The MBA has long been seen as a stepping stone to executive roles. However, a recent trend has emerged, with more MBA graduates opting to start their own businesses rather than climbing the corporate ladder. This shift is making employers increasingly hesitant to fund their employees' MBA studies.
According to the latest Financial Times MBA rankings, nearly 30% of students use their MBA as a launchpad for entrepreneurship. This divergence from the traditional path of corporate advancement is leading to a decline in employer-funded MBA programs. The average tuition cost for an MBA in 2024 has reached $95,000, and only 18% of students have their full costs covered by their employers.
Older students, particularly those in their 40s and 50s, are more likely to pursue entrepreneurship through part-time MBA programs. These students often choose the Executive MBA route, balancing their studies with their existing careers.
Employers are becoming increasingly cautious about investing in MBA programs for employees who may leave the company after graduation. A recent study found that many MBA graduates who were funded by their employers eventually left to start their own businesses.
One MBA graduate, who was funded by her law firm, shared her experience. While she found the MBA to be valuable, she also acknowledged that it may have fueled her entrepreneurial ambitions. The networking opportunities and exposure to different business models provided by the MBA program helped her transition into the startup world.
The growing trend of MBA graduates starting their own businesses is likely influenced by the networking opportunities and entrepreneurial mindset fostered by these programs. However, it also poses a challenge for employers who are seeking to retain their talent and invest in their career development.