Brett Holmes had a bachelor's degree in computer science from a top-tier university, but he hit his head on the advancement ceiling when promotions came around. His direct-report manager at the Silicon Valley software company where he worked told him he could not move into a higher-paying marketing role without a master's degree. The only good news, Brett says, is that his company offered to pay part of his tuition for the online MBA degree that would spring him loose in a tight, competitive job market.
While your bachelor's degree may fit your career choice to a tee, many working college grads are discovering a need to pursue a graduate degree to keep pace with the cost of living. Many others have gone as far as they can in their chosen professions with the bachelor's degree and are turning to graduate school for a master's degree in a completely different subject area to compete for higher pay.
In general, college graduates today are more dissatisfied with the jobs for which they had originally prepared. The Washington Post reports that job satisfaction dropped from 69 percent to 61 percent in a one-year period. Educated workers are accepting jobs they really don't want just to pay the bills.
According to Salary.com, "discouraging predictions" in pay hikes have motivated workers to seek advanced degrees. Moreover, recent bachelor's degree holders are shying away from the job market, going directly into graduate degree programs. More than 1.8 million bachelor's degree holders entered the labor market in the past ten years while, at the same time, almost 700,000 people who only held high school diplomas lost their jobs. Over a lifetime of employment, a bachelor's degree has nearly twice the financial yield of a high school diploma alone ($2.1 million compared to $1.2 million). Has the market been saturated with undergrad degree holders?
Is a Bachelor's Degree Passé?
The U.S. Bureau of Labor Statistics (BLS) reports that people 25 and older with college degrees increased by 20 million (almost a 50 percent hike) between 1992 and 2004. An estimated 40% of today's college students are 25 years old or more--meaning people are returning to or staying in school.
Jobweb predicts that employers will hire almost 15 percent more college grads this year than in 2005. Who are employers recruiting? Increasingly, they seek people with advanced degrees--and more than half of them will be looking for MBA degree grads, says Jobweb. In fact, the most in-demand graduate degrees will be the MBA and advanced degrees in Electrical Engineering, Accounting, Computer Engineering, and Mechanical Engineering.
Does this rush to hire graduates with advanced degrees mean that your bachelor's degree has little value in today's employment market? Not necessarily. Some career fields have always required master's degrees or higher: physicians, lawyers, university professors. And other professions--particularly so-called blue collar jobs--historically have not. But more and more, if you want to move into management roles in blue-collar organizations, you'll need additional training or an advanced degree.
The BLS says that of the 10 fastest-growing occupations, half demand advanced computer skills. Three of the top-ten rising occupations are in health care and call for master's degrees. Three others are network systems or data analyst IT jobs which require at least a BA (and probably higher) in this competitive market. Computerization and offshore job sourcing of what once were mid-range professions have further closed down the field.
Nine out of the ten fastest-growing jobs will be in IT or health care. Business and financial operations jobs will grow faster than the average for all occupations. This means that MBA degrees will continue to be in high demand.
Do the trends suggest more people will be returning to school to get advanced degrees? Older workers simply may have to. Here's an astonishing BLS projection: "The labor force will continue to age, with the number of workers in the 55-and-older group projected to grow by 49.1 percent, nearly 5 times the 10-percent growth projected for the overall labor force."
Rising costs of living mean that initial projections for a stable retirement may be out of sync with the economics of retirement today. It can be dire for some. Those people who work beyond age 55 today will have to keep pace with ever-advancing skill sets established across all occupational sectors.
Advanced Degrees: Higher Earnings, Lower Unemployment Rates
The BLS consistently reports data affirming that earnings rise with the level of degree attainment--and unemployment falls. In the decade ending in 2012, 14 million jobs will go to degree holders. BLS findings show that people holding master's degrees earn 21 percent more than people with bachelor's degrees. The following chart based on BLS data in 2000 (the most recent year for which these statistics are available) displays the average increase in earnings for selected career fields according to degree.
Advanced degrees seem to offer an element of employment insurance, since more workers holding master's degrees held their jobs through layoffs when compared to those holding bachelor's degrees or high school diplomas.
Unemployment among workers with high school diplomas was three times higher than unemployment among those with professional or doctoral degrees and twice that of workers holding bachelor's or master's degrees.
The Increasing Value of an MBA Degree
The Graduate Management Admission Council (GMAC) reports a higher volume than ever in students testing for entry into MBA degree programs--already more than 4% higher than last year. BusinessWeek Online reports entry-level MBA base salaries are up more than 4% over last year, too.
More than ever, MBA degrees, whether completed in executive online courses or campus-based programs, are becoming the currency for admission to American commerce management. How does this translate into earnings? According to Career Journal, you simply earn more by combining your on-the-job experience with a new MBA degree. Grads with less than three year's experience converted their average annual wage of $40,606 to $68,231 plus a nifty $12,874 hiring bonus with their new MBA degree. Those with up to six years' experience converted an annual $55,454 wage to $89,326 and a signing bonus of $12K. And those with more than six years' related experience with a newly minted MBA degree saw their $70,510 annual wage rise to $97,736.
Competitive for Life
Mark Carlos, an independent consultant, signed up for an online MBA program at age 50. He held a bachelor's degree in accounting from a California college and discovered that, despite 20-plus years of experience in the IT field as a self-educated marketing whiz, he was missing out on MBA-level engagements. He wanted viable credit for long-time service in the IT consulting profession. In short order, following the completion of his online MBA, Carlos saw a dramatic upturn in competitive contracts.
The BLS says that jobs are increasing in complexity, requiring progressively greater skills across IT, management, and financial competencies. Previously straightforward job descriptions now call for candidates who can wear many hats.
For example, a hospital floor nurse with a bachelor's degree will need a master's degree to move into patient management or administrative roles. A code programmer with a bachelor's degree may have to earn an MBA degree to head a team marketing the latest software.
The American job market continues to serve those who specialize. To stay competitive in an era of down-sizing means you may have to attain significant educational up-sizing.