Here’s Why Your University Degree May Not Have as Much Value as You Think
Have you gone to university? Chances are, if you’re reading this article, then you probably have or are thinking of doing so. It seems like the natural progression after elementary and secondary school. It is the goal, after all, of most secondary school students to beef up their grades and fill in their extra-curriculars in the hopes of getting accepted into a prestigious university.
But does attending university still have value? With the rapid rise of unemployment in the time of a pandemic paired with an over saturation of degree takers, it seems like the once novel idea of going to uni has backfired. And unfortunately, those who are being affected are the fresh graduates who desperately need the edge university promised.
Let’s Take a Look at Some Statistics…
According to an article in China Daily, “numerous fresh graduates enter the job market at a level not requiring a degree.” South China Morning Post corroborates this statement, saying that a study by New Century Forum finds that one in six university graduates take up ‘low-paid, unskilled work’. These were defined as blue-collar jobs such as clerks, shop assistants, security guards, and assembly workers.
The same study also found a rising pattern in the number of students with postsecondary qualifications taking up low-skilled jobs. In 1997, 8.4% of university students took up unskilled work. In 2007, the number rose to 11.4%, and in 2017, the number had steadily risen to 16.4%.
As if these numbers weren’t disheartening enough, New Century Forum also found that “fresh graduates now earn about 9.6% less in their first job than graduates 25 years ago” with the “median salary of employees with university qualifications falling 10.4% over the past decade.” However, when you look at the median wage of the overall workforce, the numbers show a 99.2% increase from 1987 to 2017.
Employment in Today’s Reality
The statistics obtained from New Century Forum detailed data up until 2017. Fast forward three years later, and the situation under COVID-19 and Hong Kong’s turbulent political landscape has plunged the job market into one of the highest unemployment rates seen in the last 15 years. According to Human Resources Online, the number of unemployed persons surged to 230,400 in the months of March to May 2020.
With 22-degree awarding institutions and an estimated 20,000 to 30,000 graduates expected to join the job market, fresh grads can expect an uphill battle when it comes to finding a job. South China Morning Post says, that “the number of job vacancies for university graduates in Hong Kong has been more than halved, and the average salary could be slashed by up to 20%.” Even employee portals and recruitment websites like The Joint Institution Job Information System (JIJIS) and JobsDB have roughly 40–55% less job vacancies this year than they did last year.
In fact, consulting company Trivium China shares in an article with the Nikkei Asian Review, “Many Chinese companies are scrambling to avoid layoffs of their existing staff — nobody should expect them to go on a massive hiring spree at a time like this.”
The reality of 2020 has forced large industries like the travel, hospitality, construction, retail, and food and beverage industries to shrink in size, accounting for not only the lack of vacancies, but the loss of jobs as well. Now, new graduates have to fight doubly hard to secure a job as they are also going up against more experienced job-seekers.
Due to the bleak job market, it shouldn’t come as a surprise that The Global Recruiter found that 57% of fresh graduates have decided to delay their job searches for the meantime. This is “mainly because the ‘salary offered is lower than expected’ (12%) and partly due to ‘social instability’ (7%).”
The Rise of ‘Degree Depreciation’
How did we get here? How did it get to this? The assumption is that university is your golden ticket to a good life. You go to university to get hired by a good company, have a relatively higher salary (because you did put in the work to study after all), and rise up the ranks in order to gain career stability and financial capacity. So what happened?
Well, we can start by looking at it as a simple problem of supply and demand. In 1987, the number of workers with a university education was at 131,900. In 1997, the number was at 361,900, in 2007 the number rose to 676,000, and 10 years later in 2017, the number is at 1.08 million — that’s an almost 60% increase in the last 10 years alone! If we look at the increase of jobs on the other hand, you’ll see that the rise is at a meager 18% compared to the 60% increase in graduates.
Ironically, the expansion of universities and publicly funded university degrees and courses have resulted in an over saturation of the job market, and as researcher Chan Wai-keung says, a “degree depreciation”, which attenuates the quality of a university education. Because Hong Kong is producing more graduates than companies know what to do with, Chan says that employers no longer value bachelor degrees.
The Mismatch and Disconnect
The problem of an increased supply of graduates gives rise to questions and concerns regarding the mismatch between the graduates that universities produce and the employees companies are looking to hire. Now, it’s more than a simple issue of increased supply.
According to Global Focus, the online business magazine of the European Foundation for Management Development, there is a major disconnect between what students study at university and what employers value in practice. These universities tend to follow traditional methods and curriculums, where there is a right answer for everything and where high grades equate to excellence.
However in focus groups held by Global Focus, the findings showed that employers placed priority on soft skills such as adaptability, responsibility, and teamwork over what students thought employers looked at — academic performance. The findings also showed “gaps in students’ knowledge of personal strengths and self-awareness, such as career goals and areas for development.”
So What Now?
On the graduates’ end, Alexa Chow Yee-ping, managing director of AMAC Human Resources Consultants, said in an interview with South China Morning Post, “…Fresh graduates need to reset their expectations, and universities need to know the workplace better. Gone are the days when one could get a decent job and decent pay after leaving university.” Global Focus adds that “employable students need to be self-aware ‘can-doers’, not just subject-specific learners.”
Before heading out into the chaotic job market, students can do a number of things to prepare them for their careers. Self-awareness — knowing your strengths and weaknesses and having career goals — is an important value to have. Students can also make an effort to understand the job market and trends, find out what employers are looking for, and explicitly identify what they can offer their chosen industries.
On the universities’ end, they need to step up and be the guiding force behind the students’ self-awareness and understanding of employment. Integrating experiences that bridge students’ education to the real world is one way to bring students up to speed.
On the employer’s end, clarity and communication on what they’re looking for will be a great help. But beyond simply providing a list of attributes, companies should take into account investing in student engagement activities. Internships are the traditional answer to this, but there is no limit to how much or how creatively they can engage with students. They can consider after-school programs, other experiential learning opportunities like career talks, company tours, etc. While the initial investment may be large, the return on a well-suited employee will be worth the effort.