The True Value Of A Business Degree
by: Alison Damast on July 06, 2014 | 1 Comment 14,959 Views
It’s no secret that an undergraduate degree in business comes with an attractive payoff for students today, namely that of landing a high-paid job with relative ease. Upon graduation, business majors can expect to earn an average salary of $54,000, according to a recent report from the National Association of Colleges and Employers (NACE).
At top-ranked schools, students can easily earn $60,000 or more starting out. For example, at the University of Michigan’s Ross School of Business, the average starting salary is a hefty $63,129 for graduates. “Parents want students to invest in a degree that will have value, and a certain group of parents think that an undergraduate business degree will have a good return on investment,” says Lynn Wooten, associate dean at the University of Michigan s Ross School of Business.
Salaries aside, there are myriad other benefits that come along with getting a Bachelor’s in Business Administration degree (BBA) today that students may not realize when they first enter a business classroom. Students can move up the career ladder faster, develop a broader perspective on how business intersects with other sectors and still get the benefit of a liberal arts education.
Wooten and deans from other top-ranked undergraduate business programs agreed to share their thoughts on what they believe is the value of a business education today, aside from obvious perks like salary and prestige. Here are five reasons they believe students and parents should take a second look at business majors while conducting their college searches or trying to decide upon a major:
It’s a degree with boundless potential:
The mayor of Philadelphia, Michael Nutter, has a business undergraduate degree from The Wharton School, not to mention graduates who go into government or Teach for America, says Lori Rosenkopf, vice dean of The Wharton School. “There are a limitless number of options people can take on,” she adds.
Indeed, students majoring in business today know that no matter what career they end up in, a business degree will give them an edge. Gone are the days when being a business major meant you had to work for a Wall Street bank or become an accountant, says the Ross School’s Wooten. “Students throughout the campus are seeing the value of an undergraduate business education, even if it is not pursued though a traditional business job,“ she said.
Take Brianna Despenza, 18, an art major at the University of Michigan who grew up in New Orleans watching families struggle in the aftermath of Hurricane Katrina. She realized she needed a business degree to start an arts non-profit aimed at helping improve the lives of that underserved population. She recently applied and was accepted to the university’s Ross School, which will allow her to pursue dual art and business degrees. “I decided to do business and arts knowing that business could give me an opportunity to create an organization and really take my art to a global scale,” she says.
More and more students are coming to similar conclusions, especially as they look for ways to make an impact on their communities through business, Wooten said. “Even if you’re an engineer or a musician, students know one way or another that the skills business provides them will help them be successful in their endeavors,” she believes.
A Solid Return on Investment:
The obvious draw of a business degree for many students is an attractive salary right out of school. Just look at the annual salary survey reports done each year by NACE, said Lawrence Murray, director of the undergraduate program at University of North Carolina’s Kenan-Flagler Business School. ”I think you can see the differences in starting salaries from a business major and minor to a non-business student,” he said. “In some cases, those differences are stark.”
But does a business degree pay off several years, or a decade down the line? A report from the Federal Reserve Bank of New York released this June says that it does. Business majors have earned a return of 17 percent on their degree for more than a decade, outperforming their counterparts who majored in degrees such as liberal arts, leisure and hospitality and education, according to the report.
Those that continue their education in an MBA program or the like will continue to have strong salary growth over the course of their careers. About 21 percent of people with business majors obtain a graduate degree, and a result, end up bolstering their earnings by 40 percent, according to a 2011 report from the Georgetown Center on Education and the Workforce that looked at the economic value of college majors.
Getting On The Fast Track:
For a certain group of undergraduate business students, a business undergraduate degree is the first step on a linear path towards getting an MBA degree. Obtaining a BBA means that students will likely get cherry picked for top jobs, advance quickly in their careers and be in an attractive position when it comes time to apply to graduate school, said Andrea Hershatter, the senior associate dean for undergraduate education at Emory University’s Goizueta Business School
“The value proposition for undergraduates is a business degree enables them to get a meaningful job after they graduate,” she said. “In addition, it allows them to do that job particularly well, and move up rapidly, which increase your chance of getting into top-tier MBA programs.”
Perhaps not surprisingly, one of the fastest-growing segment of bachelor’s degree holders applying to MBA programs are former business majors, according to the Graduate Management Admission Council (GMAC). Meanwhile, 52 percent of students with business background considered a full-time MBA program, according to GMAC s 2013 prospective student survey report.
Get an MBA For the Price of a College Degree:
But not every undergraduate business major is interested in forking over the dollars and the time required for a degree from a brand name MBA program. For this group of students, an undergraduate business program stands in place of the need to ever get an MBA. Says Hershatter: “I don’t think those value propositions are contradictory I think both paths work well for students.”
At many top business undergraduate programs, the classes on the core curriculum look similar to that of their graduate counterparts. Students emerge with working knowledge of economics, finance, and management, and the tools to succeed in the business world, says Carl Zeithaml, dean of the University of Virginia s McIntire School of Commerce. To be honest, it looks a lot like a top MBA program, Zeithaml adds.
Another advantage? A strong business foundation from their undergraduate days will stand them in good stead throughout their entire career, allowing them to easily sharpen their skills with additional classes or corporate training, Hershatter said.
As students grow in their organization and have a need for additional knowledge, there are many more ways to get that short of going back to business school, Hershatter said.
Hit the Ground Running:
It used to be that students attending business school as undergraduates didn’t have to worry about polishing their resume and interview skills until their junior year. At many schools, this is no longer the case. For example, freshman business majors at Villanova University’s School of Business take a required class that exposes them to topics such as how to explore career options, interviewing skills and how to craft a strong resume.
The Kelley School of Business at Indiana University offers specialized career services courses that begin as early as freshman year, said Idalene Kessner, the dean of the Kelley School. This early training pays off huge dividends for students, said Kessner. “By focusing on their business career and the professional aspects at an early stage, they are better prepared for their roles when they do take on these early jobs, which allows them to advance more quickly in organizations,” she said. “They’re ready to go on day one.”