tier school in terms of getting a job or advancing in your career?
Another issue with MBAs in today’s labor market [is that] there are far too many of them. When you have a lot of people with MBAs, there is brand and degree dilution. Companies begin to discount the value of the MBA so we then have to question, “What else do I need that will further enhance my skill set and experience?” Sometimes, in addition to an MBA, it’s a graduate certification.
2. Are graduate-level degrees valuable at the entry level or are they more useful for individuals looking for promotion and advancement?
Graduate-level degrees are immensely valuable for folks who want to make a career change. If you are working as a musician and you decide you want to become a banker, well, what better path to pursue than an MBA or a master’s in finance to pursue a career in financial services? Having a graduate degree is also valuable for individuals who may have very limited experience. Those folks can enhance their experience with skills and an internship, which allows them to further develop their professional brand. For folks who are working, executive MBAs and part-time programs support promotion and it also builds in an expectation on the firm’s part that the individual who is enrolled is very committed to professional development. That perception may become self-fulfilling [and lead to a promotion down the line].
3. How do you think graduate degrees stack up against graduate certificates and certifications?
Graduate degrees take a lot more time and we need to understand whether or not that graduate degree is necessary for success as you advance. The only way you can determine that is by talking to folks who are in positions you’re striving to achieve yourself. You don’t know whether or not the degree is going to be valuable until you talk to people who actually have the kinds of jobs you’re looking to have yourself.
It’s really important to do a reality check. Whatever it is you envision for yourself in three or five or 10 years, spend some time talking to folks about what they see as being essential in terms of qualifications and skills, and then build in those sorts of skills to your profile.
4. Is there anything you’d like to add about the real value of graduate-level degrees for career climbers and if there are alternate options they can pursue in order to gain the skills and competencies necessary to move up in their career?
Graduate degrees help you to get a foot in the door. Once you’re there, it’s the certificates, it’s the networking, it’s learning how to manage politics, that provides the ongoing training and the skill set to differentiate yourself and to outperform your colleagues. There needs to be some clarity in terms of a graduate degree versus a certificate program versus even reading a book that can help you gain some insight on how best to navigate your career.
This interview has been edited for length.
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- Graduate-level degrees are valuable for career changers and starters, but for those looking to advance in existing careers, certificates may be a better option.
- As more individuals begin earning master’s degrees, the marketplace becomes diluted and they no longer serve as a differentiator.
- As important as having a graduate-level credential is the reputation of the school from which you earned it.
Author Perspective: Business