The issue of pay is an extremely sensitive one. It's personal, it's private, and it's very important if you want to support yourself. You should periodically evaluate your salary and make sure you're being at least fairly compensated (or you can be like a friend of mine, whose goal is to be overcompensated).
One good tool I've found for current, prospective, and former MBA students to get a feel for what MBA holders (An aside: I don't like calling people "MBAs" because the term suggests a nonexistent homogeneity.) are being paid is a survey put out by the Graduate Management Admissions Council (GMAC).
Before I continue describing the survey and my take on the recent results, let me first issue a disclaimer. The GMAC is a not-for -profit "educational association" that administers the GMAT. Seeing as the GMAT is a computer-administered test that costs $250 a person to take I'm pretty sure that despite the fact that it's not the organization's goal, it manages to turn a profit anyway.
Most surveys are conducted by people with an agenda or some kind or another. In fact, any time I see a number or a presentation put in front of me, my first question is "Who put this together, and what is their agenda?" In this case, I assume the GMAC's agenda is to get people interested in going to business school to get an MBA. This will make the schools who run the GMAC happy, and it will bring the GMAC more of those hefty GMAT test-taking fees. I like to think of GMAC as basically a marketing tool to get people to want to go to business school. In fact, I think all of the MBA surveys you see (US News and World Report etc...) are mostly marketing tools used to get people attracted to MBA programs, and the data therein should be considered, but considered suspiciously.
That said, I still think this survey is useful. In fact, I am one of the survey participants myself, and have been filling out the survey every year since I got my own MBA. The results of the survey make sense to me, and I use this as a general data point when evaluating my own salary.
The entire survey is available here: April 2007 MBA Alumni Perspectives Survey (gmac.org) and I recommend taking a look at it.
The questions on the survey run the gamut from job functions to job satisfaction, to whether or not you are satisfied with your MBA degree, but I immediately zeroed in on two questions: Annual Base Salary and Weekly Work Hours. I find the other questions interesting, but I care the most about this hard data.
Flipping to page 38 of the survey, based on 2,577 respondents who graduated between 2000 and 2006, the mean annual average salary was $94,825, with a median of $90,000 and a 25th percentile of $70,000. This is a good general starting point, but these broad numbers are skewed by greater than average earnings in some industries such as consulting, and below average earnings in things like nonprofits. It's hard to place my salary (which is below the mean) within this group.
On the next page, salaries are broken out according to job function. Here we can see median earnings broken out by industry group. I'll show a few selected groups below:
- Consulting: $100,000
- Finance/Accounting (me): $93,000
- Manufacturing: $90,000
- Nonprofit/Government: $67,800
And broken out by job function:
- Consulting: $100,300
- Finance/Accounting (me): $87,000
- General Management: $100,000
- Human Resources: $84,760
- IT/MIS: $87,000
And finally, by job level:
- Entry Level: $60,000
- Mid-Level (me): $86,000
- Senior Level: $100,500
- Executive Level: $120,000
There is also one other interesting piece of info that breaks out salaries by age. It shakes out this way:
- 27 and younger: $56,950
- 28 to 34 (me, just barely): $88,000
- 35 and older: $100,000
I just barely fall into that second group, so I'm going to unscientifically say that these numbers put people my age (28) somewhere between $70,000-$80,000 a year. My base is above $80,000.
One last piece of salary data I would have liked to have seen in there was a survey of salaries by job location. I know that people in NYC generally make higher salaries than those in Idaho, for example, but this wasn't in the report.
From the above data, this we can gather that senior level consultants make the highest base salary out of all MBA graduates. However, I happen to know a few consultants, and we need one more piece of data before we can be jealous of their cushy jobs and high salaries: hours worked.
Flipping ahead to page 33, we get to the "Weekly Work Hours" table. According to the 2,964 respondents, 4% worked fewer than 40 hours a week, 37% worked 40 to 49 hours a week, and 59% worked 50 hours or more each week. Unfortunately, I fall into that last category.
The first category of less than 40 hours a week is extremely tiny. I don't think people go to business school to work nine to five jobs. As a brief aside here, this category made me think of Timothy Ferriss and a book that I've heard a lot about lately, but have not gotten the chance to read - The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich. I'm not going to recommend it because I haven't read it yet, but I certainly plan to.
Getting to the information I was looking for, the table on the next page shows that the 411 respondents in the consulting industry worked an average of 51.8 hours a week, whereas those who worked for the "Nonprofit/Government" sectors worked an average of 44.6 hours a week. The difference of 7.2 hours doesn't seem like much upon first glance, but think about it for a second... this is an entire day's worth of work for most people. This seven hours represents the difference between coming home in time for dinner and eating cold leftovers or fast food every night. It represents the difference between leaving your office while the sun is still shining and getting home just in time to stumble into bed. It represents the difference between a Saturday morning in the office and a Saturday morning at the beach. It represents the difference between stressful, harried days fueled by caffeine and relaxed days fueled by conversation with your coworkers and a feeling that you're doing something good for the world. I think you get the picture here.
Doing a little math on those results, dividing the median consulting salary of $100,300 by 52 weeks in a year gives you $1,928.84 a week. Further dividing that by 51.8 working hours in a week gives you a consultant's "hourly salary" of $37.24.
The same computation for "Nonprofit/Government" would start with $67,800, divided by 52 weeks, which gives you $1303.84 a week. Further dividing that by 44.6 working hours in a week gives you a "Nonprofit/Government" "hourly salary" of $29.23 an hour.
Of course, one glaring omission from the math above is that it does not factor in bonuses, which can be rather large for private sector consultants and rather small for government and nonprofit entities. In fact, the survey also goes into additional compensation and shows on page 42 that 22% of Nonprofit/Government respondents reported getting no additional salary beyond their base salaries, as compared with only 6% of consultants. So consultants are rewarded even more handsomely than $37.24 an hour.
Even if you don't have an MBA, it's a good idea to periodically review salaries for your job function to be sure you're getting everything you should be. External sources for salary data are a huge negotiating point when you're talking with your boss/hr representative about a raise or starting salary. Salary.com is a great starting point for most areas, and I'm sure there are more specialized surveys out there on the internet if you dig around and look for them.