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Is Getting an MBA Worth It?
An MBA isn't as popular or necessary as it once was. If you're thinking about going for a master's in business administration, consider these points first.
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Is getting an MBA worth it? Historically, the MBA, also known as a Master of Business Administration, has been the business degree for entrepreneurs and ambitious businesspeople to get. Many top CEOs and high earners in some of the most successful companies have either done some postgraduate work or earned their MBA, which has made it a popular degree to pursue for decades.
But today, telling a potential employer that you earned an MBA doesn’t have the same cache it used to, mostly because everyone has or wants one now. What once set the most skilled businesspeople apart is no longer unique. Let’s look at some of the reasons an MBA isn’t as prestigious as it once was and when it still makes sense to pursue one.
What is an MBA?
Harvard introduced the Master of Business Administration degree in 1908. Today, an MBA is a graduate degree offered by business schools across the country. Many colleges now have online MBA programs, too, so location is no longer a barrier to obtaining such a degree.
Regardless of whether you study in person or virtually, you can pursue your MBA part time or full time, and you have the option to specialize in specific areas of interest. For instance, you could focus on healthcare management, finance or business analytics. Some opt to pursue an MBA immediately after undergraduate coursework, while others return to school after time in the workforce.
Traditionally, earning an MBA has been an excellent way to stand out to potential employers. Many people still see it as a requirement to reach a C-suite title at a large company. But does it make sense for most people in business today? Not necessarily.
Why an MBA isn’t as prestigious anymore
Obtaining an MBA may seem appealing, but this advanced degree isn’t held in the same regard it once was. Below are the reasons obtaining an MBA isn’t as prestigious anymore.
Market oversaturation
Meeting someone with an MBA used to be a novelty, and MBA graduates commanded a lot of respect with their detailed knowledge of business. But now, there are all kinds of programs for earning your MBA, including part-time digital courses. With the easy accessibility and the large number of people entering and finishing these programs, the market for employees with an MBA is oversaturated.
Recent data confirms this oversaturation trend. According to the Graduate Management Admission Council’s 2024 Application Trends Survey, MBA applications surged by 12 percent in 2024, with the largest share of full-time two-year and one-year MBA programs reporting application growth in the past decade.
If you’re depending on an MBA to separate you from the pack of quality job seekers, you’re taking a risk. You need something other than the degree to differentiate you from your peers. Further, many educators feel that because of the wide variety of MBA programs that exist today, the quality of the coursework has declined. Some also believe students are not receiving the education and business skills necessary to get a high-caliber job after graduation. To some, today’s students are not as well educated as MBA graduates in years past and aren’t as distinguished.
“There is a huge gap between what they learn in business schools and what the industry needs,” said Suresh Chitturi, vice chairman and managing director of Srinivasa Farms, who earned an MBA from Emory University in 1998. “Quite a few of them are out of sync with reality, get fascinated by an MBA degree and think that they’re something special, which they’re not.”
Competition from specialized M.S. programs
Beyond competition among students, the MBA has its own academic competitor: the Master of Science. Many schools offer specialized M.S. programs in areas like finance, accounting and medical management. Earning an M.S. usually costs less than an MBA and takes only one year.
Younger students who have little to no work experience and want to specialize in accounting or finance are often drawn to an M.S. instead of a pricey, time-consuming MBA. That said, M.S. programs don’t cover general management practices, so earning an MBA makes more sense for those who want to focus on business practices at large.
Global competition
Oh, and did we mention there is also global competition to consider? Once upon a time, only American students sought a master’s degree in business administration. But as the economies of places like Japan and China draw increasing attention, would-be businesspeople from Asia and elsewhere are seeking MBAs too. The same goes for people in Europe. As a result, the number of MBA graduates continues to increase, further diluting the value and uniqueness of the degree.
Economic factors
A declining economy often means employers simply can’t afford to hire the best and brightest minds, especially those who request a higher salary to pay for their expensive business degrees. Also, companies that may have previously subsidized schooling for employees are less likely to have the funds to continue to do so.
It’s a Catch-22 because a highly qualified employee can pay for themselves in the long run. However, it’s easier to hire someone less qualified and train them as they go, which is why many businesses use internal programs to give staffers more education over time. Why pay top dollar for a candidate with a generic MBA when it could be more efficient and cost-effective to teach another candidate your company’s specific operations?
“Even when hiring the best candidates, we recognize that many new starters have skill gaps,” said Gavin Cooper, vice president of global marketing at Champions Oncology and former executive director of global marketing for Crown Bioscience. “An individual development plan forms part of our new-employee induction program. We recognize the importance of developing our employees right from when they walk in the door.”
Changing business environment
The U.S. used to have a very stable and hierarchical business system. You started in an entry-level position, gained experience, moved to better management positions and eventually had an executive-level role by the time you retired. Today, companies and jobs are often temporary, making career trajectories more flexible but less predictable. Even if you spend years of your life studying and spending money on MBA courses, there’s no guarantee you’ll get your money back with a high-paying job.
Plus, employers are starting to recognize that other qualifications are equally as important as having an MBA. It’s still more than that, though; employers are acknowledging that formal education isn’t the only way to be good at something valuable to a business. Alternative experiences are increasingly accepted in lieu of degrees, which means there could be better ways to get to the places you want to go than spending time and money on an MBA.
This shift is reflected in the rapid growth of the alternative credentials market, which was valued at $16.33 billion in 2023 and is projected to reach $69.87 billion by 2032. Major employers like Google, Amazon and IBM now offer their own certificate programs and actively recruit from coding bootcamps and other nontraditional training paths. Some bootcamps report that 90 percent of graduates are hired within 180 days, highlighting growing employer trust in these alternative learning models.
Popular alternatives to an MBA include:
- Internships
- Professional certificates and micro-credentials
- Digital badges and nanodegrees
- Coding bootcamps and specialized training programs
- Industry-specific certifications
In addition to alternative learning methods, many companies are placing greater emphasis on cultural fit and real-world problem-solving skills over traditional education or years of experience. [Read related article: Hiring for Attitude Over Experience — What the Numbers Show]
Industries and roles where MBAs still matter
Although MBAs are losing popularity with some industries and roles, there are many cases where an MBA is still of high value, such as investment banking and private equity, healthcare and pharmaceutical management, and corporate leadership tracks.
- Investment banking and private equity: Investment banking remains one of the most MBA-dependent industries. According to Harvard Business School’s 2024 employment report, 39 percent of HBS graduates seeking employment entered financial services, with 19 percent specifically choosing private equity and 5 percent entering venture capital. These roles typically require the analytical rigor, financial modeling expertise and networking opportunities that top MBA programs provide.
- Healthcare and pharmaceutical management: The healthcare sector presents significant opportunities for MBA graduates, with salaries ranging from $118,000 to $185,000. Healthcare organizations increasingly need leaders who understand both clinical operations and business strategy, making MBA graduates valuable for hospital administration, pharmaceutical management and health technology roles.
- Corporate leadership tracks: Many Fortune 500 companies maintain formal leadership development programs that specifically target MBA graduates. A Graduate Management Admission Council (GMAC) survey of 1,108 corporate recruiters and hiring managers revealed that 76 percent plan to hire as many or more recent MBA graduates in 2025 as they did in 2024, demonstrating continued demand for MBA talent in corporate environments.
In these fields, an MBA remains a strong differentiator for professionals aiming to advance into high-impact, high-paying leadership positions.
Is an MBA still worth it? A nuanced analysis
If you’re still debating whether earning an MBA is the right track for you, consider this analysis.
When an MBA makes financial sense
An MBA may not be as prestigious as it once was, but that doesn’t mean no one should pursue one. Studies still show that those with an MBA earn more than those with a bachelor’s degree alone. At roughly $120,000, MBA holders earn a median starting salary that’s 1.75 times higher than bachelor’s graduates.
When networking and brand value matter
Besides a higher salary, an MBA can provide valuable networking opportunities you might not be exposed to otherwise. The connections you make while earning your MBA could lead to more career opportunities down the road. Additionally, if you’re exclusively focused on climbing the corporate ladder, an MBA provides a solid educational background and a great line on your resume. Some traditional firms may even require it.
When alternative paths are more suitable
For many career goals, alternative credentials may offer better return on investment. The alternative credentials market’s 17.8 percent annual growth rate reflects increasing employer acceptance of non-traditional qualifications.
Consider alternatives when:
- Seeking rapid career transition into technology roles
- Looking for specific technical skills rather than general management knowledge
- Working in industries that value demonstrated competency over formal credentials
- Unable to commit to two years of full-time study
- Seeking more affordable educational options
Industries where MBAs aren’t essential
In many modern industries, alternative credentials and experience often outweigh MBA requirements:
- Technology sector: Many successful tech leaders lack MBAs, with companies often prioritizing technical skills, product experience and demonstrated results over formal business education.
- Creative industries: Media, entertainment, and digital marketing often value portfolio work, creative output, and industry experience over traditional business credentials.
- Entrepreneurship: While an MBA can provide valuable business knowledge, many successful entrepreneurs have built companies without formal business education, relying instead on market knowledge and execution skills.
- Digital marketing and e-commerce: These rapidly evolving fields often favor practitioners with current, hands-on experience over those with traditional business education that may not cover the latest digital strategies.
Geographic and economic considerations
MBA value varies significantly by geography and economic conditions. International data shows mixed demand, with growth in some regions like Central and South Asia while decreasing in others.
In emerging markets, MBAs often carry more prestige and practical value, while in saturated markets like the United States, the degree’s premium has diminished relative to alternative credentials and experience.
Making the decision: MBA vs. alternatives
Take the time to research your desired field and ultimate goals, considering job title, responsibilities and pay. Then weigh whether an MBA is truly necessary to get you there, even with the above considerations in mind.
Key questions to consider:
- Does your target industry require an MBA? Research specific companies and roles to understand their actual requirements versus preferences.
- What’s the opportunity cost? Compare two years of full-time study and associated costs against immediate work experience and alternative learning options.
- How important is the brand and network? If you’re targeting roles at prestigious companies that heavily recruit from top MBA programs, the degree may still provide unique access.
- What are your learning preferences? Some people thrive in comprehensive, theoretical academic environments, while others prefer focused, practical training.
- What’s your risk tolerance? Traditional MBA programs offer more predictable outcomes, while alternative paths may offer higher reward but with greater uncertainty.
As the business education landscape continues to evolve, success increasingly depends not just on the credential you choose, but how effectively you can demonstrate value to employers, whether that comes from an MBA program or alternative pathways.
Skye Schooley and John Moyer contributed to this article. Source interviews were conducted for a previous version of this article.
