Higher-education achievements continue to play a decisive role in setting UK workers’ salaries, according to new government figures.

As the BBC reported on 26 April, [1] the Department of Education stats [2] show that non-graduates typically earn £21,000 per year, while graduates receive £25,500 – and post-graduates benefit from a premium that pushes their annual wages to £30,000.

However, the data also exposed a series of gaps – for example, young white graduates earn an average of £26,000, while their black colleagues earn £4000 less. Plus, female graduates up to the age of 30 average out at £24,500 per year – £3,500 less than their male counterparts – and London graduates’ average annual salary of £30,000 exceeds that of North Eastern degree holders by £9,000.

In a statement, universities minister Chris Skidmore said: “We have record rates of 18-year-olds in England going into higher education, so I am delighted to see that there continues to be a graduate premium and students are going on to reap the rewards of their degrees. However, this Government is clear that all graduates, no matter their gender, race or background, should be benefitting from our world-class universities and there is clearly much further to go to improve the race and gender pay gap.”

He noted: “We have introduced a range of reforms in higher education which have a relentless focus on levelling the playing field, so that everyone with the talent and potential can not only go to university, but flourishes there, and has the best possible chance of a successful career.” [3]

While those measures are welcome, is it right that degrees continue to have such a huge influence on salaries, at a time when employers are abandoning degree requirements for entry-level positions?

Auditor EY scrapped its degree stipulation for recruits in 2015, [4] with UK publisher Penguin Random House taking the same step the following year. [5] Tech giants Google, Apple and IBM no longer require college degrees, [6] and the list of other firms that have adopted this strategy is growing all the time. [7]

Indeed, in October last year, EY went even further – scrapping the one-to-one final interview in favour of an ‘assessment event’ designed to provide candidates with greater scope for expressing themselves in practical settings. [8]

What do those efforts to establish more open recruitment practices mean for the role of degrees and Masters courses in setting the tone for people’s careers?

The Institute of Leadership & Management head of research, policy and standards Kate Cooper says: “With the focus we’ve seen in recent years on graduate destinations, employability being hardwired into curricula and the rise in vocational qualifications, we’re losing sight of the benefits that can flow from degrees that have nothing immediately to do with people’s chosen vocations. The most important gift to take away from a degree is the ability to think critically about any particular body of evidence with which you’ve been presented.

“Other valuable benefits include the ability to put forward an argument, the skill to research in a robust, rigorous fashion a corpus of material, and the opportunity to gain insights into how we create knowledge. All of those things are essential to organisations, regardless of the function or discipline in which the candidate’s course was situated.”

Cooper notes: “Another, major part of the equation is how degrees impart critical life skills. They should enable us to make more informed political judgments, and wiser decisions about how we allocate resources.  We also know that the greater the slice of a country’s population goes through higher-education courses, the more prosperous it tends to be. So with all of that in mind, I cannot understand how all these companies are making a virtue out of not wanting their prospective employees to have degrees.”

She explains: “It has often been the case that some professions – such as accountancy or law – favour graduates, but have not universally required accountancy or law degrees for career entry. Rather, they are eager to see what their candidates’ ‘graduate-ness’ can bring to the table. So, my questions for firms such as EY would be, ‘What are you recruiting for instead? And what are you doing in terms of development?’

“As we have found, when you have so many young people with degrees, it becomes a very handy screening mechanism for shortlisting. If you are recruited by EY or Google, and you don’t have a degree, then unless they’re going to give you an equivalent, internal award, you may find yourself stuck – for when you decide to move on later down the line, you will be up against people with both degrees and experience.”

Cooper adds: “I find it curious how some firms have implied that if everybody’s got a degree, then somehow it’s good not to have one. In my view, that’s a scenario in which you need one even more.”

For further insights on the themes raised in this blog, check out the Institute’s resources on learning and decision making

Source refs: [1] [2] [3] [4] [5] [6] [7] [8]



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