If you’re thinking about getting an MBA to advance your career, you’ll first want to conduct due diligence to ensure the return on investment is what you need it to be. After all, the average cost for top MBA programs in 2013 was $111,418, according to U.S. News & World Report.
Cost isn’t necessarily a deal-breaker when the right program could mean a big boost in your salary after graduation. In the first installment of our Return on Education (ROEd) analysis of over 200,000 SoFi applicants earlier this year, we found that an MBA led to an increase in earnings between 34% and 89%, depending on undergraduate degree type. Unfortunately, not all MBA programs offer the same payoff, and it can be tough to tell up front which one is going to be worth your investment.
So how do you choose the right MBA program for you? Many people look to the various MBA rankings published by magazines and other publications each year in order to make their choice. However, the criteria these outlets use to develop their rankings might not be exactly what you need in order to make a decision.
Looking at MBA rankings is a good first step, but it’s also key to look beneath the rankings to understand how they decide the top business schools. In addition, you should be looking beyond the rankings for a few telling pieces of information.
Here are four ways to do just that:
1. Start with the Return on Education (ROEd)
Cost isn’t everything, but it certainly should be a key factor – particularly when it means taking on a significant amount of student loan debt. In our latest ROEd installment, we analyzed the average income and debt load of SoFi applicants with MBA degrees and about three years of work experience - and the findings were quite surprising.
For example, when we ranked business schools by average salary, we found that our top 20 included most of the top 20 found on the US News and World Report MBA ranking. However, when we re-ordered by salary-to-debt ratio, only one US News program – Stanford Graduate School of Business – remained in the top ten. In fact, topping the list for highest salary-to-debt ratio are three schools that you wouldn’t see in many top MBA program rankings.
The big takeaway here? It can pay to have an open mind about your choice of MBA program.
2. Dig deeper into career placement rates
Business schools tend to report placement rates showing how many students have jobs as of graduation. But a better rate to look at is how many students had jobs lined up as of the end of January of their second year — meaning before they have their diploma.
Why? Because this helps demonstrate how successful the school is in bringing recruiters to campus and how successful they are in placing students in jobs where an MBA is considered a requirement. Schools may boast a 98% placement rate at graduation, but they might only post a 30% placement rate as of January if their on-campus recruiting is lacking.
You should also ask the career center what types of recruiters come to campus. If you are pursuing an MBA in the hopes of getting a job in brand management, ask the career center how many students landed such roles and how they found them. Was it due to on-campus recruiting? A strong alumni network? Or legwork by the student? If the school you are looking at doesn’t have strong ties to your preferred industry then it will be harder to land your coveted job — even with an MBA.
3. Consider the school’s teaching method
Business schools use different teaching methods. Harvard Business School has become synonymous with the “case” method of teaching, where it focuses on using stories — or cases — to show how a theory or a concept applies to a real-world situation. Other schools, like the University of Chicago, are known as “quant” schools that focus on quantitative skills, like finance, statistics and accounting.
When deciding where to pursue your MBA it’s important to consider the classroom environment and the types of skills you’ll be developing. Are you extroverted and want to engage in debates with classmates? Then the case method might appeal to you. The HBS website states that class participation is so important that 50% of a student’s grade in many courses is based on the quality of class participation.
Or are your quantitative skills lacking but you really want to go into investment banking where those skills are valued? Then you might consider a school known for its quantitative approach so you can develop the hard skills you’ll need to find the job you want.
4. Go big or go small
There are constant debates among those of us who have worked in higher education as to whether small schools or large schools produce the best results. Some argue that smaller schools do a better job of teaching because students receive more individualized attention, leading to a better education. But smaller schools lack the large alumni networks that exist at bigger schools and can play a crucial role in finding jobs as you build your career.
At the end of the day, you should pick a school that has the highest probability of helping you get the job you need to develop the career you want. If you were investing six figures in a house or the stock market you’d do you fair share of homework. Apply the same kind of rigor before deciding whether and where to pursue your MBA and your hard work pay off in the long run.