Limited degree of market value

The salary advantage of a postgraduate qualification is shrinking, Philip Schofield reports
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The Independent Online
LAST year almost 20,000 newly qualified graduates, one in every eight, went on to further academic study. Another 19,000 entered postgraduate teacher or other professional training. Most stayed on to earn a specific vocational qualification, to pursue an interest, or to improve their job prospects. However, some did so to delay the dive into the icy waters of the job market.

Some careers, such as law, teaching and social work, require post-graduate qualifications. A Ph D is usually needed to teach in higher education or work in research and development. Some science and technology posts need the specialist knowledge provided by a relevant master's degree course. However, do employers recruiting outside these specialist areas see a postgraduate degree as more valuable than a first degree?

A study by the Institute of Employment Studies for the then Department of Employment, entitled The Labour Market for Postgraduates, says many postgraduates enter jobs where their qualifications are neither relevant nor desirable. There is a considerable overlap between the first degree and post-graduate employment markets, and many postgraduates enter jobs similar to those of first-degree graduates. There is little specific demand for postgraduates, especially Ph Ds, outside the higher education sector and research organisations. The study says: "In industry and commerce the majority of postgraduates are recruited as part of companies' mainstream graduate recruitment programmes, where personal characteristics and evidence of relevant work experience are important selection criteria."

Kate Orebi Gann, chairman of the Association of Graduate Recruiters and recruitment manager of Marks & Spencer, echoes these findings. This year M&S has had several applications from Ph Ds who were either in an area of work that they decided they did not want to pursue, or in an area where they wanted to carry on with their research but had been forced to seek more general employment because funding had run out.

Ms Gann says this raises three problems that Ph Ds need to consider. First, "They don't necessarily have the motivation that one looks for," as recruiters want candidates who can convince them that "this is a job I want to do," rather than, "I can't do what I really want, therefore I'm having to do this". The second problem is one of timing. "If they apply for jobs before they complete their thesis, and the employer says, 'We want you to start next month', they have a problem. Sadly, some never finish their thesis and never get their qualification."

Finally, she says, "the research methodology can almost become an overiding factor. You have people with 'analysis paralysis', constantly wanting to gather more and more information. The commercial world doesn't allow the timescales to do that.They have to be decisive and be able to take a view on incomplete data."

On taught masters' degrees, she says: "Most employers treat them as first- degree graduates. In many cases they've done a three-year degree, and to do another year only brings them to the same age and experience as someone who's done a sandwich course or a Scottish degree. What more does it add to their value - unless it has been in a subject which adds to their commercial awareness or their understanding of the particular area of work they wish to enter?"

These views are reflected in salary levels. Each year a survey of graduate salaries and vacancies is conducted by the Institute for the Association of Graduate Recruiters. Last year more than a third of the 282 employers in the survey made distinctions in the starting salaries they paid to different types of graduate. However, differentials paid to postgraduates are shrinking.

The survey found the median salary paid last year to a 21-year-old with a second-class degree was pounds 13,500. It reports: "The highest supplements were associated with Ph Ds (a median of pounds 2,189) although it should be noted that this distribution was skewed by the effect of a few financial organisations paying exceptionally high salaries to Ph Ds." Even so, in real terms this is still lower than the differential of pounds 2,175 paid to Ph Ds in 1992 on a median salary of pounds 12,800.

An M Sc or MA last year was worth an extra pounds 501, down on the supplement of pounds 700 paid in 1993 and the pounds 724 paid in 1992.

Unless a higher degree is vocationally related to the position being filled, it is usually ignored. Indeed, some recruiters suggest that a non-vocational higher degree can be a handicap to recruitment.

A joint statement by the association, as well as the Association of Graduate Careers Advisory Services and the Central Services Unit, issued last year, warned: "A postgraduate qualification is not always a benefit when seeking employment. Unless the qualification is relevant to the job it is unlikely to give any advantage in terms of selection or salary."

The institute's postgraduate study also concluded: "There is little evidence of clear benefits of postgraduate study to individuals in terms of career progress or financial rewards."

Even in organisations that pay a differential, postgraduate entrants are paid less than their contemporaries who entered earlier with a first degree. The PA Consulting Group's 1994/95 Survey of Graduate Salaries and Recruitment Trends shows that BA/B Sc graduates with only an "average" level of performance earn a median basic salary of pounds 14,912 after a year's service. Their contemporaries, who defer entry by a year to take a master's degree, start on a median of pounds 14,610.

New Ph D entrants start on a median of pounds 16,000 - significantly less than contemporaries who joined three years before with a BA or B Sc and who, for "average" performance, will be on a median salary of pounds 18,000.

Whatever the opinion of employers, the value of postgraduate study to the individual is incalculable. For many the pursuit of knowledge and understanding is ample justification and reward.

It is also likely that postgraduates contribute more to the economy than is readily measurable. There are few management, professional and technical posts that do not involve high levels of data-gathering and analysis and of problem-solving. Employers may reasonably expect postgraduate employees to bring greater intellectual rigour to this work and, therefore, greater quality.