The Cost And Benefit Of A Master’s Degree

(The Cost And Benefit Of A Master’s Degree in Project Management)

This post is an in depth post regarding how a master’s degree can impact your Project Management career. Given the analysis I provide it will require in depth reading.

Here’s my take on why a master’s degree in Project Management is worth the investment of your time and money based on the likely hood of its ROI (Return on Investment). I see variations of questions on this topic quite often and I’d like to address it here. So much like a MasterCard commercial we are going to tally up the costs, find what’s priceless about this type of investment (Master Degree in Project Management vs. PMP Cert.) and see if it may be the right choice for you.

But first I want to talk about some other numbers that may get your attention in regards to Project Manager salaries. According to PMI most of their 2012 Seventh Edition salary surveyed participants (71%) said that their total compensation (including salary, bonus and other forms of compensation) increased over the 12 months prior to the salary survey. This speaks to how employers are valuing Project Managers globally.

According to PMI’s seventh edition salary survey the median annualized salary recorded in the survey, across all countries, roles and experience level is $92,000 (USD). The United States Ranked 6th of all 29 Countries surveyed at a median Salary (50th percentile) of $105,000 (with 5 to 10 years of experience). For curiosity sake, I’ll tell you that Switzerland had the highest Median of $160,409 and China was the lowest at $23,207. All rates mentioned above were for the Median Salary Exchange Rate .i.e. in USD.

Of all US Project Manager participants surveyed only 11% have a degree in Project Management and 89% do not. Now here’s an even more interesting statistic provided by PMI regarding the correlation between salary and education of those surveyed in the US for salaries by highest formal education level obtained. Here are how the numbers stack up:

Median Salary By Formal Education:

1% had a high school diploma: $98,000

9% had some college or associates degree: $97,000

43% had a 4 year degree: $101,000

45% had a master’s degree: $108,528

2% had a doctoral degree: $120,000

So in terms of going from a bachelor to a master’s degree, what is the ROI? Is it really necessary to get the Master Degree in Project Management?

From the survey we can deduce some key information (as a representation of the Project Manager Population in the US):

1. Only 1% of project managers have less than some college experience (that was surveyed). So you will more than likely need a degree to be successful in becoming a Project Manager. We don’t know how many years of experience these project managers have either. So reason would conclude most likely it is significant. I think it’s fair to conclude your chances of becoming a PM with only a high school diploma making $98,000 is slim to none.

 

1. Again, we see low numbers of those Project Managers surveyed with only some college or an associate’s degree (only 9%) make a median salary of $97,000. Another relevant salary statistic is that Project Managers with a median salary of $97,000 have 10 to 15 years of experience. I think it’s reasonable to say This is the longer route to getting to $97,000 annually.

 

1. 43% of Project Managers with a bachelor’s degree have a median annualized salary of $101,000. While this may sound good enough, more than 30 percent of Americans age 25 or older (56 million people) have a bachelor degree. The number of those 56 million that go on to become project managers is probably significant. So your chances of standing out for that “Bachelor’s Degree” required PM gig are slim. Not only do you have to worry about the many other candidates with bachelors, but the more appealing master’s Degree candidates too (we haven’t even talked about those candidates with all the above and who hold a PMP certification).

 

1. 45 % of Project Managers surveyed that make a median annual salary of $108,528 have a master’s Degree. (We also know that only 11% of those Project Managers surveyed in the U.S. have a degree in Project Management. So a conclusion can be made that if you don’t have a master’s degree and this survey is a good representation of the total US Project Manager population (a likely possibility) you have your work cut out for you. Not only do you have to compete with those PM’s that have a bachelor’s degree, but with those that have a master’s degree (and/or PMP certification).

 

1. 2% have a doctoral degree. It is reasonable to say that this number is so low based on the very few individuals there are that go on to get their doctoral degree. It is also reasonable to see how a doctoral candidate could make an excellent project manager if the PhD is in a similar area as the work the project manager will be managing. Their level of expertise would be at the highest level formal education, research, and study.

While I’m not stating that it is impossible to get a Project Manager job with less than a master’s degree, it’s very difficult especially if you have less than 4 to 5 years of experience. The competition is high and if you don’t believe me go to LinkedIn.com and type in the following search and see how many hits you get:

Type without quotes: “PMP, MPM, MSPM, Project Manager”

Assessing The Cost Of A Master’s Degree In Project Management

The average master’s degree’s cost approximately $35,000. To give you a better idea of what this means let’s compare some numbers against a few schools (tuition was found at the time of this post. Please refer to each school for cost as they are subject to change).

University	Tuition Costs	Cost Per Credit	Credits Required
Boston University	$43,932	$1046	42
University of Phoenix	$41,364	$766	54
Keller Graduate School of Management	$32,172	$766	42
Capella University	$29,280	$610	48
University of Wisconsin Platteville	$$22,680	$630	36

If you wish for a master degree at a more prestigious school similar to Harvard or Wharton it will cost you between $102,000 and $108,000. As you can see getting a master’s degree (not just in project management) isn’t cheap, but how can you get the most return (salary, compensation, etc.) for your money (ROI) and to make the decision to pursue a masters degree (in project management) for the sake of securing a [better] PM job?

Here are the things you need to analyze for yourself first, in light of the data I have presented:

Do your market Research:

• Check online job boards like CareerBuilder, Monster, Dice, Simply Hired and look for Project Manager jobs that have salaries listed in your target job market.
• Do a Google/Bing/Yahoo search for Project Manager Salaries.
• Call a graduate school’s student resources department and ask them what the salary range is for graduates that receive roles as a Project Manager after graduation.
• Ask your colleagues/friends that are project managers what their market’s salary range is.
• Contact local head hunters (recruiters) in your area and ask them.

Then ask yourself the following questions:

1. What is the salary range of Project Managers being hired in my area?
2. Where do I want to go to graduate school?
3. What is the cost of that graduate school?
4. What kind of increase in Salary is reasonably expectable for my experience and credentials once I have the graduate degree?
5. Based on that increase how long will it take me to pay back the loan or earn what I have spent on the master’s degree?
6. Do I plan to be in this career field for as long it takes to at minimum break even on the cost of my education?

If the costs outweigh the benefits of continuing your education you might want to look at other alternatives to pay for school or choose a different school. You could also decide to just not doing anything. (Not recommended) You might just have to endure a longer return on your investment. The PMP credential is a much cheaper alternative, but has more stringent requirements (prep and exam costs, formal education requirements, years of experience, may be audited, etc.)

Here’s an example of a possibility :

Meet Robert.

Robert lives in the Midwest. He is 34 Years old and is single. The average salary that he gets from his market research is: $87k to $104k for someone with a master degree working as a Project Manager. Robert currently makes $68,000 as an IT Manager. He has the possibility to increase his salary by $19000 to $36,000 if can land a job post grad school. He really wants to get away from operations and focus on project management for his career.

He is hoping to be in the field of project management for another 15 to 20 years. Robert looked at the costs of schools in his area, but doesn’t have the convenience of a flexible schedule and decides to go online at Keller Graduate School of Management. He saved 10k to go toward his master’s degree over the years and his job will contribute $5000 each year. He can pay the rest off while he finishes the master’s degree Program in Project Management within about 2 years. He will be 36 years old.

In total John will be out of pocket a total of $22,172. He decides to go for it.
3 years later John is now 37, has finished his Master’s of Science in Project Management Degree a year earlier and has finally landed a job as a Project Manager making $88,000 a year. After doing some rough calculations John figures out it will take him 2 to 3 years to earn back his investment to break even. At that point he will be 40 years old.

My Personal Opinion

A master’s degree is a great asset if you can manage to exploit its many benefits for the lowest cost while still maintaining its value (i.e. the school’s cost vs. prestige ratio). I have two graduate degrees and am myself PMP certified. I rank probably in the top 15th percentile of the study done above for what PM’s make in the U.S. My master’s degrees have been a strong factor in my ability to obtain contracts, jobs, and establish a level of “expertise” in the field of project management for my business.

Here are my opinions of why project manager’s should pursue a master’s degree in Project Management:

1. Always Invest In Yourself. When it comes to investing, the best assets are ones that can’t be sold or stolen, are low maintenance and won’t rot away, but continue to yield a return on your investment. A master’s degree is one of those investments. Once it’s yours, it’s yours. The information you obtained will always be with you (except in the circumstance of severe amnesia). It will always work to your benefit if you use it. Period. This can’t be said for many things in life, including the PMP certification. Whether you obtain your master’s degree at 19 or 56 it will always be considered in evaluating your ability to perform for an organization when it’s applicable.

 

1. Formal Training Is Typically Superior To Informal Training. (That’s typically why you have to pay for it.) Having formal education is always a plus with or without actual experience when it is applicable directly to an area of responsibility. However, it is always better with experience. I have found that managers appreciate this greatly. My education means that an employer has to spend less time training me how to perform my job. I understand many theories and practices behind project management (and business – MBA). I spent two years of my life learning project management so that I actually know what I am talking about when I speak in regards to project management. Managers have asked me to train others in project management, whether a Project Manager Team Lead, or informally.

 

1. A Master’s Degree Can Open Locked Doors. The master’s degree (especially in project management) allows you to apply for Project Manager positions that require having one and there are some jobs that do in fact require a Project Manager to have one. It typically is preferred even when the requirement of the job or contract only requires a bachelor degree (written and unwritten).Two candidates with all skills, experience, and etc. are equal, but one has the master’s degree and both wish for the same salary. Who do you think the Hiring Manager will choose?

 

1. Helps To Establish Expertise. A master’s degree in project management helps to build your knowledge and expertise in the field of project management. Especially, when it comes to promotions, being assigned the high visibility projects, speaking engagements, and being chosen to lead project management training programs. Managers have and continue to ask me to train others in project management, whether as a Project Manager Team Lead, or in a more informal role in the work place. This has often led to better opportunities such as being asked to teach a undergraduate university class. Everyone wants to watch, hear, or read from the “guy/gal” who’s been there, done that and has the credentials to back up what he is saying. i.e. Tony Robbins, Dr. Phil (Oprah show), Bill Clinton, etc.

 

1. Quickly Build A Foundational Knowledge Base To Practice Project Management From.

   This is why you see that a lot of job ads will equate a bachelor’s degree to 6-8 years of Work experience. In most cases it’s either you have a degree and can apply or you don’t and can’t apply. Education in project management will teach you the ideas, practices, and theories. Work experience is for practical application of those ideas, practices, and theories you have learned. Here’s the potential problem with learning in the work place. There’s a good chance you will learn bad practices of project management. It is much harder to unlearn something than it is to learn something.

This information works well in interviews for new project managers with a master’s in Project Management, but has little to no experience in an interview. Here’s another example of standards for when experience is equal to education. PMI also uses a standard for those with a bachelor degree and those without for the PMP exam. It’s the difference approximately 3000 Hours leading projects. In a standard work year there are 2080 hours. 80 hours of which are typically vacation and another 48 to 80 in company recognized holidays. Most Project Managers that manage projects don’t spend 100% of their time managing projects so that then decreases the number of hours they spend managing projects. So you can start to see how valuable education is over experience in terms of qualifying for a credential or Position that requires at minimum a bachelor degree.

 

 

• Higher Pay For Your Investment. There will always be justification for asking for a higher paying salary than someone without a degree. It’s all about recouping your investment. It’s a reasonable request. Whether your request is approved is about your ability to negotiate, and the hiring manager’s budget. Let’s say hypothetically it will cost you $55,000 in loans for a master degree w/interest. (Simple math for simplicity sake) But you are able to make 25,000 more a year every year after earning the degree. It will only take you 2.2 years to see your investment break even (If you put that additional money towards paying off the loan). But you will continue to make that additional 25,000 or more every year thereafter.

 

In my opinion I can’t say I see the cons to getting a master degree as a long term investment. If you count making the initial investment of your money, time, effort to be too much of a con, then this isn’t for you. But that’s for you to decide.

In the next post I will show you the cost of getting certified as a Project Management Professional and its benefits.