The True Cost and Return on Investment of Taking an MBA in Singapore (2020)
Joel Koh●
With the economy suffering due to the COVID-19 pandemic, many workers are losing their jobs or are currently underemployed.
If you are affected, you might be considering taking up a Masters of Business Administration (MBA) to accelerate your career.
Taking an MBA might help you open doors for your career, increase your salary ceiling, and even net you that promotion, as some employers have an MBA requirement for certain management or leadership positions.
However, it will cost you.
On top of the financial cost of taking up an MBA, you will have to factor in the salary you will be forgoing, as well as the opportunity cost of the time spent out of the workforce.
As such, you might be asking, is taking up an MBA in Singapore worth it?
We will be looking at the above-mentioned costs to help you make the decision.
Information accurate as of 3 November 2020.
TL;DR: Masters of Business Administration (MBA) in Singapore Cost and ROI Comparison
| University | Tuition fees as of 2020 | Average Annual Salary (3 Years After Graduation) | Average Salary Increase Pre-MBA to Now | Rate of Return / Tuition Costs | Employment Rate |
|---|---|---|---|---|---|
| INSEAD MBA | $141,500 | $247,000 | 101% | 1.75 | 92% after 3 months |
| NUS MBA | $68,000 | $227,600 | 148% | 3.34 | 94% after 3 months |
| NTU: Nanyang MBA | $62,000 | $185,800 | 119% | 2.99 | 98% after 3 months |
| SMU MBA | $67,400 | $156,700 | 125% | 2.32 | 90% after 6 months |
| ESSEC Global MBA | $73,200 | $149,700 | 58% | 2.04 | 98% after 6 months |
Source: Financial Times and respective educational institutions websites. All figures rounded up to the nearest hundred and denominated in SGD.
Should You Take an MBA?
It all depends.
Traditionally, MBA programmes have promised these benefits: a quality education on the tenets of business, high-quality job opportunities, and a distinguished network.
An MBA is also beneficial if you plan to pursue a career in business heavy industry to take up management roles, leadership roles or as an entrepreneur.
If you work in other industries, an MBA might be less useful unless you are looking are aspiring towards management or leadership roles.
Also, I’m sure you would know that not all MBAs are not created equal.
The MBA space has become increasingly crowded with a myriad of educational institutions offering MBAs.
But at end of the day, perception of the MBA still matters a whole lot.
An MBA from a top educational institution will be viewed more favourably by recruiters and hiring managers.
As such, giving up a year or two of your work to head back to school to pursue an MBA at a less reputable institution might turn out to be a huge waste of your time, money, effort, and set your career back.
Although many business owners have MBAs, many startups are not necessarily looking for MBA graduates. Having an MBA is good but is generally not a prerequisite for startups.
Rather, these startups are looking to hire creative and innovative thinkers, who offer fresh new perspectives.
Similar to many educational qualifications, the piece of paper that says ‘MBA’ might help land you the job interview but not secure you the job.
In addition, the COVID-19 pandemic has put a dampener on MBA graduates’ job prospects.
According to Poets and Quants, a leading online publication that provides coverage of business schools, MBA degrees and education in general – large global companies are beginning to freeze and rescind MBA internships and job offers.
40 out of 116 major companies that have traditionally recruited MBA candidates or graduates have reported some form of freeze, cancellation, or rescinding of internship or job offers.
As such, now may not be the best time to take up an MBA.
What Kind of MBA Can You Take in Singapore?
Well, there are a few types of MBAs you can take in Singapore on a full-time or part-time basis which can be classified under:
- Regular MBA (General graduate business degree where students will learn technical, management, and leadership skills that take about one to two years to complete.)
- Accelerated MBA (Similar to regular MBAs, but completion time is about one year)
- Executive MBA (Two-year programme targeted at professionals with at least five years of management experience; with most students in their late 30s.
- Dual MBA (Two Masters programme rolled into one. A programme where you can obtain an additional Masters degree on top of an MBA. The programme has to be taken full-time and will take about two to two and a half years to complete.)
You can take these MBAs on a full-time or part-time basis.
How Much Does an MBA in Singapore Cost? What is The Return on Investment?
You might be wondering. How much do these programmes truly cost?
We will be evaluating the top five MBAs in Singapore (according to the Finacial Times’ Global MBA Rankings 2020), which are the MBAs from:
- Institut Européen d’Administration des Affaires (INSEAD): #4 in the world
- National University of Singapore Business School: #15 in the world
- NTU Singapore, Nanyang Business School: #35 in the world
- Singapore Management University: Lee Kong Chian: #63 in the world
- ESSEC Business School: #88 in the world.
You can find more information on the methodology used to derive these rankings here.
To help you get a general estimate of how much you will need to fork out, we will be looking at the three main sources of expenditure when you do an MBA which are the:
- MBA tuition fees
- The opportunity cost of the salary you forgo while studying for an MBA
- Monthly expenditure.
For illustration purposes, I will be using the 2019 Median Gross Monthly Income of full-time employed residents in Singapore (inclusive of CPF contributions) – an amount of $4,563.
For monthly expenditure, I will be using information from the latest monthly household expenditure survey from Statistics Singapore. In 2017/18 households spend an average of $1,628 a month.
Although this total amount is not representative of the entire population, it will give you a rough gauge of your total expenditure during the duration of the MBA.
INSEAD MBA Cost vs NUS MBA Cost vs NTU MBA Cost vs SMU MBA Cost vs ESSEC MBA Cost
| University | Duration | Tuition fees as of 2020 | Salary Forgoed ($4,563 monthly) | Monthly Expenditure | Total Expenditure Over |
|---|---|---|---|---|---|
| INSEAD MBA | 10-month full-time | $141,500 | $45,600 | $16,300 | $203,400 |
| NUS MBA | 17-month full-time | $68,000 | $77,600 | $27,700 | $173,300 |
| NUS MBA | 24-month part-time | $68,000 | - | $39,000 | $107,000 |
| NTU: Nanyang MBA | 12-month full-time | $62,000 | $54,800 | $19,500 | $136,300 |
| SMU MBA | 15-month full-time | $67,400 | $68,500 | $24,400 | $160,300 |
| SMU MBA | 18-month part-time | $68,500 | - | $29,300 | $97,900 |
| ESSEC Global MBA | 12-month full-time | $73,200 | $54,800 | $19,500 | $147,500 |
Source: Respective educational institutions
The cost of the MBA is quite eyewatering to say the least.
If you would like to keep your finances healthy, it would be better for you to do the MBA part-time.
In addition, a part-time programme means you will be able to keep your job and capitalise on promotion opportunities.
What is The Return on Investment (ROI) of MBAs in Singapore?
| University | Tuition fees as of 2020 | Average Annual Salary (3 Years After Graduation) | Average Salary Increase Pre-MBA to Now | Rate of Return / Tuition Costs | Employment Rate |
|---|---|---|---|---|---|
| INSEAD MBA | $141,500 | $247,000 | 101% | 1.75 | 92% after 3 months |
| NUS MBA | $68,000 | $227,600 | 148% | 3.34 | 94% after 3 months |
| NTU: Nanyang MBA | $62,000 | $185,800 | 119% | 2.99 | 98% after 3 months |
| SMU MBA | $67,400 | $156,700 | 125% | 2.32 | 90% after 6 months |
| ESSEC Global MBA | $73,200 | $149,700 | 58% | 2.04 | 98% after 6 months |
Source: Financial Times and respective educational institutions
Here are some things to take note of:
The salary you see in the table above is the weighted average salary of the alumnus, three years after graduation.
As for the salary increase percentage metric, what you are seeing is the average difference in alumnus salary pre-MBA to now.
50 per cent of the figure is calculated based on the absolute salary increase while the other 50 per cent is calculated as per the percentage increase relative to the pre-MBA.
The salary figures also include data for the class of 2016 and one or two preceding classes where available.
Do note that the salaries for non-profit and public sector workers and full-time students are omitted, as well as the highest and lowest salaries from each school. This was done to calculate a normalised average and with adjustment for variations between sectors.
As you can see, although. the cost of an MBA is high, the upside is high as well as MBA graduates secure high salaries three years after employment.
INSEAD MBA Singapore
In terms of absolute value, the INSEAD MBA provides the best rate of returns with the highest average annual salary for its graduates three years after graduation.
But, you can expect to see a return of 1.75 times your total tuition cost which is the lowest in the list.
NUS MBA Singapore
For the NUS MBA, it offers the most value for money as graduates have the second-highest average annual salary three years after graduation.
You can also expect to see a return of 3.34 times your total tuition cost which is the highest in the list
NTU: Nanyang MBA Singapore
For the NTU MBA, it is the next best value for money as graduates have the third-highest average annual salary three years after graduation.
You can also expect to see a return of 2.99 times your total tuition cost which is the second-highest in the list.
SMU MBA Singapore
Next up we have the SMU MBA, which is the next best value for money as graduates have the fourth-highest average annual salary three years after graduation.
You can also expect to see a return of 2.32 times your total tuition cost which is the third-highest in the list.
ESSEC Global MBA Singapore
Last but not least we have the ESSEC Global MBA, which is the least value for money as graduates have the lowest average annual salary three years after graduation.
You can also expect to see a return of 2.04 times your total tuition cost which is the second-lowest in the list.
MBA Financing
Ideally, companies would sponsor your MBA in exchange for (potential) improvement in expertise and servitude to the company.
Otherwise, the educational institutions do provide scholarships or help you finance your MBA is some way.
Do check out their websites for more information:
- Institut Européen d’Administration des Affaires (INSEAD)
- National University of Singapore Business School
- NTU Singapore, Nanyang Business School
- Singapore Management University
- ESSEC Business School
Closing Thoughts
But, as with all investments, past performance is not indicative of future returns. You are still taking a big financial risk when doing an MBA in Singapore. This cost-benefit analysis will help you decide if you should take up an MBA.
But you will need to take a long hard look at your career goals and see if is an MBA is good for you and your career.
Sacrifices will have to be made either way.
All the best!
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