Men are over-represented in leadership positions at the C-level, vice-president, and senior director level in spite of the fact that women dominate as degree holders across all levels of higher education with the exception of MBAs. According to the 2019 Women in the Workplace study, women account for 48% of entry-level hires and 38% of first-level managers but only 25% senior executive roles.
An MBA is widely regarded as a stepping stone for women to gain C-suite roles at larger corporations, it’s also a huge asset for budding female entrepreneurs. For those considering an MBA, the burning question is – “Is this the right time to get your MBA?” To answer that question, it’s prudent to look at the return on investment (ROI) for an MBA.
The ROI for an MBA
Studying for an MBA requires a significant investment in money, time and energy therefore its important to assess if the financial benefits of obtaining an MBA outweigh the costs. Most questions about the ROI of an MBA revolve around expected salaries and career opportunities.
To calculate the costs associated with an MBA, compare average starting salaries and the amount of debt you have to take on to earn an MBA. Once you compare tuition, cost of living, lost salary (if attending school full time), and debt, begin by subtracting your pre-MBA salary from your likely post-MBA salary. Then divide the total cost of your degree by the result to give you an idea of how long your MBA will take to pay for itself. The average payback period in the US is 55 months.
Intangible Reasons Why You Should Get An MBA
Most women consider the handsome paycheck at the end of studying for an MBA, but according to Forbes, that’s not what most women look back on for 10-20 years in the future. The major benefits of gaining an MBA are the connections and friendships you make. As you navigate your career post-MBA, most likely these connections and friendships make great sounding boards as they too experience the challenges women face in the corporate world.
Considering that post-graduate studies attract those who wish to advance themselves into leadership positions, MBAs challenge you to assess how to get a bunch of Type-A personalities to work together in a team. Given the statistics of only 25% of females in high-level leadership positions, you will most likely face A-Type personalities in male-dominated leadership positions. The skills you learn in business school to overcome A-Type personalities are invaluable as you move through the ranks of leadership post MBA.
The kind of skills an MBA provides such as business strategy, executive leadership, financial and management accounting, marketing operations, and human capital management are highly regarded in corporations. MBAs also advance your presentation skills, expressing yourself clearly and succinctly is a big part of success in the business world.
Although the financial benefit of gaining an MBA is a key consideration, the other factor you should consider is, will an MBA facilitate a career change or career advancement? Depending on the industry, it is important to assess whether an MBA will help give you the technical skills and connections that will make you more marketable in the future.
Women and The C-Suite
It’s widely known that having an MBA is a popular stepping stone to landing a C-suite job in larger corporations. When you look at the resumes of high profile executives in Fortune 500 companies, chances are they have an MBA. However, an MBA doesn’t automatically guarantee success. To excel in C-suite roles also requires initiative, creativity, and effort regardless of your academic qualifications.
Although 45% of employees of the countries largest corporations are women, the further up you go, female representation diminishes significantly. An analysis conducted by Kohn Ferry in 2019 of the top 1,000 U.S. corporations across eight industries and found only 6 percent of women serve as CEOs. Even though their latest survey shows 25 percent of key executives are held by women, the coveted CEO role is still dominated by men.
If women aren’t making it to the C-suite as frequently as men, even with an MBA, there are two popular thoughts as to why this is. On the one hand, some argue women tend to choose human resource roles over finance whereas others point to overt discrimination, implicit bias, along with disadvantaged structures that prevent women from pursuing the top jobs.
According to Kohn Ferry, the CHRO role is the only C-suite role where you find gender parity with 55% of women in these roles. While women may be attracted to HR based roles, it is important to note developing the leadership competencies of an organization are key to success. Women bring a different set of competencies to the table over men where collaboration, agility, empathy, and the ability to coach others is an essential ingredient of organizational success.
Addressing the Gender Pay Gap
Women outnumber men in all levels of education however business school remains one of the few areas where men make up the majority of the cohort. The U.S. Census reports women outnumber men at all levels of education. Business school remains one of the few areas where men are still a majority. You should expect to see a salary bump of 63 percent or more after earning an MBA. However, according to PayScale, women with MBAs take home 74 cents for every dollar earned by men with MBAs. One of the differences in this gender pay gap is how often men and women are promoted after graduating from business school. The gender gap tends to start early in a woman’s career therefore the earlier we prepare women on career readiness, the more likely they are to succeed in their first job out of college. Women need to develop the ability to think strategically about their career goals and envision themselves successfully competing in the world of business.
Even after graduating from business school and earning an MBA, the gender pay gap will still exist. Our business schools are institutions originally built by men for men. Universities can do more to help young women build a diverse set of skills and help them advocate for themselves. By giving them access to a professional network while still in college will help them navigate the interview process, and circumvent biased hiring practices once they graduate.
Corporations can do more to bridge the gender pay gap by looking at what motivates women into their industry. When faced with oppressive cultures, biased promotional practices, and rigid rules around working hours, women are more likely to walk away than stay and be miserable — contributing to the underrepresentation of women at all levels in leadership.
A key to bridging the gender pay gap is to engage more men and bring them into the conversation as allies, not combatants to bring about greater awareness of the challenges women face in the corporate world. Few men see themselves as part of the problem and even less see themselves as part of the solution. Too often men are left out of critical discussions around gender parity not just around the pay gap, also around the lack of opportunities for women to advance into senior leadership positions.
Improving Diversity in a Post-COVID-19 World
It will be interesting to see what effect COVID-19 has on diversity in the workforce with both women and men having to juggle working from home and child care duties along with homeschooling. Perhaps for the first time, those in leadership positions will realize prioritizing family and community commitments is not just a female issue. Working from home more men than ever have experienced the challenges women face on a daily basis juggling a career with family.
Up until now, corporate America hasn’t taken advantage of what diversity and flexibility in the workforce bring to the table. Employers and employees alike have seen the benefits working remotely brings which is a trend likely to continue. They have discovered that flexible working conditions bring with it higher employee satisfaction, higher productivity and lower turnover rates. Women are more poised than ever to fight for gender equality in light of these changes in working conditions. Flexible working conditions have highlighted that women can balance family and career and no longer need to fear that their male counterparts think they are uncommitted to their job. Work-life balance can work for everyone and be enjoyed by all regardless of gender.
With change forced upon us due to the pandemic, Institutions are currently in a position to rewrite the gender diversity playbook and bring more women into the fold, MBA or not. It’s time to bring down a proverbial sledgehammer, rip up the rule book written by men and build a better future for all women that embraces diversity.
MBAs Train Future Leaders
There is no question studying for an MBA develops leadership skills that last a lifetime. They increase your earning potential, increase your marketability and puts you in a position to make an impact in your industry. However, if you are planning to start up a small business like a yoga studio or an online store, then you are unlikely to see a good return on your MBA investment. Therefore when considering an MBA, also consider what your personal goals and career objectives are.
MBA programs propel women into corporate leadership positions and increase the potential for women to break through the glass ceiling. Elissa Sangster – the CEO of the Forté Foundation, says; “MBA programs are designed to train future organizational leaders, so an MBA is only suitable for a person who wants to become a leader. MBA credentials are highly relevant to individuals who want to gain the interdisciplinary strategic thinking and communication skills necessary to lead a complex organization.”
An MBA can certainly open doors for women they didn’t know existed however they still only account for 30% of those enrolled in MBA programs. The biggest obstacle facing women in the workforce is not an MBA, it’s the lack of belief they have in themselves that they are worthy of more than being stuck in an entry-level role or management position in spite of their academic qualifications.
Women don’t need to change, it’s the system and institutions largely run by men that need to change. It’s time for women to reinvent themselves and tackle the gender gap head-on. With COVID-19 affecting enrolments at all universities, business schools are becoming more competitive. Covid-19 won’t last forever, therefore there is no better time than now to pursue an MBA, fight the gender bias and hit the ground running when the country recovers.