The other day, one TCS employee asked me a puzzling query. She asked me if she should join the second-gen IIMs given that she is working as a Business Analyst with a package of 6 LPA. It made me think about the financial viability of the MBA program. So, I talked to a few of my friends on this topic and tried to understand their point of view.
Often, the question of the financial viability of an MBA program perplexes working professionals. It is quite natural considering the uncertainty and opportunity cost of this pursuit. So, based on my and my friends’ experience, I have tried to answer this question in the following way.
For a working professional, the viability of pursuing an MBA depends on his current salary and the b-school he would be taking admission in.
Besides, one should also factor in the following factors while taking this decision.
- Growth Rate
- Opportunity cost
Keeping these points in mind, I have tried to answer the financial viability of an MBA program for working professionals using four cases.
CASE 1: Current salary is less than 7 LPA and admission in tier-1 b-school
It is very much financially viable because you may get an average package of around 20 LPA, besides a coveted brand name. It will not only boost your profile but also make you financially sound.
CASE 2: Current salary is 7-12 LPA, but admission in a tier-1 college
Such an MBA is financially viable. It is because of the brand name that will get you an unprecedented growth rate post MBA. If you get admission in the top IIMs of the country, it is always financially as well as intellectually viable.
CASE 3: Current salary is less than 7 LPA and admission in tier-2/tier-3 b-school
I think it will be financially viable. It is because the average package is around 12–14 LPA, besides a coveted brand name. Though the package is not very high when you see the course fee and the opportunity cost, the opportunities and the growth prospects will be humongous post MBA (my personal opinion).
CASE 4: Current salary is 7–12 LPA, and admission in a tier-2/tier-3 b-school
I don’t think an MBA, in this case, is financially viable. It is because the opportunity cost is very high and the relative growth rate with respect to your current job might remain lower. If you remain in your current job, you can increase your package to around 15 LPA in 2 years without an MBA as well.
In a nutshell,