We look at whether or not the investment required to attain an MBA is worthwhile in the current economic climate.
When Noel McGonigle decided he wanted to leave the RAF after 22 years and move into an HR role in the private sector, he invested in an MBA at the Open University. Although he had built up years of experience in managing and coaching people, he wanted those skills that he had acquired to become transferrable outside the military.
"It was hard work. You have to be really disciplined and really want to do it," says McGonigle, who took three years to complete the MBA, doing much of it remotely from various postings with the RAF, coupled with weekend tutorials and summer schools. But the effort paid off, and he secured his first senior HR role with consulting company Mercer, where he soon worked his way up to European HR business leader. Since then, he has moved on to become HR director of telecoms company Azzurri Communications, where he has been involved with the integration of 16 acquisitions and a period of rapid growth.
"People recognise the value of an MBA. It was key to me getting my first HR job at Mercer and was very important in their decision to shortlist me," he says. He adds that the exposure to other aspects of a business that the MBA provided him with helped him to cope with the demands of working in a fast-moving, acquisitive company.
Top tips if you're considering an MBA
- Look at the course descriptions, required classes, etc. Do they suit your career objectives?
- Consider your long-term career goals. Will an MBA meet these or would you be better off acquiring an HR-specific qualification?
- What are the selection criteria? Will you attend an interview, for example?
- How will you fund the course? Are you eligible for any assistance from your employer?
- Buddy up with someone who has completed an MBA already to get an idea of the time and commitment involved, as well as how it has affected their career.
- Some schools (such as the Open University) offer an option to do some of the course online - look into these if you travel frequently or have to juggle lots of things outside work.
- Check out the school's alumni network and the support it offers after completing the qualification - this could make a real difference to your career.
The current economic climate means that HR needs to acquire wider business skills and experience more than ever. The latest Risk Index from Lloyd's shows that, of the top five risks businesses faced in 2011, the second biggest - after losing customers - was a shortage of talent and skills. Being able to respond to this risk, while at the same time aligning this with the wider business strategy, means that business-savvy HR professionals have an important role to play in getting organisations back on track.
Helena Parry, market development director at recruitment outsourcing company Ochre House, believes that, by seeking an MBA or similar business-focused qualification, HR would be better placed to spot the needs of the business - such as future skills shortages - before they become a critical issue. "HR needs to put programmes in place to make the link with business success: how the company goals impact the talent side and vice versa," she says. "HR needs to establish early pipelines. Doing an MBA can help accelerate that link between what HR does and what the business needs."
When it comes to promotion prospects and the chance of a seat at the board table, an MBA can prove a worthwhile investment. "I don't think you 'need' an MBA to move up in HR, but it does fast-track your credibility," says Noel McGonigle. "I thought my operational HR knowledge was good enough; what was more important was to be commercially aware and to be able to talk the same language as the other area leaders around the board table."
Clearly though, doing an MBA can be expensive, with courses costing anything up to £80,000. Not only that, they require a huge investment in time. On top of your day job, you could expect to do 15 or 20 hours per week of MBA work, as well as attending weekend classes or residential courses, so it's a major commitment.
Other higher education routes
There are other higher education routes open to HR professionals, not least the wide variety of courses offered by the CIPD, or the option of taking a Masters in HR Management. However, the consensus is that these courses tend to focus on the operational side of HR, whether that's organisational design, training or other HR-related disciplines, whereas an MBA will give a good grounding in finance, marketing and management.
The best option for you will depend on your career goals and personal interests. The modular nature of an MBA - most courses tend to include a foundation course in business that everyone must do, but you can tailor some aspects of the course to your or your organisation's needs - also means you can align it with a specialist area or upcoming project while still learning the foundations of effective business management.
When it comes to weighing up the cost of doing an MBA, Joe Li Puma, associate professor in strategic management at EMLYON business school in France, believes it is important to think of it as an "opportunity cost". "Most of our students are self-funding," he explains. "Some have done it from money they got from a compromise agreement, others have been sponsored, some have paid for it themselves. People say 'If I want to make my next move, move up through management, I need to invest in myself and do this degree'." Your employer may be able to contribute to the cost, or there may be flexible financing options available from your choice of business school.
Impact on earning potential
However you choose to finance it, it can have a positive impact on your earning potential. Helena Parry at Ochre House believes that global organisations in particular will fight for commercially-savvy HR talent. "There has been a demand from large international organisations to hire HR people with MBAs or Masters degrees for a number of years," she says. "Top pedigree HR professionals will have a Masters in OD or other specialist area or an MBA. The ones with real commercial awareness have also done a stint in the business before going back to HR."
The opportunity to network with others from outside the function is another selling point of an MBA. During the first week of the EMLYON programme, for example, students are thrown into a business "bootcamp" where they have to work together on a business simulation. "They have to learn very quickly the different terms, speak the language. Right then they can see connections, and we continue to build that understanding through the rest of the courses," says Li Puma. "The networking piece [of doing an MBA] is huge. More and more companies are spread geographically or companies building relationships with companies in other countries. The more you can do to help your understanding of cultures and practices, the better."
It might seem like the worst time to invest tens of thousands in a further qualification, but an MBA could make you a highly sought-after property.