Conventional wisdom says it takes money to make money. But it doesn't always require big sums to obtain the extra education that working professionals need to turbocharge their earning power.
That's because data suggest and experts agree that relatively affordable, well-targeted investments in education can often provide a larger-percentage boost in salary than even the priciest degrees. So "back to school" doesn't have to mean "back to the poorhouse" in pursuit of better pay.
Consider, for instance, the master's of business administration degree. Managers with MBAs from schools ranked in the Top 10, where the mean cost of tuition plus fees and expenses exceeds $198,000, receive a 12 percent average return on investment in terms of increased salary over their first 10 years as MBAs. Meanwhile, professionals who attend lower-ranked (and lower-priced) schools average an 18 percent average return on investment, according to a 2006 survey from the Graduate Management Admission Council (GMAC).
The good news continues: Many employees boost their salaries most effectively by mastering new "soft" skills, such as negotiating or earning trust, which don't require fancy degrees to learn, according to Mark Oldman, founder and president of Vault.com, a career-resource website. And for those who do need some new "hard" skills or technical know-how, institutions of higher education are rapidly rolling out new programs that deliver workplace acumen at a fraction of the cost of an MBA.
"Certification programs have proliferated amazingly over the past decade," says Randall Hansen, a marketing professor at Stetson University in Deland, Fla. and founder of Quintessial Careers, a career-development website (www.quintcareers.com). To a prospective employer, "a certification says, 'Hey, I'm not an old dog. I'm out there learning and being certified with the most cutting-edge skills in this industry,' " he says.
To give one's salary a jolt, the MBA still works. The GMAC survey found that graduates from the Top 10 schools raised their annual pay by 56 percent, or a mean amount of $34,500. Graduates from other programs outside the Top 10 saw their pay jump 54 percent, or $28,100.
But cheaper, less time-consuming alternatives are cropping up across the country. For example, Belmont University in Nashville, Tenn. has for the past three years offered a "Mini MBA," which after 14 nights in class confers a certificate in one area of managerial specialization (price: $2,495). Last year, Belmont launched a one-week leadership institute, which covers soft skills for executives and includes mentoring for one year (price: about $10,000).
"Companies will pay more for that [institute] than they'll pay toward the MBA," says Patrick Raines, dean of Belmont's Massey Graduate School of Business.
At the School of Management at the University of Texas at Dallas, prospective students choose from among eight MBA tracks (price range: about $20,000 to $65,000) and five master of science in management degrees that are more specialized or industry-specific.
Harvard University, where MBA tuition alone rings up about $80,000, last year launched a cheaper Master of Liberal Arts in Management through its Extension School (price: $19,500 plus fees). The Harvard Extension School program, which filled to its capacity of 140 students in its first year, attracts students with its relatively low price tag and its lax admission rules: no standardized tests or recommendations required.
Harvard Business School is "difficult to get into," says Delia Gerraughty, assistant director of the Extension School's management program. "We're really easy to get into."
But do non-MBA management programs send salaries skyward? It's hard to say with certainty because many programs are too new to have much track record, and salary survey data is scarce.
But Jackson, Wyo., executive coach Kevin Fleming says that developing skills that boost others' workplace productivity is often more important for the salary-boosting quest than the accumulation of particular letters behind a name.
"It's the leadership training. That's what people want to see," Mr. Fleming says. "Are you actively seeking advanced training in authentic leadership and emotional intelligence? That's tied to earning power [because] now you can rally people and generate creativity on levels that you couldn't do before."
Schools are also creating affordable options for professionals who need to ratchet up their cash flow but aren't necessarily cut out for management. Georgetown University's School of Continuing Studies, for instance, is this year launching a master's in professional studies degree with focus options in journalism, public relations, or corporate communications. Tuition costs $21,570, compared with more than $40,000 for a one-year master's degree in journalism from Columbia University.
And for the truly thrifty, outfits such as the Boston Center for Adult Education offer two-hour courses in areas intended to boost careers and pay levels. Its "Women's Business Breakfast" course, for instance, has covered networking in the past and will address "everyday negotiations" in October. Price: $25.
Doing professional education on the cheap may come with tradeoffs. Professionals who forgo an MBA., for instance, may sometimes wish they had one down the line.
Now "you might not need to do a whole lot of strategic thinking and strategic planning and global strategy on the marketing side," says Judy Olian, chair of the board at the Association to Advance Collegiate Schools of Business (AACSB). "But 10 years from now – after you've been promoted out of your technical expertise – you might need to do that, and, lo and behold, you've got that in the MBA degree."
But for people who already have technical expertise and yet struggle to develop strong working relationships, more technical know-how probably isn't what is needed most, according to Mr. Oldman. Complement hard skills with newly learned soft skills, he says, and "the world is your oyster."
"The great neglected career engine is people skills," Oldman says. In business as in politics, "Those who master the art of capturing human hearts are those who propel themselves the furthest."