BY Sydney LakeMay 18, 2022, 4:27 PM
Students walk through Yale University, as seen in September 2018 in New Haven, Connecticut. (Photo by Yana Paskova/Getty Images)
MBA graduates on average now make well over six-figure starting salaries—and that doesn’t even include some of the major bonuses and benefits they also get as part of their pay packages. In 2021, MBA grads made $115,000 starting base salaries, according to the Graduate Management Admission Council’s 2021 Corporate Recruiters Survey.
But some Ivy League MBA grads are making nearly double that amount immediately after earning their degree. Case in point: Yale University School of Management (SOM) reports that its 2021 MBA grads were bringing home $140,400 average base salaries with bonuses totaling more than $52,000, according to its most recent employment report.
The most lucrative industries for Yale SOM, which Fortune ranks as having the No. 9 full-time MBA program in the U.S., were consulting and finance. These grads brought home starting pay packages totaling $195,000 and $200,000, respectively, in 2021. Part of that is thanks to the rise in MBA salaries for “most sectors,” Abigail Kies, Yale SOM’s assistant dean for career development, tells Fortune.
“Yale SOM students continue to seek out and find ways to make meaningful impacts through their jobs,” she says. “Those are more possible in the private sector than they used to be, and as a result, more students are choosing consulting, finance, and technology—including e-commerce—each year. The Yale SOM median salaries are in part influenced by these shifting options and choices.”
In 2021, more than one-third of Yale SOM grads were hired by consulting firms, while one-fourth went into financial services, including investment banking, diversified financial services, venture capital, private equity, and investment management.
“The demand for MBA talent in 2022 is high across many industries, making it very competitive for employers to receive high acceptance rates from the candidates they give offers to,” Sarah Rumbaugh, CEO of Relish Careers, a job-search platform for MBA and other master’s students, tells Fortune.
Why consulting, financial services firms hire MBA grads
While consulting and financial services companies have their own specific hiring criteria, they’re ultimately seeking similar attributes in job candidates, Rumbaugh explains.
“They are both seeking highly intelligent, highly motivated, highly credentialed young professionals, and top MBA programs provide a reliable source for exactly those types of candidates,” she says. “The academic and professional accomplishments that are required for admission to a top MBA program ensure that those who are admitted are well rounded: they’ve excelled in their career, academics, and extracurriculars.”
Both of these career paths also require candidates to have strong technical and interpersonal skills, which are pillars of the Yale SOM MBA curriculum. Yale SOM students do well building relationships and answering technical case questions, Kies says. Plus, the school’s alumni network “creates virtuous circles” in both industries as well as specific employers, she adds.
The top three consulting firms—The Boston Consulting Group, McKinsey & Co., and Bain & Co.—all were listed as hiring Yale MBA grads last year. Renowned investment firms Goldman Sachs, JPMorgan Chase & Co., and Morgan Stanley also made the list.
These companies shell out for MBA grads
“MBA compensation packages at prestigious consulting firms have reached an all time high,” Rumbaugh says. It’s common for MBA grads from top 20 schools to receive starting pay packages of $200,000, she adds.
While candidates with just a bachelor’s degree are being hired at the top three firms with $100,000 starting base salaries, MBA starting base salaries in 2022 are $175,000, according to data from Management Consulted, a company that offers prep and training for professionals entering the industry. With bonuses, pay packages jump to nearly $240,000.
Yale SOM hasn’t released its 2022 salary data yet, but its 2021 data on consulting matched that of industry standards for MBA grads.
Consulting firms will pay up for MBA grads because they “expect a lot from their employees, and providing bonuses is one way to motivate them to perform at the highest levels,” Don Lowman, a senior client partner and global leader of Korn Ferry’s Global Total Rewards business, previously told Fortune.
Investment banks are also dishing out salaries well over the median MBA base partly due to sheer competition among the top firms.
“Historically, banking has been all about the money,” Tom Ragland, CEO of investment banking recruitment company The Harrison-Rush Group, previously told Fortune. “For the past few years, banks have had to compete with large tech companies and startups for talent. Before the internet, banking was the thing to do with an MBA, but now banks are competing against Facebook, Apple, [and] Google for top talent.”
Yale SOM didn’t provide bonus data for all financial services sectors, but MBA grads who went into investment banking made on average a $150,000 base salary with $50,000 in bonuses, while those who went into diversified financial services made $124,250 as a base salary with $30,000 in bonuses, according to the school’s salary report.
Other top business schools have reported that some MBA grads who go into private equity or venture capital can make more than $200,000 to start—with some earning nearly $400,000.
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