Have you wondered whether earning a PhD would improve your lot?

Mid-to Advanced career professionals often ask me if i think a PhD would be worth it for them.  When they say "worth it," they typically have two specific questions in mind:

• Will having a PhD confer me more credibility and ability to move up in the workplace?
• Will having trailing letters will result in a bigger salary?

The literal, simplistic answer is, "Yes, more credibility and 17K/year according to Sauro's analysis of the recent UPA Salary Survey."

But, the real answer is probably no. Earning a PhD requires two things:

1. The keen desire to spend roughly a decade thinking about ONE well-defined problem
2. An enthusiasm to spend roughly a decade poor

For now we will just assume you lay awake at night thinking about your would-be thesis topic--that you have #1 covered. Let's focus on the financial argument for getting a PhD... or not.

In his blog, Sauro presents a cost analysis for getting a PhD in the Usability field. His calculation is (as is typical for Jeff) thoughtful and thorough. On his analysis, a PhD costs 265K. But--and this is an important but if you are a mid-career professional considering a PhD--his calculation assumes:

1. that you will start your PhD directly out of your undergraduate degree.
2. You finish in 5 years. (He probably did. He is that smart.)

Let's do the numbers for a mid-career professional

Typically the people who ask me whether to get a PhD are not students finishing their BA. They are successful, mid-career people. They are managers with about 10 years of experience.  Their opportunity cost will be a bit higher. To compute it we need to know how much they earn and how long it will take to earn a degree.

How much do you earn now?
The 2009 UPA Salary Survey indicates that UX salaries are predicted by experience, managerial status and terminal degree. The base formula is:

Annual UX Professional salary= $52,484 + $2,941 (Years of Experience) + $11,108 (if Manager) + $16,880(if PhD)

Therefore, a manager with 10 years experience should be earning about 93K. ($52,484+10*$2,941+$11,108 = $93,002) 

 
How long will it take to get a degree?
According to the National Science Foundation,  people conferred degrees 2008 spent ~7 years earning them. If you are really thinking about pursuing a PhD, it is important to note that not everyone who matriculates into a program finishes. The 2008 Council of Graduate Schools Report suggest that, even after 10 years, more than 30% of candidates never complete. For what its worth, women and foreign students tend to complete more often men and domestic students, respectively.

Now we can do the math for a mid-career professional: 93K/year x 7 years to complete.

The opportunity cost of a PhD for a mid-career manager is ~$651,000.

In fact, Sauro suggests that even if you start your PhD as soon as you finish your BA/BA, and that you earn 17K/year more because of it, in purely financial terms the degree doesn't mean that much over the course of a career.  Afterall, in the 5 years you spend studying, you would have gained about $15K/ year in salary through raises. Over the course of their careers, PhDs just don't earn THAT much more. Getting a PhD can't really be about the money.

So let's go back to the original questions:

1. Will having a PhD confer me more credibility and ability to move up in the workplace?

Yes, but the way credibility works in academia and the way it works in industry are different. And, if you go (back) into industry you will have to (re-)learn how to navigate those soft skills, along with a lot of other habits.

2. Will having trailing letters will result in a bigger salary?

Yes, in absolute terms. But think of it this way: If you start your PhD program after 10 years in the industry, it will cost 650K. All other things being ignored, if your salary with a PhD goes up by 17K/year, it will take roughly 32 years to recover the opportunity cost of earning your degree. If you start at 35 years and it takes 7 years to complete, you will re-enter the work force at 42. You will need to work until you are 74 to recover the investment. And you will have lost significant momentum on your career trajectory.

Unless of course your real plan is to change trajectories and enter academia. (There is a different reality check here.)

There are people who will feel OK about not really recovering the cost. These people, for various reasons, couldn't start straight out of school. But they have spent their lives they fantasizing about going back. For them, its not about the cost. Its about the experience. And the work. Those people should go for it.

But most people shouldn't. Typically when people ask me if they should get a PhD, I say "No. If you are calculating the ROI of a PhD .... If you haven't thrown fiscal caution to the wind and pursued the degree out of a pure intrinsic curiosity ... its likely that you won't finish." It not about being smart enough, necessarily. It has more to do with responsibilities, momentum and other pressures of adult life. Those realities explain why 30+% of PhD candidates end up ABD (All But Dissertation). At some point during their studies, they become 'grownups.' And the priorities necessarily change.

Actually, most of the people I say this to are visibly relieved. But a few feel compelled to press on. For them, I recommend an MBA. MBA programs converge at the interesction between rigorous theory and the reality of practice in business contexts.  Think about it this way: Every PhD practitioner I know has been accused of being "too theoretical," "unrealistic," "not practical enough." That's a fair accusation. Its what happen when you spend 7 years thinking about one problem in an ivory tower.

In contrast, MBA programs are business-oriented. MBA curricula recognize the importance of real world contexts. MBAs students practice developing the business cases. (I challenge you to find an academic PhD who needed to make a business case for why their thesis should be done.)  They teach you how to make the business case.

MBA programs are more practical at the life level, too. Whereas most PhD programs are designed assuming full time commitment (end of story), many MBA programs are designed with part time students in mind. They are rigorous and demanding. But the schedules are more amenable to grownups with real lives and real responsibilities. You don't have to quit your job to suceed. And if you continue working, you lose less career visibility and momentum. Some organizations evey pay tuition.

So given the numbers we have, it seems like a MBA might be a better approach. But we won't know for sure until Sauro tells us the differentiated value of an MA / MBA.

References:

1. Table: National Science Foundation, US PhD Program Completion Time x Discipline
2. Report: Council of Graduate Schools Report on PhD Completion and Attrition
3. Blog: Jeff Sauro's analysis of the the value of a PHD in the UX industry
4. Download: The 2009 UPA Salary Survey