* One MBA equals 10 years IT experience, researcher says
IT professionals who lack an MBA might be shocked to learn how much money they’re leaving on the table. A new study of IT salaries finds that a Master of Business Administration degree is worth as much as 10 years of IT workforce experience, and is far more valuable financially than any other master’s or bachelor’s degree.
Specifically, an IT professional with an MBA degree earns 46% more than one with just a bachelor’s degree, and 37% more than a counterpart with any other master’s degree, according to a study published in the March issue of Management Science.
IT executives are expected to provide the technology necessary to drive business innovation, and so hiring practices are placing greater value on a business degree.
“Firms increasingly rely on the managerial and technical skills of IT professionals to design and execute IT-enabled business processes,” write researchers Sunil Mithas of the University of Maryland, and M.S. Krishnan of the University of Michigan, in a study titled “Human Capital and Institutional Effects in the Compensation of Information Technology Professionals in the United States.”
Mithas and Krishnan examined four national online surveys from 1999 to 2002. Many studies in the past 20 or 30 years have looked at the question of whether an MBA boosts IT pay, but were hampered by small sample sizes and other factors, Mithas tells Network World in a phone interview.
The new study examines more than 50,000 employees nationwide and “for the first time shows that [an MBA] really leads to significant improvement in one’s salary,” Mithas says.
Curiously, the study found no evidence that employees who have both an MBA degree and significant IT experience gain a significant edge over people with an MBA only.
Females may still suffer some discrimination in the IT workplace. Women earn about 9% less than men even after accounting for age, job level, education and work experience, the study found. Mithas says he is surprised by the persistent gap between males and females, though he speculated that in addition to discrimination, women’s choices pertaining to marriage and childbearing could affect the average salary for females.
Mithas did find that businesses value experience from other firms more than experience gained by employees within their own walls. In other words, switching companies is how an IT pro can get a big raise, because companies like a wide range of experience.
“There’s not much to be gained staying put in the same job and doing the same thing over and over again,” Mithas says.
An IT employee’s salary goes up an average of 3.3% each year he or she stays in a current job. Extrapolating the numbers, Mithas notes that a person who just earned an MBA degree and is entering the IT profession can expect a salary as high as someone with 10 years IT experience but no MBA.
IT pros who lack an MBA would do well to take courses that boost business skills and help them gain a greater understanding of how information technology fuels the success of a business, Mithas notes.
One other finding: IT pros whose top goal is earning a high salary should probably stay in the for-profit business world. Nonprofit and government IT employees earn 7% less than their for-profit counterparts.
Readers, feel free to post your comments on this story. What do you think is more valuable, education or experience? Is the time and expense required to earn an MBA worth the long-term financial gains?
For some further reading, check out my colleague Linda Leung’s article from last year comparing master’s degrees to IT certifications.
