There are less entry level jobs to go around and the changing world of work has heightened the demand for an agile skillset. So should organisations still be relying on candidates with graduate degrees?
Given career paths are becoming increasingly non-linear and organisations are looking for more than a high GPA average from their graduates, for those who believe an undergraduate degree is the golden ticket to a six-figure salary, I say: think again.
Organisations are shifting away from assessing graduate talent based on what university they attended and their certification results. Nowadays, candidates are screened through psychometric testing and gamification to assess for culture fit, alignment, resilience, EQ and coachability – things that aren’t traditionally taught at university.
It’s not just about what you know, it’s how you apply it; recruitment is becoming more and more about aptitude and competency-based hiring. Given the rapid speed of disruption occurring in business and the workforce, it’s increasingly important to hire someone who can adapt and evolve with an organisation.
Businesses are starting to plan for “new” roles. Those are roles that the business will need in the future to stay competitive, to innovate and lead. Roles which aren’t necessarily known yet, or don’t have established university curricula supporting them.
All the potential or soft skills in the world won’t help graduates if there are no jobs. Given the full-time employment rate for undergraduates has dropped an enormous 13.4 per cent since 2008, we must ask ourselves if there are simply less graduate roles to go around.
While medical and physiotherapy graduates still have exceptional rates of early employment (ranging between 85 to 95 per cent) the less vocationally-oriented degrees are seeing serious decline. In 2017 Creative Arts, Science and Mathematics, Communications, and Psychology students all experienced sub-60 per cent full-time employment rates. Which for the minimum three-year commitment and enormous cost, looks much too low.
Obviously, higher education comes with other benefits like extracurricular activities and exposure to diverse people and ways of thinking. However, these are usually seen as incidental to the process of acquiring a certified piece of paper, rather than the reason for studying.
Is postgraduate study the answer?
Trend data suggests employers increasingly favour those with postgraduate degrees. For example, those who complete an MBA have benefited from year-on-year increases in employability measures since the GFC. In 2009, half of surveyed employers hired MBA graduates; by 2017 this figure is projected to have jumped by as much as 46 per cent.
The starting salaries of MBA holders are also markedly higher than other tertiary degree holders, averaging around $103,553. Paired with the increased employment opportunity, the value of an MBA as a tertiary study option now appears to have overtaken traditional university study.
Unfortunately, the same cannot be said for other forms of postgraduate study. Many 25-30 year olds are completing additional degrees in the hopes of gaining employment, rather than securing a bigger pay cheque. However, instead of being a deep dive into a specialist area, postgraduate study is often used to pivot careers, potentially supporting the non-linear career paths people are now pursuing. In any case, on average, further study does increase the likelihood of employment, with postgraduates’ full-time employment rates at 86 per cent in 2017.
Is university for everyone?
The labour market can be a tough place for Australians entering the workforce. Given that, it’s here that I think we need to question common wisdom; is higher education the best way to secure a job? For many, the answer is yes, with 71.8 per cent of those completing a graduate degree finding full-time employment four months after completing their degree. For others, the answer might not be as clear-cut. Some graduates will ultimately end up choosing a vocation that does not require university study, like becoming a personal trainer or beautician and many may end up working in a field unrelated to their studies.
Personally, I studied an MBA for the boost I knew it would give my career. However, postgraduate study to supercharge your current trajectory is a different ball game to conducting further study to secure an entry-level role. As pathways to employment become more decentralised, there’s an increasing need to support the development of soft skills such as communication, creative thinking, teamwork and flexibility as well as guide school-leavers, graduates and postgraduates into appropriate avenues to gain vocational and academic experience that will best meet their needs, as well as the needs of Australia’s labour force.
Kelly Quirk is group managing director and chief executive officer at Harrier Human Capital.