This story appears in the May 4, 2014 issue of Forbes. Subscribe
The job market for M.B.A.s has slowed since the Great Recession, but a diploma at an elite business school still pays off. Graduates of the top 25 programs make almost $160,000 a year after five years, two and a half times what they earned pre-M.B.A., according to our 2013 Best Business Schools ranking. But does money buy happiness? Applying the age old question to business school grads shows the two do not necessarily go hand in hand. Dartmouth, Chicago and Penn operate three of the most prestigious M.B.A. programs in the world, but their grads gave middling marks on job satisfaction five years out of school, despite average paychecks in the $200,000 range.
We surveyed 17,000 grads from the Class of 2008 last year for our biennial b-school ranking and heard back from 4,600. In addition to salary data for the ROI ranking in October, we also quizzed alums on their level of satisfaction with their education, with the preparation it gave them and with their current job. Stanford Graduate School of Business leads the way, ranking in the top five among schools across all three levels of satisfaction. Stanford grads were the most satisfied in our two previous surveys of alumni as well. The country’s most selective b-school (acceptance rate of 7%) also topped our ROI ranking in 2013.
Stanford grads had the top paychecks in our 2013 survey with median total compensation of $221,000 five years out of school. Stanford grads are highly sought after, and they have the pick of the litter when it comes to employment opportunities. The top five landing spots for the Class of 2012 were consultancies Bain,
Stanford grads are also finding contentment outside of big, traditional companies as nearly half of them go on to start a business, according to a 2011 survey of alumni. “The best preparation for entrepreneurship anyone could hope for is completing an M.B.A. at Stanford,” says Adi Bittan, Stanford GSB Class of 2008. “In addition to the specific skills, no place does a better job of getting you to believe in yourself so much that you take the plunge into entrepreneurship so that you can change the world.” Bittan’s statement evokes Stanford’s not so modest motto: “Change Lives, Change Organizations, Change the World.”
Bittan is like a lot of Stanford grads looking to make their own mark. She says she met “larger than life entrepreneurs” while getting her M.B.A., and she benefited from a startup fellowship at Sand Hill Road VC firm Lightspeed Venture Partners. Today, she mentors students in Stanford’s incubator program, while running a startup she co-founded OwnerListens. The real time customer service platform for brick and mortar brands raised $1 million last year from angel investors and early stage VCs.
Stanford grads overwhelmingly gave their schools the top scores for both their education and how they stack up compared to other M.B.A. alumni. The school ranked fourth for job satisfaction. We averaged the satisfaction scores among the 50 U.S. schools with the highest responses to determine the overall rankings. Some b-school rankings measure satisfaction of students at graduation, but we look at satisfaction five years out of school when students have had time to reflect on their educational experience and how they compare to other M.B.A.s in the workforce.
B-schools have taken their shots in recent years on everything from the relevance of their curriculum to the piles of debt graduates pile up. Graduate Management Admission Test (GMAT) taking hit a five year low last year and was off 19% from the record level the previous year (part of the drop was due to changes in the test which drove higher volume in 2012). The drop was even more severe in the U.S. at 23%. But those taking the plunge to apply and go to a top school are almost uniformly pleased with their experience. The alumni we surveyed, who graduated into the teeth of the recession, overwhelmingly gave their schools high marks for their educations, but much lower scores for their current job satisfaction.
Alumni of the Haas School of Business at the University of California, Berkeley had the highest level of job satisfaction (Haas ranks second overall, including satisfaction with education and preparedness). Like Stanford, Haas’ top employers are heavy on consulting and tech led by Google, eBay, McKinsey, BCG and Deloitte. Bonghun Lee went to Berkeley to strengthen his financial knowledge, as well as his entrepreneurial skills, after working for the Korean government as an investment banker. “Haas provided me with opportunities to interact with diverse professionals with various insights and also helped me to form global networks, which function as a strong leverage for my career,” says Lee.
Dartmouth’s Tuck School of Business (No. 6) and Chicago’s Booth School of Business (No. 10) cracked the top 10 overall despite ranking in the bottom quartile for job satisfaction. Alumni gave both schools high marks for satisfaction with their educations and preparation relative to other M.BA.s. Tuck alumni are among the most loyal in the b-school world. The alumni giving rate topped 70% participation for the third straight year in 2013, which is nearly triple the average of its peer schools. Booth is the second oldest business school in the world and has 48,000 alumni. The school sends 80% of grads into finance or consulting jobs, and it finished second in our ROI ranking last year.
Full list: The Most Satisfied MBA Graduates
Special Report: The Best Business Schools
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