I gave a speech on 15th September 2015 to Graduate Recruiters Network to a group of employers on the latest global salary trends of masters graduates recruitments. They asked me to summarise key points I said at the meeting. Here it is.
I would also like to take this opportunity to thank my amazing QS colleagues especially Benjamin Clayton and Susan Gatuguta Gitau whose great support and fantastic work has enabled this major research piece possible.
After the major fall in salary levels between 2013 and 2014, 2015’s responses have shown signs of recovery. While salaries have not risen across the board – Eastern European salaries fell slightly, while Asia Pacific saw a major drop – the overall trend is one of growth, which should give students working on their postgraduate degrees a lot to be optimistic about.
Asia Pacific’s salary drop was especially dramatic considering it had been rising since 2012. It is currently at its lowest point since 2011. Eastern Europe’s salaries have declined for the second year in a row, and 2015 is its lowest salary level so far. Africa & Middle East has broken out of its own two-year decline and is growing again, while Latin America and Western Europe have recovered from their 2014 slump. Salaries in the US & Canada, on the other hand, are on a two-year streak of growth and are at their highest point yet.
As in previous years, the US & Canada have the highest salary levels, with Western Europe a reasonably close second place. However, in a change from previous years Africa & Middle East and Asia Pacific have switched positions – the former now has the third highest salaries, and the latter the fourth highest. Eastern Europe retains its position at sixth place, with the gap between salaries there and Latin America growing larger. As of this year, only Western Europe and the US & Canada had salaries above the global average, though Africa & Middle East came within $1,500 of doing so.
2015’s responses show that the salary a Masters graduate can expect from their work may vary a lot depending on their employer.
The general rule isn’t particularly surprising: The wider a company’s scope of employment, the more it is likely to pay – Global employers provide the highest salaries. Interestingly, there are exceptions to this rule. Local employers seem to pay slightly more than National employers, bucking the trend. Also, while Global employers have the highest salaries, they pay the lowest ‘Masters Premium’, meaning they give a smaller increase in pay to Masters graduates compared to graduates with a Bachelors degree only.
Although almost every industry’s average salary fell during 2014, the majority have risen in 2015. Notable exceptions include Transportation / Distribution and Public Sector / Government / Non-profit: Not only have they fallen for the second year in a row, but each fell by roughly $4,000.
In better news, 2015 is a very good year to be involved in Utilities and Retail, which rose by nearly $20,000 each. Recruitment / HR services have risen for the fourth consecutive year – while their average salary is below the global average, it is only to have seen four (or even three) straight years of growth.
Africa and Middle East
In Africa and Middle East, Energy is, by some leaps and bounds, the highest payer. It also carries an enviable Masters Premium of 40%, so there’s a clear demand for specialist knowledge and training. Unsurprisingly, Consulting / Professional Services and Financial Services / Banking also pay well, and above the region’s average. FMCG also pays above the regional average, but only just. Despite the Middle East is the location of all the lucrative Energy jobs among 2015’s Africa & Middle East responses, Africa has the higher average salary. With that said, it is worth noting that Africa had the smaller sample size of the two sub-regions.
Sadly, 2015 marked the end of Asia Pacific’s growth trend, with the average salary down nearly $7,000 from 2014. There are still plenty of high performing industries, and the average salary appears to be dragged down heavily by the ever-ambiguous ‘Other’…
Law is the highest paying destination for Masters graduates in Asia – though unlike many other industries, this option is available only for students who graduated in Law. These high-paying firms were focused around China, Australia and New Zealand. Jobs in Utilities, which also did well in salary terms this year, were all from the East Asia sub-region.
Australasia was the highest paying sub-region by a fair amount, but it also had the lowest Masters Premium and the second smallest sample size. Salaries in Central Asia were far below the regional average, and more than $10,000 lower than Southeast Asia, which had the second-lowest average salary of the sub-regions. However, Central Asia also had the highest Masters Premium; while opportunities might be limited for personnel with only one degree, a prevailing trend across sub-regions is that areas with lower average salaries are willing to pay a higher premium for well-trained individuals.
Conditions have been tough in Eastern Europe. 2015 is the fifth year in a row that it has the lowest average salary of all the regions (according to our responses), and the situation has not been helped by instability in Ukraine and the economic crisis in Russia.
Interestingly, Eastern Europe is the only region where Education has an average salary above the regional average. In fact, it has the highest average salary of any industry in the region.
More than half the recorded industries in Eastern Europe do have an average salary higher than the regional average – however, the ones below the regional average have received a high number of responses.
While the region as a whole has a Masters Premium similar to the global average, Telecoms offers an impressive 41% premium.
Across various QS surveys of applicants and employees, Latin American respondents have always been the most realistic in terms of their salary expectations. Fortunately, this survey of employers indicates that level-headed thinking will be rewarded by steadily increasing salaries and a high average Masters Premium. Latin American salaries have not yet risen back to their peak in 2013, but are recovering from 2014’s slump.
As a resource-rich continent, it is not too surprising that Metals / Mining has the highest average salaries in Latin America. More interesting is that it also has a Masters Premium of 27% – while this is the regional average, it is well above the global average. IT / Computer Services is also a high performing industry in the region, perhaps reflecting the start-up culture which is currently growing across the continent, but particularly in Mexico.
US & Canada
For five years running, the region of US & Canada has the highest average salaries across the globe. Although it saw a small setback in 2013, salaries have been rising for two years in a row and are currently at a record high. With that said, it also has the joint lowest Masters Premium. Nonetheless, while the geopolitics of the world may be starting to favor Eastern regions and developing countries, personal wealth flourishes in the developed West.
As the region home to Silicon Valley, it makes sense that many of US & Canada’s highest performing industries are related to technology. While Financial Services / Banking occupies the top spot, Electronics / High Technology is close behind it. Considering the advent of ‘FinTech’ (financial technology), it is entirely possible that these two industries will be sharing in each other’s success.
The joint highest Masters Premium in the region can be found in Education and Pharmaceuticals / Biotech & Healthcare, at 17%. Other industries place considerably less value on the skills and training that a Masters course provides, with an average Masters Premium of 13% across the region.
After seeing a fairly dramatic fall in 2014, salaries in Western Europe are nearly back up at their 2013 peak. Either way, 2015 has been a year of growth, which is impressive in the circumstances (i.e. fears of contagion in the Eurozone as a result of the Greek lending crisis, as well as ‘austerity’-centric government policies across the EU).
Europe as a whole and Western Europe, in particular, have a history of paying public servants decent wages. According to 2015’s results, either these wages are now very decent indeed or the ‘Non-profit’ sector is more profitable than expected: Public Sector / Government / Non-profit is the highest paying industry across Western Europe, at least for Masters graduates. Energy is the second highest, coming exceptionally close to reaching an average salary of $60,000.
The Masters Premium across Western Europe falls well below the global average of 20% – it is only reached in Western Europe by Utilities and Travel / Leisure / Hospitality.
Exciting news for Danes, Swedes and Norwegians (amongst others): Northern Europe is the highest paying sub-region across the globe! At comfortably over double the worldwide average salary, the fact that it has the lowest Masters Premium of any sub-region (10%) is much less of a downside than it otherwise might be. Do note, however, that countries in Northern Europe also have a famously high cost of living and that the sub-region had a relatively small sample size.
Southern Europe actually has an average salary below the global average – and given that its Masters Premium is also below the global average, this could be an issue for many Masters graduates seeking a return on their investment. Most of Western Europe’s toughest economic woes are confined to its southern states, which is leading to a slight ‘brain drain’ as talented graduates from the region choose to find work away from their homelands. However, Masters graduates wishing to work in Education will be pleased to see that there is only a difference of $3,000 between pay in Western and Southern Europe. When the cost of living is taken into account, Southern Europe is perhaps the best destination for Education workers in terms of financial reward.
Responses from Western Europe make up the vast majority of the region’s sample, so most of the trends mentioned earlier (Energy and Financial Services / Banking having the highest salaries, for example) apply here. As is the case in other regions and sub-regions with high average salaries, the average Masters Premium in the Western Europe sub-region is low. At 12%, it’s the second lowest in the world.
If you are interested in finding more about Global Job Salaries and Trends related research from QS, please do feel free to contact me at [email protected]