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What is the ideal work-experience prior to an MBA?

One of the most popular posts on this blog has been this one, co-authored by me and Shubham while we were still students at NITIE. Even after 10 years, the post has stood the test of time and continues to guide new aspirants to take a right decision choosing between taking up a placement offer vs. going for an MBA.

This post however is dated and also leaves some key questions unanswered. One such question is as to what is the ideal work experience prior to an MBA. One visitor to this blog asked me this question on email and while I was replying to him, I realized that the answer may benefit several others who visit this blog. Hence reproducing a generalized summary of my reply to the reader here.

If you look at it from perspective of jump in salary that you get before and after an MBA, then, the earlier you do an MBA, the better it is.

For example, if you are a fresher, as an engineer you'll end up with a package of 3-4 Lakhs, while after an MBA may be 6-8 Lakhs. If you have less than 2 years of experience, most companies treat you as good as a fresher, so effectively your work experience is discounted.

 The best bracket to get into an MBA is 2.5 to 3.5 years of experience when your work-ex is considered, so if you were already at a salary of ~5+ lakhs, you are likely to end up at 8-9 Lakhs package post MBA for sure - that's a good jump for spending two years frolicking :-)

After 3-3.5 years of work ex, the returns start diminishing, not because of less value of an MBA, but because your 'pre-MBA' salary after 4+ years of experience itself is high enough and hence investing two years in a job will usually bring your salary to similar level (say close to 9 lakhs) as would it be after investing the same number of years in an MBA. Most companies find it difficult to offer different packages to people who have 3.5+ years of pre-MBA work experience compared to their peers who may have 2.5-3.5 years. So if you look at a period of immediately after the MBA course, you are actually at the same level or may be even worse off, instead of if you would have continued in a job.
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However, the above is not the complete story because most people forget to look at the long term impact of an MBA on your future. If you do an MBA instead of continuing in a job, then your immediate salary level after an MBA matches that of your peers who have continued in the job. However, the kind of profile you get after an MBA for the same salary is quite different than what your peers are doing.

This difference in profile starts making a difference in your future prospects when you cross 6-8 years of work experience bracket in your career - with MBA vs without MBA. This is the point when you start getting close to middle management positions where (a) an MBA is a important criteria in many companies to get promoted beyond this level (b) your ability to perform at middle management levels is far better if you have an MBA - this obviously gets reflected later in your career path when you are about 10-15 years of experience bracket.

 In summary, if you do your MBA post 4 years of pre-MBA work ex, even though the immediate results are not so promising, it definitely puts you on a higher pedestal than those who don't have an MBA and is hence still better for the long term career prospects.
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There is another important criterion though to decide on when you should do an MBA - this is your ability to succeed in competitive exams to qualify for the best of MBA schools in the country and abroad. Remember that your ability and propensity to be able to study hard, and keep your mind fit enough to score higher is the highest when you are graduating. From that perspective, it is best to actually try to get into an MBA immediately after your engineering because you can possibly have a shot at the best B-schools in the country.

As you get more grooved into a work environment in office, not only does the spare time available to you reduce, your ability to remain focused on studies and your ability to attempt for "scoring" becomes less prominent. Over a period of time your work responsibilities will also increase leaving you with less and less time after office hours. Another reason is also that the kind of thinking that makes you a great office performer may not always be the same kind of thinking that helps you score better in competitive exams - this is ironical and sad, but true.

Hence, I believe the best thing to do is to prepare for an MBA all the while, while you are in the college, while you are in the first year of your job, then next year and then year after next - until you get an MBA offer, which you think, you will not be able to improve next year.

If you have both offers at hand, whether to go for an MBA or take up a job is a key decision for your future and one may only speculate but never be sure of what path one ought to take. My advice here would be doing an MBA is always the better option than otherwise, unless there are financial constraints to do so. The moment may come right after college, after one year of experience (even though this would mean you loose on one year's of hard work in office as it will get virtually washed off post MBA), or after two or after 3 or 4 years. If you want to do an MBA - work experience should not be a hurdle.
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Now consider if you have a bond with the (pre-MBA) employer to compensate them if you quit before 1 or 2 years. Here, let's assume that there is a Bond of  5 Lakhs and the job on the offer pays you 4 Lakhs per annum. Given than your first year's package pays for almost everything of your Bond except 1 Lakhs, I will suggest you take up the job.

My logic is that when you finally face a recruiter after an MBA, you always lose some marks for sitting idle for an year even though you had an offer in hand. The world is competitive and sitting idle only preparing for MBA competitive exams is no more considered a worthwhile thing, especially when everyone else gets into an MBA while they also were working at a day job.

Also, there is a risk that if you let this offer go and do not qualify for an MBA in the first year, you'll either have to sit idle for two years (which is a very bad thing to see on your CV) or take up a lesser paying job after having been sitting idle for an year and yet prepare for an MBA in the second year. Given the risks - I will instead go for a job.

Also recognize the fact that often when they interview you for entry to an MBA, one advantage people with work ex have is that most questions are likely to be focused on your work and not on what you studied in the final year of your engineering. It is usually easier to answer questions about your job because you are doing it yourself, than answer technical questions about papers you studied in final year.
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Having said all the above, an important disclaimer that I got into my MBA immediately after my Engineering and then got into KPMG which has been my first and last employer till date since the past 10 years - you can read more about this here. So most of my advice above is based on vicarious observation of experiences of my friends who came from different backgrounds in the MBA program at NITIE and then went into various career options in the industry.

1 comments to " What is the ideal work-experience prior to an MBA? "

  1. Another perspective can be considered...
    Where you want to get a job into post MBA ... for instance, if you wish to get into your family business, initiate a start up/ entrepreneurship... don't waste time between your grad / post grad. From a consulting perspective, it helps to have "industrial" experience, but not IT/BPO ... The relevancy of experience is critical, sometimes it backfires ... Also, what's the attitude of the recruiters... if they need fresh minds than fixed minds ... they'll prefer to opt for fresh candidates (like sales / marketing roles, field jobs... );
    it's a tricky thing, as prior to MBA we really don't know (most of time) ... where we want to be!! (Do we know post MBA??!!) :)

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