Business school has long been a reliable way to advance your career by learning new skills, expanding your network, and earning a degree that carries weight on a job application. Pursuing an MBA requires a significant investment of time and money to be sure, but the return on that investment has almost universally been viewed as worth it over the years.

As with most things in life, however, timing is everything. There are signs of a slowing economy in many regions of the world. Inflation remains high. And it's an election year in the United States which always injects a certain amount of uncertainty into the equation.

What does this mean for you if you're contemplating a return to school? Two statistics have come out over the past few weeks that paint a seemingly contradictory picture about the current job market for MBA grads. Upon closer inspection, however, the way forward isn't as murky as it might at first appear.

A Tale of Two Hiring Patterns

The first bit of news, as reported by Business Insider, is that the percentage of graduates of Harvard Business School (HBS) who received a job offer within 90 days of graduation decreased from 96% in 2021 to 86% last year. A similar decline was seen at Stanford's Graduate School of Business (GSB) where only 89% of last year's MBA grads obtained a job by the three-month mark, down from 93% in 2022.

These numbers suggest a slowing demand for MBAs — even among graduates from the most prestigious business schools.

But another set of data suggests a rosier outlook. For those MBA grads who do land full-time employment, median starting salaries have increased significantly in recent years. If you were one of those 86% of HBS grads who found employment this year, your median starting salary was up to $175,000 from $150,000 in 2021. Likewise for Stanford GSB grads, salaries increased from $158,000 in 2021 to $182,000 last year.

If money is your primary driver for going to business school, this second set of numbers suggest that there's never been a more lucrative time to get an MBA.

Is Now the Right Time to Get an MBA?

Students taking the GMAT Focus Edition as part of the application process for business school will be familiar with a question type on the exam called Critical Reasoning. There's a particular subset of those questions that we teach in our GMAT Focus Prep Course called "Resolve the Paradox" where you need to make sense of two seemingly-contradictory pieces of information when evaluating the author's conclusion. That's what I see going on here.

Premise #1: Hiring of MBA grads by top employers appears to be slowing, at least for now.

Premise #2: For those MBAs who do land a job after graduation, the pay is really high.

Conclusion: Now is a great time to go back to business school and pursue an MBA!

Do you agree? How does that conclusion logically follow from the given information, especially in light of the cautionary data alluded to in Premise #1? I see three ways of reconciling these data by looking at the situation through a slightly different lens.

First, an 86% (Harvard) or 89% (Stanford) chance of landing a great job is still really high. If you didn't have historical numbers for comparison and just looked at those percentages on their own, I think most prospective MBAs would take those odds. Put another way, imagine you had an 86% chance of getting a huge return on your investment in the stock market or other business venture. Would you take it?

Second, what's the chance of getting your dream job if you don't have an MBA? Imagine two candidates who are applying for the same job. Their backgrounds and experience are similar but one candidate has an MBA while the other doesn't. Which one stands a better chance of getting hired? Even if the percentage of applicants landing high-paying jobs with an MBA is "only" 86%, it's safe to assume that the chance of landing those same jobs without an MBA is significantly lower.

Finally, the economic environment a few years from now won't be the same as it is today. One must always be careful about drawing conclusions about future events based on current information. It takes time to apply to business school, get accepted, and complete your coursework. It could be three years or more before you're re-entering the workforce with an MBA, and the world will look very different by then. Indeed, it's possible that hiring trends will have improved significantly. It's also possible, of course, that things will have gotten worse. Nobody can predict the future with certainty. But even if the job market is more competitive a few years from now, the skills and credibility that an MBA provides will tip the balance in your favor.

Additional Considerations for Getting an MBA

Increased salary is only one of the reasons people choose to go to business school. In fact, it's not even the primary motivator for most students. According to the GMAC Prospective Student Survey 2023, MBA candidates are more interested in enriching their lives (79%) than increasing their income (64%).

Additionally, as you can see in this figure taken from the GMAC Survey, nearly as many people go back to business school to gain business knowledge (61%) and enhance their network (60%) as to increase their income.

All of this is to say that when you're thinking about going to business school, consider your "Why" as much as you consider your ROI. Even if the demand for MBA grads is still down by the time you graduate, that doesn't mean you made the wrong decision. There are a lot of really good reasons to go back to school, so trust your intuition — not just the latest hiring statistics — when making your decision. At the end of the day, investing in yourself always pays dividends. Believe in yourself and go for it!