A New Way to Assess the ROI of an MBA

• LinkedIn has created a new ranking of MBA programs that looks at factors other than acceptance rates and test scores.
• Instead, the company includes schools on its Top MBA Programs list according to how well they help graduates achieve long-term career success.
• Drawing on LinkedIn’s own data, the ranking measures factors such as job placement rates, career advancement potential, and network strength.

If you’re a prospective student who is thinking about earning your MBA degree, you’re likely to have consulted the many business school rankings (two of which, incidentally, recently announced changes to their methodologies). Compiled by sources such as The Economist, the Financial Times, and U.S. News & World Report, these rankings assess the quality of MBA programs according to a wide range of factors, from which ones are most competitive to which are most diverse to which place the greatest emphasis on sustainability.

Networking platform LinkedIn now has added a new ranking to the mix, which evaluates schools based primarily on one question: How do MBA programs translate into career success? Last month, the company announced the 50 business schools that made its inaugural list of Top MBA Programs.

Taking the top five spots in the inaugural survey are the full-time MBA programs at Harvard Business School at Harvard University, the Stanford Graduate School of Business at Stanford University, the Tuck School of Business at Dartmouth College, the Wharton School of the University of Pennsylvania, and the MIT Sloan School of Management at the Massachusetts Institute of Technology. Rounding out the top 10 are the Kellogg School of Management at Northwestern University, the Haas School of Business at the University of California Berkeley, the Yale School of Management at Yale University, the University of Chicago Booth School of Business, and the Fuqua School of Business at Duke University.

In a recent blog post, Juliette Faraut and Taylor Borden, both editors with LinkedIn News, explain the reasoning behind the new ranking. Because an MBA is such a large investment, they write, the company wanted to provide prospective students with a glimpse into which programs might offer them the best chance to achieve their long-term career goals.

After reviewing research indicating what students want most from their MBA programs, they write, “we were able to compile a list of universally important factors. The goal was to focus on post-MBA career outcomes rather than traditional prestige markers like acceptance rates or test scores.”

Because an MBA is such a large investment, LinkedIn wanted to provide prospective students with a glimpse into which programs might offer them the best chance to achieve their long-term career goals.

To be eligible for the ranking, MBA programs must have met four basic criteria. First, they must be AACSB-accredited. Second, they must be full-time programs based in the United States. Third, they must have at least 2,000 alumni as of August 31, 2023. And, finally, they must have produced no fewer than 500 MBA graduates between 2018 and 2022, the time frame for which the company gathered data.

The Top MBA Programs list compares schools based on their ability to deliver results in five areas:

• Job placement and demand—the number of students who land jobs within one year of graduation and the number of InMail messages they receive from recruiters over LinkedIn’s platform.
• Career progress—the promotion rates a school’s alumni achieve, as measured by the same methodology LinkedIn uses to evaluate organizations for its Top Companies list.
• Network strength—the connections a school’s MBA alumni have to each other, the average number of connections they have with individuals in senior-level positions, and the growth of their networks before and after graduation.
• Leadership potential—the number of a school’s alumni who have become entrepreneurs or attained C-suite roles.
• Gender diversity—the level of gender parity in a school’s MBA cohorts.

In their post, Faraut and Borden also emphasize that an MBA itself is not necessary for career success. LinkedIn data show, they note, “that skills-based hiring—and the idea that you don’t need a college degree to land certain roles—is gaining traction.” But an MBA degree can offer advantages such as opportunities to hone a range of hard and soft skills, build larger networks, and gain access to a wide range of career prospects.

If you are considering pursuing an MBA degree, you should be aware that rankings aren’t necessarily objective. Additionally, individual rankings focus on only 50 or 100 programs—with many of the same schools appearing on different rankings—which means these lists highlight only a small portion of quality programs. By design, they exclude hundreds of other AACSB-accredited schools that could be a good cultural fit for your values, support your career aspirations and preferences regarding location and delivery methods, and even offer scholarship opportunities.

But if you keep these caveats in mind, you can view the business school rankings as one of many ways to evaluate the diverse array of MBA programs based on the factors that are most important to you. If you are weighing long-term career success heavily in your choice of program, LinkedIn’s new ranking could help you narrow down your search.