You know very well what a graduate degree is going to do for you: differentiate you from those with bachelor's degrees, demonstrate your deep commitment to a particular area, hone your expertise, and perhaps even give you a year out to dodge the recession.But it's a lot of money to spend on something that, when all is said and done, will end up as a line or two on your CV, and it should be obvious by now that employers do not run general Masters entry schemes. Companies and public sector organizations will do graduate recruitment, MBA recruitment, experience-hire, and occasionally, post-doctoral entry for those with very high-value technical skills. But you don't see the words, "People without a master's degree need not apply."
Employer perspective
Talk to individual employers and it sounds even more doom and gloom. Hannah Slaney is graduate programme manager at the UK's mutually-owned financial and retail conglomerate, the Co-operative Group. "I have had people come up to me at careers fairs who ask what opportunities I have for people with graduate degrees," she says. "Unfortunately I can only point them to the graduate recruitment program (which is for anyone with a bachelor's degree and above). Almost no organizations have specific Masters entry schemes and graduates are not paid more because they are better qualified."
Sej Butler is recruitment manager for IBM in Europe (see case study). "The key element that distinguishes between graduate entry and whether someone joins IBM as an experienced hire following a master's degree is the length and relevance of their work experience," he says. "If you have an undergraduate degree and have gone straight into a Masters, then you will likely be treated as a graduate entrant. Even if you have one or two years of work experience before the Masters, it might still not be enough to move you out of a graduate entry position.
"The only exception would be if the master's degree was in a precise subject area which exactly matches what we are looking for at the time, or if the one or two years of experience was with one of our direct competitors or involved a relevant industry skill. These factors might push a candidate out of the graduate-entry category and allow someone to enter at the same level as someone with a couple of years' experience in IBM."
"MBA or Masters graduates apply, but more so those with bachelor's degrees," said a senior manager in an international IT services firm, quoted in a UK report ‘Talent Fishing: What Businesses Want from Postgraduates'.
"We don't see any difference in what they do in the company generally speaking. They are paid the same, there is no direct correlation seen in degree and performance, but there is a slight difference in maturity, and they can handle the ups and downs of business life better."
It is not all doom and gloom, however. Look deeper into the report and it seems employers do see more in master's holders than simply an extra year or two's maturity (that an extra year or so of life should really have given you anyway). The ‘Talent Fishing' survey is published by the UK's CIHE (Council for Industry and Higher Education) and is of course UK-only. However, UK graduate education is second only to the US in the world, and many of the senior managers and HR directors in the 56 businesses surveyed were global recruiters.
When asked what qualities they value about employees with graduate degrees, nine out of ten of these employers who recruited master's holders liked their analytical thinking and problem-solving skills. Eight out of ten liked their subject-specific knowledge, their research or technical skills, while the same proportion also liked the new ideas and innovative attitudes they brought with them. However, only about half liked their maturity and thought they had future leadership potential, while just three out of ten thought a master's degree guaranteed them high-calibre candidates.
Employers do realise they are getting something extra when they recruit people with master's degrees. And, given that it is the student who pays the cost, why wouldn't they be happy? But is there any evidence that they put their money where their mouth is and pay master's holders more?
In fact, despite the protestations of employers that they treat graduate degrees no differently than bachelor degrees, there is plenty of evidence that master's holders do get paid more. The winter 2008 survey of employers conducted by the UK's Association of Graduate Recruiters found that those employers who were prepared to pay a premium would pay master's holders around £3,508 more than the bachelor degree average of £24,000 (figures which exclude those with MBAs).
What's more, in an article entitled ‘The economic contributions of PhDs' published in ‘The Journal of Higher Education Policy and Management', Bernard Casey argues that there is a significant graduate and indeed Masters premium on lifetime earnings.
"The most up-to-date estimates of the premium associated with university study in the UK indicate that, on average, it is positive and substantial," he says. "Male holders of a bachelor's degree enjoy an earning level that is over 20% higher than men who could have studied but chose not to, while women who studied earn over 35% more than an equivalent comparator. Moreover, studying further brings further returns. Men with a master's degree can earn 29% more than the base; women with a master's 55% more."
It is important to remember that these figures are over a liftime and will include MBAs and other professional qualifications. Nevertheless it is clear that over the long-term, and when you average out the salaries of large numbers of people, there are significant economic benefits to getting a master's degree. Employers do value them and they do pay master's holders more.
At the level of an individual graduate employer however, the additional benefits of employing a master's holder over someone with only a bachelor's degree aren't necessarily going to be evident. It is very important therefore to try to see the world as employers do.
Graduate abilities
Employers don't have any formal way of recognizing in their recruitment strategies the value that a master's qualification brings. In an employers' mind someone with a graduate degree is a university graduate first and foremost. It might therefore be better to think of yourself not as a master's holder with an entitlement to better career prospects and salary, but as a "graduate-plus": better skills, more maturity, a more focused sense of your career goals and greater cutting-edge knowledge. Sell yourself this way and you might confound the protestations of even those employers who claim they won't pay your more.
"We do sometimes get a negative response from employers at careers fairs who feel some graduates present themselves with a sense of entitlement because they have done a master's degree," says Elizabeth Wilkinson, head of postgraduate career development at the University of Manchester Careers Service in the UK.
"So if your first instinct when you approach an employer is to ask them what they do for master's holders, whether they have Masters level vacancies, or if they pay a higher salary, you might want to think again. You would be better off presenting yourself as a university graduate who has lots of extra abilities on top of a bachelor degree."
Case study. Focus on IBM
IBM recruits significant numbers of graduates throughout the world and is currently investing its largest hiring efforts in its growth markets of India, China, Asia Pacific, Latin America, Eastern Europe and sub-Saharan Africa. However, it continues to recruit large numbers in the major markets of Europe, USA, Canada, Japan etc.
Some of these hires are into general entry positions such as consulting, technology, sales, and software, but the company also recruits into specialist areas such as research and development, and its support organizations.
While PhD or MBA holders with experience can enter into mid-level jobs which require specialist knowledge, master's or bachelor's degree holders are most likely to start on a two-year foundation program in a business unit while retaining close links to the company's graduate community for their training and development.
Sej Butler, IBM's European recruitment manager, talks to David Williams:
- Do you think there is an advantage to having a master's degree?
On top of this, it means that at interview he or she will be likely to be able to demonstrate a higher level of engagement with the area than someone who only has an undergraduate degree and who has done a little bit of research on the web.
Let's look at two extremes. You can take someone who comes in through graduate entry with a history degree and compare them to someone who had done a three-year computer studies degree with a year out in industry, perhaps even with IBM, and who now has a master's in software development methodology. Regardless of these profound differences in qualification, these two people would go through the same training in their first two years.
For these entry-level junior consulting or technical roles, we want to teach people how we at IBM manage our projects and conduct our development-testing analysis. In these two years they will be rotated round a number of different assignments. This gives them a chance to find out what kinds of roles really suit them, and what kind of clients and industry they prefer. This is then followed by two years or so working in a regular business area where training is related to the areas that they may ultimately want to develop into. In this way a history bachelor's holder and an IT master's holder can end up working in identical roles or effectively swapping specialisms.
Generally, I would say that between 10-20% of all our candidates have some kind of higher academic qualification beyond a bachelor's degree. The doctoral entrants are quite a small percentage of course, while in the middle are groups such as people with various types of master's in finance or in analytical areas such as operational research, IT or computer studies. The biggest proportion of our master's hires are MBAs.
- What trends have you noticed when it comes to Masters level recruitment?
I am not sure if this is about people wanting to gain higher-level skills before they start applying for work and thinking perhaps that it might give them a competitive edge or a better starting salary. It could of course also be a sign that people have seen how tough the graduate employment market is and decided to sit it out for a year while demonstrating their commitment to their career choice.
I think it is possible that there is both a long-term trend toward distinguishing oneself from the mass of graduates and a short-term trend related to the downturn.
Nevertheless, the majority of our applicants to graduate positions still only have a first degree.
