With postgraduate qualifications becoming ever more common and university fees reaching new heights, it’s fair to ask whether doing further study is really worth the time and money.
Holding a postgrad degree is becoming less special — the number of Australians with postgrad qualifications increased from 631,000 to 921,000 between 2011 and 2016. That’s a jump of nearly half in a handful of years.
It’s expensive, too. An 18-month Master of Business Administration at Sydney Uni will cost you around $75,000 full fee. Or if you’re game, why not go for Harvard? You won’t get much change out of $300,000 AUD for your full costs over two years.
Or there’s the ‘MBA with a conscience’ — the master of public administration — which costs around $60k at the ANU’s Crawford School and up to $70k at the Melbourne School of Government.
And that’s without factoring in taking time off work, studying during your spare time, increased stress levels or the impact on family life.
But people with postgrad degrees earn more than those with just a bachelor’s degree, with one study finding the difference over a lifetime on average is nearly $300,000 — and it can, of course, be a very useful way of reorienting your career.
Perhaps unsurprisingly, the value of doing an MBA came up at an “MBA in a day” event for young professionals in Melbourne last week.
Are formal qualifications still the be-all and end-all, or should job-seekers and recruiters be focusing more on things like demonstrated behaviours?
Is it all just a very expensive exercise in signalling?
Speaking on a panel discussion about the public service jobs of the future, Sasha Lord, senior manager at consultancy Insync Surveys and former local government employee, recalled some earlier career advice she received.
“I was doing really well in my local government career and I said to my director at the time, what’s next, how do I get the next leg up? He said: you need an MBA … you won’t have a seat at the table unless you have an MBA,” she explained.
“Quite bluntly, in the current environment, qualifications do really matter.
“But I also think it depends on the role you’re in. If you’re kicking goals in community engagement, I don’t think you need to go and get a degree in community engagement. But if you want that leadership role, they’ve certainly told me that’s what I need, to get a seat at the table.”
Yet research shows formal qualifications and years of experience are not good predictors of how you’ll perform in a job, said Jarrod McLauchlan, Victorian general manager for executives and boards at search firm Davidson.
Nor, many will be pleased to hear, are key selection criteria.
Indeed, a few of the innovative big firms are reconsidering the weight they place on formal qualifications in hiring. The British arm of Ernst and Young decided a couple of years ago to remove academic qualifications from their graduate entry criteria after an evaluation of 400 graduates found no evidence that academic success correlated with future professional success. While academic results will still form one means of assessing candidates, the company hopes that removing it as a requirement will put people from different backgrounds on a more equal footing.
McLauchlan’s advice is to get broad experience and put yourself in positions where you can learn from different people, so you can work out what you do and don’t like.
In practice, hiring managers’ approaches to formal qualifications is very much “each to their own”, says McLauchlan.
“Everyone’s got a different perspective on this. If you’ve got a hiring manager who has an MBA, and they took a huge amount out of that learning experience in doing their MBA, they will hold MBAs in a very high regard. The personal experience of the hiring manager does have a big impact.”
Risk aversion also plays a role — if the new recruit turns out to be a bad pick, the manager knows that at least they won’t get in trouble if they’ve hired someone with the right formal qualifications.
But perhaps the proof is in the pudding — when given the opportunity to undertake an MBA a few years ago, McLauchlan opted for a less academic, more personally reflective, professional development program instead. He says it’s been a rewarding experience.
It’s important to consider where you’re at in your career, and what you’re trying to achieve. Are there more straightforward ways of getting where you want to go?
“It really depends what you’re getting out of it,” says Derek Madden, general manager for corporate services at Cardinia Council.
“You see people with MBAs who don’t have the work experience behind them to have the MBA. One of the things about the MBA is you should be able to bring some experience into that classroom so everyone else can learn. So if you do a bachelor’s degree and go straight onto an MBA, I’d question the wisdom of that,” he told the event, which was hosted by the IPAA Victoria and LGPro Young Professionals Networks.
It’s a big commitment of time when there are plenty of others things you could be doing.
Madden, who originally trained as an accountant, didn’t find the “four years of Saturday mornings and Wednesday nights” worthwhile.
“I did an MBA and got absolutely nothing out of it.”