Though I received some considerable flak for my post on the possible end of the fad curve for the popularity of the PMP, there seems to be some indication that it may be a better investment than getting an MBA. Viewing it from a very general ROI perspective (getting back more than you invested), the amount of money and time needed to invest in an MBA compared with what is needed in money and time for a PMP, the difference on your return on investment can be dramatic.
For example, PMI’s 2011 annual salary survey indicates that getting a PMP will earn you an average of 16% more (approximately US$14,500) than if you were not PMP certified as a project manager. If you take into consideration that it costs around $600 to apply, about $900 – $1,500 to take a decent PMP prep class and about $200 more to buy books, additional prep material, etc., that’s a cost of around $2,000. If we buy into PMI’s survey, that means for $2k you can expect to increase your return to be around 625% in the form of a salary increase. In my own case, I spent around $2k total for my PMP and I got an increase of $30K going from technical lead to project manager which means my return was 1400%! Both the PMI salary survey as well as a survey by ZDNet Tech Republic indicate that PMP certified project managers earn on average $102,000.
Let’s contrast that with what the return would be to graduate from a top tier MBA program like Harvard, where it costs around $112,000 to make an average of $102,000 which comes out to a -8.9% return on investment! This graphic from a WJS.com article hits this point home:
As the article points out, it is a combination of soaring tuition costs, glut of MBA graduates entering the workforce and general dilution of the graduate degree:
For graduates with minimal experience—three years or less—median pay was $53,900 in 2012, down 4.6% from 2007-08, according to an analysis conducted for The Wall Street Journal by PayScale.com. Pay fell at 62% of the 186 schools examined…
Another burdensome issue: a high debt load. Nearly 60% of graduating M.B.A.s said they expected to repay some loans after graduation, according to a 2012 GMAC survey. Among households headed by people with student debt who attended graduate school and are under 35, average student loan debt climbed to $81,758 in 2010 according a Wall Street Journal analysis of Federal Reserve data. That figure is up from $55,594 in 2007…
A weak economic climate is only partly to blame for the M.B.A.’s plight. The changing nature of B-school programs, evolving corporate needs—as well as the perceived value of the degree—have all helped dilute the M.B.A.’s allure.
Formerly, the traditional M.B.A. was mainly the product of a full-time, two-year program. But beginning in the early 1990s, many schools created part-time and executive M.B.A. programs, with lower-ranked schools often following in the footsteps of academic leaders. Online degrees also gained in popularity.
As a result, the number of M.B.A. degrees granted has grown faster than the population, says Brooks Holtom, a management professor at Georgetown University’s McDonough School of Business.
Relatively speaking, this makes getting the PMP a much better proposition than getting an MBA! So it’s with no surprise that I see increasing advertisements for graduate certificates and even management degrees in project management that tout the benefits of acquiring this route for a more efficient road to a six figure income.
Here’s a great recent example from the University of Utah:
Next month, the University of Utah will debut a project management training program. The new program targets both seasoned managers and those looking to shift careers.
“Project management presents a unique career opportunity,” said Anne O’Brien, director of Professional Education at the U. “It’s one of a few professions where you don’t need a graduate degree, but can still readily earn six figures. Plus, these skills are becoming essential in almost every industry, so project managers can easily switch industries and avoid job losses.”
“Project management is one of the fastest growing professions in the world, and as such, certified project managers are some of the most sought after professionals in the world,” said Shelley Gabriel, education outreach manager for Professional Education at the U.
In all fairness, the MBA teaches (or purportedly teaches) you general business management theories and practices that go beyond what the PMP exam does. In addition, you will network and have the backing of a prestigious alumni (for the top tier schools) that you just won’t get with a PMP. The PMP also requires that you have been a working PM professional for at least 3 years whereas you can get into an MBA program right after college, and is probably why many people who were in my PMP prep class as well as classes I have taught for PMI-LA already have their MBAs.
The popularity of degrees and certifications comes in waves, but unlike some of the more technically specific degrees and certifications, both the PMP and MBA are based on well known, long developed and sound business principles and practices (the PMP often wrongly gets cataloged as an IT certification which is hardly the case since project management cuts across all industries and sectors, but just happens to be popular in the IT field currently) that will be around as long as people buy and sell stuff.
But in the short run, if you are a mid-career professional and a project manager by trade, it might be better to get a PMP and hold off on or maybe entirely write off the MBA. But with any certification or degree that’s in flavor at the moment, you have to decide if what you invest in time and money will allow you to rise above being perceived as just another resource commodity and to differentiate yourself from the crowd.
At the moment the MBA seems to have become a commodity with the PMP (and other PM certifications) showing signs of possibly following suit.