business finance major salary

business finance major salary

Exploring the Impact of Majoring in Business Finance on Salary Potential

1. Introduction to Business Finance Major

Previous research has also shown that business school students’ median starting salaries may vary on the basis of their major. In particular, the highest median starting salaries tend to be earned by students majoring in business finance. Such research echoes suggestions made by educators and corporate recruiters, who posit that the field of finance offers “highly desirable employment opportunities” and is “well-suited for students interested in high-payoff careers.” Why do business finance majors receive the highest median salaries? For decades, scholars have shown that finance majors “dominate the upper echelons of business.” Finance majors have higher average lifetime cumulative earnings compared to other business and non-business majors.

Selecting a college major is one of the most important choices that college students face. After all, the college-to-workforce conduit stems from the knowledge students acquire, the contacts students make, and the signal students send to employers. For more than a decade, scholars and practitioners have pointed out that one of the main reasons students choose to major in business (thus becoming business school graduates) is the link that exists between majoring in business and future financial rewards, such as salary increases, stable income, and job security. Interestingly, previous studies have shown that business students show an increased interest in weekdays, in wining and dining in luxury places, and in conforming to the expectations of others.

2. Factors Affecting Salary Potential in Business Finance

In a direct honors thesis relationship between hours of study and future earnings, business students who are indifferent between competing undergraduate business majors should select courses to receive the required bachelor’s degree in the shortest amount of time. This way, they are able to shift focus, study longer, earn higher grades, and thus defer enrollments in an M.B.A. or other graduate program after graduation. The labor market for college graduates is most favorable towards career services that allow alumni to find well-paying jobs within a relatively short commuting distance from an acceptable place to reside. There are reasons to undertake investment of time and resources with increased future payback from local, state, and national corporate employers that reward employees for their ability to utilize the skills and knowledge gained from an undergraduate degree in business finance.

The preferred major variable of interest is campus students’ choice of business finance (BFIN). If the labor market is favorable towards the more general category of majoring in finance (FIN), students seeking the larger selection of finance job opportunities should prefer business finance to business marketing (BMKT), business management (BMGT), business management information systems (BISY), or business undecided/undeclared in order of increased focus on finance and decreased focus on ease of future employment. With the focus on courses necessary for graduation and current student abilities, the labor market will be more favorable towards an increase in wage premiums among graduates majoring in BFIN.

3. Industry Trends and Salary Benchmarks

This study takes advantage of an extensive employer survey to directly measure technical skills and technical human capital accumulation. Industries and professions with high initial compensation and wage growth are attracting business finance degree graduates from leading financial services firms. The position breakdown (by percentage) of elite university business finance and non-elite university business finance candidates in the financial services industry is significantly different. Elite Business Finance Undergraduate Graduates tend to choose Elite Financial institutions. A student from an elite university is more likely to find an elite executive position after graduating from the elite business college. Because organization performance determines employee pay, elite business colleges emphasize career education. This encroaches upon the time needed to exhibit the typical political, teaching, and research behavior associated in business colleges with career success. As a result, employee pay is inflated. Elite colleges and universities have become a source of social stratification. With such an emphasis on financial performance and the salaries of the associated employees, performance incentives and pay inequality have enriched the top talent.

As employees gain tenure and job skills increase, salary advancement is a natural progression. What is the actual entry-level salary for professionals with a business finance degree from elite and non-elite universities? We used four self-created salary scales: the elite scale, composed of executive compensation factors ranked by Forbes and provided by the Chinese market economy and management research institute; the American investment bank salaries; the Li and Zhao’s 2015 financial salaries; and the American financial quantitative analysts. We conclude that the findings are both enlightening and constructive for current and prospective business finance students at both elite and non-elite universities. These findings suggest that the elite university business finance graduates earn an income capital advantage over non-elite university graduates when they obtain their first job. The job market salary difference between candidates entering investment banking and financial consulting at leading financial services firms is apparent.

4. Strategies for Maximizing Salary as a Business Finance Major

The Department of Business Administration at Waynesburg College encourages students to attend professional lectures, workshops, and student division meetings sponsored by the Pittsburgh Society of Financial Analysts, Pittsburgh Estate Planning Council, the Institute of Management Accountants, Pittsburgh Campbell & Company, Inc., and the Pittsburgh Chapter of the American Society of Women Accountants. Attending these activities may give a graduate the edge over his/her fired while job seeking. Internships, co-op programs, and work experiences in the area can lead to job offers with higher salaries and benefits as they supply employers with evidence of past job commitment and performance. Jobs are limited and competitive. Students cannot rely on “luck” for job opportunities to occur. The students must learn to develop good preparation to help them learn how to make the career opportunities happen.

Graduates earning higher starting salaries engage in placement clubs, workshops on interviewing, résumé writing, and job-searching skills, and career counseling services. High-paying jobs may be from the following sources: career centers and placement centers, job shadowing programs, professional association career links and career fairs, and the availability of an internship program. Promoting internship programs with employers may increase the number of students earning business finance degrees. argued that students clocking work experiences prior to graduation accept job offers with higher salaries. Assigning class projects from real world job requirements increases the pupils’ general awareness and preparedness for job choices.

5. Conclusion and Future Outlook

Given these results, it is interesting to ask if recent debates over the potential value of college stem all the way back to the decision on what to major in. As we discussed in the introduction, recent discussions on the value of the large majority of undergraduate degrees have focused on the overall cost of obtaining a college degree versus the total potential benefits. When we examine the value of the college major variable on salary, we discover that the gap in salaries across business majors completely disappears. Depending on the model specifications, business majors (business marketing, business management, accounting, and other business) now receive salaries no different from the comparison category of all combinations of non-science, non-engineering, and non-business majors.

Research highlights the significant impact that a college major in business finance can have on an individual’s future earning potential. This work is especially insightful for students currently exploring a college major in business finance. While many other factors play a role in actual salary outcomes, the potential offered by a finance degree, particularly early in a personal career, can be quite substantial. It is also key for current finance students to consistently work on improving the job skills that are most valued in finance jobs. Of course, those already well beyond the undergraduate phase of their careers can also utilize our findings to better understand the impact that their degree has had, and hopefully it helps to provide a return that makes their time and personal investment all the more worthwhile.