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MBA: Who Pays?

The personal and corporate ROI

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It’s unanimous! In Calgary business, for career-driven up-and-comers, executives and high-energy entrepreneurs, a Master of Business Administration (MBA) degree is valuable.

While business is business, the practical reality is that an MBA is also a significant commitment of time and money. Relevant and key practical MBA realities include how much does an MBA cost? Is it worth it? And who pays?

“With such a wide range of options available, the time and costs involved in getting an MBA also span a wide range,” explains Dr. Gina Grandy, dean of Calgary’s Haskayne School of Business “In general, students can typically expect to take about two years to complete an MBA, and at an average cost of $52k, depending on the program they choose. But that’s really just a ballpark.

“With so much flexibility, students can complete their MBA in as few as 12 months, or as many as 32. The costs also vary by program, and all MBA applicants are automatically considered for entrance scholarships.,” she adds. “Last year, Haskayne MBA students were awarded more than $350k in scholarships.”

An Accelerated MBA tuition is $28,267.14 for domestic students and $48,348.96 for international students.

A Master of Management tuition is $25,883.88 for Canadian and permanent residents and $55,679.22 for international students.

An Executive MBA tuition is $75,000 plus general fees.

Most MBA graduates say the degree is worth it, leading to better, higher-paying jobs. And most advisors and HR professionals suggest that when deciding on an MBA program, the person should look at the return on investment (ROI), such as the salary (or other benefit) from a new job or promotion after graduation, versus the cost in time and money for the degree.

Some key variables are individual and personal. The commitment of time impacts different people, differently but it invariably makes a dent on individual and lifestyle factors and routines. Recent MBA grads acknowledge considerable cutbacks on social life and activities. There are usually no alternatives.

When it comes to the costs of getting an MBA, there are often options.

Beyond possible scholarships which the Haskayne dean mentions, companies vary about their approach and policies. Partial or full sponsorships of an employee’s MBA, and sometimes sponsorships ‘with strings attached.’

It is common for benefits packages and HR policies to embrace sponsoring an employee’s MBA, as a valuable investment in developing talent, boosting employee loyalty and providing the company with a more skilled workforce capable of taking on higher-level roles. Sometimes a company paying for an employee’s MBA is based on the employee’s specific role and responsibilities, as well as the company’s needs, with the company offering partial tuition assistance rather than fully funding an MBA.

Many companies offering partial tuition assistance rather than fully funding an MBA. Some employers do offer full tuition reimbursement, while others may only cover a portion of the costs.

There are also some requirements or conditions that must be met in order for an employee to be eligible for tuition reimbursement. A couple of examples are maintaining a certain grade point average, or committing to work for the company for a set period after completing the degree.

Companies which offer tuition sponsorship sometimes often have policies about repayment agreements, and require the MBA grad employees to stay with the company for a certain period of time, mostly to recoup the company’s investment.

“There are many approaches,” Haskayne’s Grandy points out. “Some companies choose to invest in their employees by paying full or partial tuition costs. Some provide time off or flexible schedules for their employee to complete the MBA course work. And, of course, some students do not have tuition benefits and choose to fund their own education, often with the support of scholarships.”

In the Calgary workplace, there really is not a standard when it comes to employee benefits like tuition reimbursement. It varies and it depends.

Consultants and HR professionals agree. Companies should consider paying for an employee’s MBA, because, in many cases, it is a win-win investment for the company in developing talent, boosting employee loyalty, and providing the company with a more skilled workforce capable of taking on higher-level roles.

A corporate tuition sponsorship is an investment in the employee from two perspectives. It involves providing the skills and the network to make the employee better and more productive in their job.

From the company’s perspective, funding an employees MBA is valuable employee development. The company benefits from the employee gaining advanced business skills and knowledge, which can lead to improved performance and career advancement within the organization.

It’s also a positive for retention and loyalty. Offering tuition assistance can incentivize employees to stay with the company, since they feel invested in by the employer. Another ROI for the company is competitive advantage. A workforce with higher-level business acumen can give a company a competitive edge in the market. Although it is impossible to quantify, a subtle but potent ROI for the company is retention, to make the employee satisfied and happy, which is a perk that attracts hardworking and ambitious people.

Occasionally, a tricky dilemma may arise with a company being selective about which programs qualify for reimbursement, and which do not. Reimbursement may not be available to all employees, and limited to certain job titles or departments within the organization.

While some companies have an institutional culture of company sponsorships, others offer a kind of ad hoc policy. The company may pay the school directly, with a channel between the school and the employer.

An MBA student group that is unique in many business ways is entrepreneurs. More and more top MBA programs have strong entrepreneurship focuses to attract driven entrepreneurs, because getting an MBA is a popular rung on the ladder of entrepreneurial success. It provides a solid foundation of knowledge and a suite of skills that can make running a business easier.

Instead of learning everything on the fly, with an MBA, entrepreneurs will understand the basics and can progress more quickly than their self-taught peers. Another major benefit of pursuing a master’s degree in business before becoming an entrepreneur is the invaluable networking opportunities.

There’s a lot of potential value for entrepreneurs in earning an MBA. The reality check is that the costs and logistics involved can be a major roadblock that may diminish the overall value of getting a degree. Most significantly for entrepreneurs? ‘The company’ or a comprehensive benefits package is not available to cover the costs of getting an MBA. It’s self-pay. Because for the entrepreneur MBA student, tuition, fees and other expenses are usually upfront investments that may or may not pay off.

When an entrepreneur gets an MBA, goes on to start a business and ultimately decides that entrepreneurship isn’t for them, they may never recoup their investment and have lots of debt to pay off.

It is a practical reality that, for up-and-coming company employees or entrepreneurial go-getters, “who pays” is a relevant and important factor in the decision to get an MBA. But there is business consensus that an MBA is valuable.

“Either way, the skills, connections and transformative experiences students develop during their MBA program can lead to so many amazing career opportunities,” Dr. Gina Grandy adds. “It makes a Haskayne MBA a worthwhile investment. The stats show that, within three months after graduating, our MBA grads report a 91 per cent employment rate and a nearly 26 per cent increase in their salaries.”

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