With the Great Recession of 2007, the sense of vulnerability in the workforce continues to dominate. Today, with the student debt at $1.3 trillion dollars in the United States, investment in education is the single most important decision confronting millions of people.[1] The best path to advancing careers, building professional credentials, and enhancing job security is on the minds of many.
Today, prudent students and their families are examining closely the cost of education, potential job prospects after completing their studies, and the life time value. While not necessarily and strictly financial, economic performance is certainly one important factor. For young professionals pursuing an MBA and other advanced Master and Doctoral degrees, this calculation is intimately intertwined in their decision making. This decision-making is complicated by a growing trend for the past decade in which professional certifications are gaining prominence. For project managers, the question of MBA or PMP (and similar certifications) is hotly debated. Based on a recent interview, the goal of this article is to clarify and demystify some of the core questions in this debate.
Five questions:
- I am a college graduate with a few solid years of experience and I am looking to advance my career. I’ve been thinking about getting an MBA but recently someone showed me a recent salary survey by the Project Management Institute that showed project professionals with Project Management Professional or PMP certifications earn 22% more than non-credential holders. Can you speak to me about the cost differences and return on investment?
- Can you tell me more about time commitment?
- As a business school professor, CEO of a project management consulting and training company, and a working practitioner whom I believe has recently won an award for success in project delivery, you have strong credibility in all these arenas. Which do you recommend: MBA or other graduate degrees or a project management certification such as PMP?
- Tell me more about the project award that your team has recently won?
- PMO Advisory is also a training company. Tell me more about “training what you preach”?
Detailed Interview (with transcript)
1. I am a college graduate with a few solid years of experience and I am looking to advance my career. I’ve been thinking about getting an MBA but recently someone showed me a recent salary survey by the Project Management Institute that showed project professionals with Project Management Professional or PMP certifications earn 22% more than non-credential holders. Can you speak to me about the cost differences and return on investment?
This is a great question, and there is a national debate currently underway about the value and financial return of higher education. My views are nuanced as I am a college professor, a practitioner, and a trainer.
I would look at this question in two ways: strategic and financial. Let’s start with the simple question – financial. The cost and benefits analysis is fairly straightforward:
- Overall, the average total cost of North American programs (MBA) came in at $222,000 [2].
- The national average salary for those with an MBA working as marketing directors and chief financial officers was $118,654 and $128,201, respectively. [3].
- Hence with the MBA route you can expect to earn ‘half’ per year of what that MBA costs. So a simple analysis of payback period is roughly 2 years.
Contrasted with the PMP’s salary of $120,000, the median project professional with 5 to 10 years of experience. [4]. The cost of the certification is about $2,000 for exam fees, books, and training. The payback is 60 times. Thus, as a short-term decision based on financial, there is simply no comparison. PMP and certifications like it, outperform the MBA and other advanced degrees easily by 20 to 30 times.
Furthermore, the MBA and other graduate degrees take an average of two years while most project professionals can prepare and pass the exam in a quarter of that time or less.
But, and this is an important but – the MBA or other degreed program is much more than a singular topic and is surely beyond project management. To increase your capacity for learning, to reach toward your greatest potential, and to be truly extraordinary, not just in project management but also in other life’s endeavors, strategically, you must evaluate what’s best for you in a larger context. Good questions to consider: what makes you happy, how do you define success, where do you want to be in 3 – 5 – 10 – 20 – 30 years from now?
2. You mentioned time. Can you tell me more?
Even though there are accelerated MBA programs that enable students to complete it within a year, typical MBA programs require two years. This is true for other master’s degree programs.
For a project management certification, the requirement varies. Some require formal training, for example PMP requires 35 hours of training and CAPM (Certified Associate in Project Management – a more junior project management certification) requires 23 hours of training. Interestingly, the more senior certifications such as Program Management (PgMP) and Portfolio Management (PfMP) have no official training hours. But most practitioners spend a good few months and as long as a year to prepare for the examinations. Because time is perhaps the most important asset, PMI recommends professionals consider taking courses from their Registered Education Providers, who are vetted by PMI for rigor and quality.
From a practical perspective though, the differences in time are significant. MBA and other degrees require much more dedicated time attending class and participating in real time activities to maximize benefits. For busy professionals especially with a young family and especially for single parents, this is difficult to say the least.
For certifications, most boot camps are 3 to 4 days and many offer virtual delivery thus increasing flexibility. Also in the era where traveling is simply not fun, virtual instructor-led training provides an optimal balance between flexibility, quality, time commitment, and price.
3. Interesting. As a business school professor, CEO of a project management consulting and training company, and a working practitioner whom I believe has recently won an award for success in project delivery, you have strong credibility in all these arenas. Which do you recommend: MBA or other graduate degrees or a project management certification such as PMP?
There is no single right answer for everyone. It depends on an individual’s short and long term goals and objectives, current situations, and financial means.
For professionals who have time, financial means, and the desire to grow, I highly encourage pursuing an MBA and other degreed programs. This will take more time, more money, and more risk but the reward of gaining additional knowledge and increasing your capability is attractive.
On the other hand, for professionals who:
- Already have an MBA or graduate degree
- Are very busy professionally or personally (such as having young children)
- Are seeking ways to achieve greater competitiveness quickly and with less risk
Then considering a PMP or another professional certification can be very attractive given the lower cost, shorter time, and much higher payback that we discussed earlier.
There is one additional consideration. From my experience leading a large project management office in my last job as the global director of one of the Big 4 Accounting firms and my current role as the CEO of a consulting company, I see most hiring organizations viewing professional certifications such as PMP, as a more objective representation of a person’s capability and competency than degrees, unless the degrees are from schools that they are familiar with. This has practical implications. Since no two MBA programs are alike, the school matters. According to Wikipedia [5], there are 384 MBA programs in the US. Frankly, most people probably can name 10 to 20 schools or just 5% of the schools. Thus, unless they know and appreciate the specific school, the rest are unfamiliar. PMP and other certifications are different; they are accredited by a single body – the Project Management Institute, and the project management standard is recognized by the American National Standards Institute (ANSI). In a sense, PMP is more akin to the SAT or ACT or medical board examinations.
This is one reason why the PMP commands a 22% salary increase in the United States. By the way, in South Africa, the salary premium is much more – at 47%.
4. Wow, those are really impressive numbers. You skipped a question – tell me more about the project award that your team has recently won?
Thanks for the reminder. As you know, PMO Advisory is a consulting and training company. Thus, we preach and teach what we actually do. My firm specializes in strategy implementation and what we call “Right Size” Project Management. “Right Size” refers to finding the best optimal set of processes and tools to deliver value.
In 2015, my team managed the rollout of an enterprise learning management system at Montclair State University, the second largest university in New Jersey with over 20,000 students. In this 18 month project, the biggest challenge was stakeholder management and the biggest risk was the simultaneously turning on of the new system and turning off of the old system. Thus, there was no overlap. We had a fabulous project team, and the project was very successful utilizing the principles of “Right Size” project management. The PMI-New Jersey chapter awarded us “honorable mention” in 2015; we lost to the New Jersey Turnpike Authority whose project budget was about 1,000 times larger. Thus, while we came in second, it was a true honor.
5. PMO Advisory is also a training company. Tell me more about “training what you preach”?
PMO Advisory is not just another consulting and training company. We are a PMI Global Registered Education Provider, and we are one of the very few firms in the world offering portfolio, program, project, agile, and risk management training. In fact, we believe we are the first to offer PMI’s Portfolio Management Professional (PfMP) training since May 2014. We are also likely to be one of the most focused on project management as a firm.
Working with our content partners and developing courses in- house, we offer training in six of the eight PMI certifications, plus SCRUM, PRINCE2, MSP, and other related disciplines such as ITIL and CBAP (Business Analysis).
Our trainers are highly experienced professionals, not only holding the certification in which they teach but also practitioners and sometimes college professors. Our goal is not only to pass the test but also to learn how to apply the tools, processes and best practices. We deliver training at our client sites, in traditional classrooms, and virtually in real time by our expert trainers.
Our training methodology so far has achieved an unimaginable success rate of 100% for portfolio and program management. This is because we built our own test banks, not only based on the latest standards but also based on what works in the field. Thus, our tests are an excellent proxy of actual competency. Now, we realize we will not be able to maintain 100% forever, but we are trying hard to maintain an extraordinarily high first time pass rate.
If I may, I also want to insert a plug for my school – Montclair State University. There, as an Assistant Professor in the Management Department, I am leading the new Graduate Project Management Certificate program. We are already embedding real projects into our classrooms.
Ultimately, whether I am a professor or the CEO of my company, the prime objective is the same – help our students and project professionals to be more successful, not only passing the exam but also establishing a career long relationship. As one of the few companies that offer the entry-level CAPM training to the most senior-level Portfolio Management training, I hope the market will view us as a “one-stop shop” for all project management training.
Click here to listen to the interview on the Entrepreneur Podcast Network with Eric Dye.
About the Author:
Prof. Te Wu (PfMP, PgMP, PMP, and PMI-RMP) is a college professor and the CEO of PMO Advisory, a consulting and training firm. The firm is a global PMI Registered Education Provider (R.E.P.) and an aspiring B Corp with a strong social mission. It provides more comprehensive project management certification training (including Portfolio Management – PfMP, Program Management – PgMP, Project Management – PMP & CAPM, Project Risk Management – PMI-RMP, Agile Certified Practitioner – PMI-ACP, PRINCE2, MSP and other professional certifications (such as ITIL, COBIT, Marketing and Sales) than any other firm in the metro New York area. It also offers over 20+ free resources. As a professor, his focus is on project management, teaching at leading institutions such as Stevens Institute of Technology, Touro Graduate School of Business, Montclair State University and soon at New York University. Prof. Wu is an avid volunteer with PMI-NYC, PMI-NJ, and PMI-Global, where he is currently serving as a core member of the Portfolio Management Standards Committee, writing the next edition of the Standard for Portfolio Management.
To request his free book (available in April 2016) and other free resources from his company, complete this form at www.pmoadvisory.com/free-resources. The print and Kindle versions are available on Amazon.com.
References:
- http://www.marketwatch.com/story/every-second-americans-get-buried-under-another-3055-in-student-loan-debt-2015-06-10
- Schmitt, J., 2016, “How much does an MBA really cost?”, Poets & Quants, February 20, 2016, http://poetsandquants.com/2016/02/20/how-much-does-an-mba-really-cost/
- Hoppock, D.J., 2016, “What is the average salary for an MBA graduate?”, Investopedia, updated on March 3, 2016, http://www.investopedia.com/articles/personal-finance/031215/what-average-salary-mba-graduate.asp#ixzz42gqZGXS8
- Project Management Institute, 2015, “Earning power: Project management salary survey, Ninth Edition”, page 12, https://www.pmi.org/~/media/PDF/learning/project-management-salary-survey-2015.ashx
- List of Business Schools in the United States, Wikipedia, https://en.wikipedia.org/wiki/List_of_business_schools_in_the_United_States