Postgraduate degrees = automatic payout?

Do postgraduate degrees really guarantee higher salaries instantly, or is this commonly held belief a workplace myth? Find out what employers have to say about the issue. 

 

Cautious optimism: two words that basically summed up the opinions of most Malaysians – employees and employers alike – when the 10th Malaysia Plan revealed the government’s plans to drive the country to become a high income economy by 2020. 

Among the transformational pillars highlighted in the ambitious plan were having a Talent Corporation to actively source top talent, and shifting towards higher value-add and knowledge-intensive activities. 

 

Talent Corporation Malaysia Bhd (TalentCorp) head Johan Mahmood Merican was recently quoted in The Star as saying that attracting and retaining top talent (ie high-potential employees or top performers) is vital in achieving the 2020 salary goal. 

 

‘A key enabler to achieve the ambition to transform into a higher income economy is talent. Clearly, the Malaysian diaspora is an important part of the equation; we have many Malaysians all over the world and many are successful. We want them to help Malaysia in the transformation. But TalentCorp's mandate has to go beyond bringing back the diaspora,’ he said. 

 

There is evidently a pressing need for highly qualified and highly skilled workers to take on a pivotal role in the country’s development in relation to becoming a high-income nation nine years down the road. However, to attract these top talents to work in Malaysia, employers have to first entice them with juicy carrots in the form of fat paycheques and attractive perks. 

 

So what does this chicken-and-egg situation mean to postgraduate degree holders? Do their high qualifications automatically ensure them higher salaries, or would they be made to prove their worth first by employers? 

 

Employer expectations

The Malaysian Employers Federation (MEF) – which acts as custodian of the interests and rights of private-sector employers – supports the creation of a high-income economy as envisioned by the powers-that-be. 

 

However, it strongly believes that a high-income economy should be the result of boosting performance and productivity through skills development and a review of labour laws, and not through reactive means such as setting up a national minimum wage. 

 

‘What is important is for the country to achieve the high income economy status without compromising the nation’s ability to maintain and enhance its competitiveness in the globalised economy,’ said MEF Executive Director Shamsuddin Bardan.

 

Shamsuddin believes that performance-linked wage systems (PWLS) are crucial to enhancing the country’s competitiveness in the global market, as well as attract foreign investors. 

 

In other words, employees likely still need to prove they have what it takes to justify a high earning potential by churning out high-quality work, as paper qualifications alone can only get them so far. 

 

Exceptions to the rule

However, postgraduate degrees do carry weight in sectors such as financial services and consulting, where the real money is. Entry-level postgraduate degree holders typically command a higher starting salary compared with their undergraduate counterparts in such fields. 

 

‘We employ postgraduates to work with us as audit or tax associates, or executives in the various advisory, depending on their qualifications or service lines which they have applied for,” said Alex Ooi, a partner at international accounting and consulting firm BDO Malaysia. 

 

Citibank Berhad’s country HR head Aditya Mittal said those with a strong Master’s degree or MBA could qualify for the company’s leadership development programme. ‘Our programme has produced premiers, central governors and bank CEOs across geographies and has created a pool of multidimensional managerial talents who are empowered to lead and inspire change,’ he said. 

 

Reality check

While there are some industries or companies that generally pay postgraduate degree holders a higher starting salary than those without, the question now turns to the return on investment (ROI) from completing postgraduate programmes such as the MBA. 

 

MBA programmes are by no means cheap, and require a sizeable investment regardless of whether one opts to do a full-time or a part-time course. A recent article by The Economist compared the salaries of individuals pre- and post-MBA, deliberately factoring in the ROI into the equation. The result: a significant disparity of at least US$20,000 per annum upon graduation for courses undertaken at reputable business institutions. 

 

 

‘If you are getting good business experience already, the best strategy is to keep on getting it, thereby making yourself ever more useful rather than groping for the evanescent brass rings of business school,’ argued Philip Delves Broughton, the author of the article. 

 

Broughton made a clear point that postgraduate qualifications in the area of business is still no match for hands-on experience, going on to quote examples of major corporations and famous businesspeople who raked in billions despite not having an MBA degree. 

 

However, the article did not explore the future returns of furthering one’s studies. In most cases, one should expect an initially low − if not negative − ROI after completing a postgraduate degree. This is because it takes time for knowledge to translate into new skills and experience. 

 

Other elements

It therefore appears that fresh graduates with postgraduate qualifications have other hurdles to overcome when applying for jobs with a potential to earn high wages. Gone are the days when candidates were selected purely on academic qualifications and a face-to-face interview.

 

Recruitment processes are getting more robust, with a variety of assessments to ferret out the top talents among a pool of candidates. These assessments include psychometric testing to determine good human-job match and behaviour-based interviews to suss out attitudes and work motivation, as well as reasoning ability testing to determine learning potential. 

 

‘Just because a candidate looks good on paper doesn’t mean he or she is fit for the job. The most important trait we are looking for in a candidate is the ability to fit in with co-workers and the company… candidates will be invited to attend numerical and verbal assessments, followed by a personal or group interview. Certain positions may require additional assessments and a more detailed interview, depending on the complexity of the role,’ said Andrea Chua, KPMG Executive Director, People Performance Culture. 

 

Major corporations also have their own talent development programmes to identify and nurture future leaders. ‘Our structured programme aims to develop a balance of functional excellence and skills to enable one to effectively lead in the future,’ explained Larry Yap of The Sunway Group. 

 

A postgraduate degree should therefore not be taken as a standalone factor to getting a fatter paycheque immediately. Judging by what employers have to say, pure learning power does not automatically translate into pure earning power. To grow one’s earning potential, time and effort has to be invested into developing the relevant skills and gaining significant experience. 

 

Nonetheless, a good postgraduate degree is still a key step to attaining greater riches, materialistic and otherwise. 

 

This article first appeared in postgradasia 2011, Issue 1.