The cost of getting an online MBA for enhancing career prospects
Premium- Such programmes are better suited for working professionals who cannot afford a career break or pay high fees
Consider this. You could complete a Master of Business Administration (MBA) in just six months, remotely, without ever having to take a career break and by paying ₹2- 3 lakh in fees. After completion of the course, you can even get an increment of 20-70% in your pay. Online MBA certification programs, often positioned as ‘alternative’ MBA courses, are making this possible, with some caveats. We explain.
Executive or short online MBA programs are not a new phenomenon, but have found more takers amidst the pandemic. “There is a sea change in the way EMBA (online MBA) is conducted post pandemic and the quality of EMBA has greatly improved with greater participation of corporates in designing the courses, tailor made for the industry," said Mahesh Bhatt, chief business officer - consumer, industrial, and rmerging verticals, TeamLease Services.
Eruditus is one such platform that collaborates with elite management schools, the likes of IIMs and XLRI in India and Ivy league colleges abroad, to offer 6- or 9-month digital MBA. Fees for such programmes ranges from ₹2 lakh to ₹7 lakh, depending on the course. Some elite institutes in India, such as the Indian School of Business (ISB), offer their own short online managerial courses for ₹2-3 lakh fees but are available only to professionals with work experience of at least 10 years.
Stoa School is the latest player in the alternative online MBA space that caters to people looking for career transition and progression in the startup ecosystem. It offers a 6-month program for a fee of ₹2.5 lakh. On completion of the course, it also helps students find jobs with partner startups. “We have tie-ups with about 150 startups. After the completion of the program, as part of our career services, we connect the right candidates with startups that have job openings," said Aditya Kulkarni, co-founder, Stoa.
The common link between all these platforms is that their user base is majorly made up of working professionals with a few years work experience on their resumes. These people are either looking for career transition or to upskill in their existing roles to rise up to senior managerial positions within the same industry. Experts say people who cannot afford a full-time MBA, which can cost anywhere between ₹10 lakh and 40 lakh, and don’t want to commit two years to college opt for such courses.
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“EMBA is best suited for working executives and those with constraints of time and money," said Bhatt.
Mint explains how alternative MBA certifications measure up against traditional MBA degrees in terms of earning and employment prospects.
How costs compare
Fees for MBA degrees start at ₹10 lakh. The cost of a degree from sought after IIMs (Bangalore, Calcutta, Bangalore etc) is around ₹23 lakh, whereas the newer IIMs charge ₹15-16 lakh. Degrees in prestigious private business schools, like ISB and XLRI, are relatively expensive at ₹25 lakh and ₹45 lakh, respectively. This does not include expenses related to utility bills, meals and other miscellaneous costs.
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Of course, tier-II and tier-III colleges charge less at ₹10-13 lakh in fees, but they don’t guarantee placements and the average placement packages are also lower at ₹6-10 lakh.
Here, getting an online MBA certificate may make more financial sense as the earning potential is nearly the same at one-tenth the cost. You spend only ₹2-3 lakh and can expect a sizable increment. For instance, Stoa graduates see an average 72% increment in their compensation, as per Kulkarni. “Typically, people before joining Stoa have a pay package of ₹7-8 lakh and after the course is completed, it moves up to ₹13-14 lakh," he said.
Emeritus, a subsidiary of Eruditus, learners in Emeritus Impact Survey of 2021-22 said they received a 17% average increment in their salaries post completion of their courses.
The caveat in both the cases is that these candidates are not freshers and hence, prior work experience may also play a part in their career progression.
Since the fees of these courses are affordable, you may not need to take an education loan either.Say, you have bagged a ₹13 lakh package after studying from a tier-2 college and have a ₹10 lakh education loan to repay. At a modest 8% interest rate and repayment tenure of 5 years, you will shell out roughly ₹2.4 lakh annually towards the loan. This calculation has taken into account the tax deduction one can claim on the interest paid towards an education loan.
Leaving a job for a two-year residential program also carries opportunity cost as you quit your job and forgo salary for two years.
Job prospects
Headhunters and recruitment agencies saidthose with online MBAs get as much attention from recruiters as their counterparts with degrees. But, a fair comparison can only be done with tier-2 or tier-3 MBA colleges, as per Sanjay Shetty, director - professional search and selection and strategic accounts, Randstad India.
“Reputed colleges definitely have an advantage. They have a set route in the form of placements. If you keep these select elite business schools aside, people with online MBA certifications are not at a disadvantage with recruiters vis-a-vis those with degrees."
Shetty added that large corporates, consulting firms and multinational companies still prefer to go through the traditional route of hiring management students through college placements for entry level roles. “Some of these companies have global shared services and research centres in India for which they look beyond degree holders from top business schools."
Also, since these courses are unaccredited, they may not hold much relevance globally. However, a certification affiliated to a college in other countries can open up employment opportunities in that country.