1 Higher Education Quarterly, Volume 61, No. 4, October 2007, pp Does a Management Degree Do the Business for Women in the Graduate Labour Market? Nick Wilton, Bristol Business School, University of the West of England Abstract The increasing dominance of an economic ideology of higher education, that its principal role is to contribute to national competitiveness, has increased focus on the employability of graduates and their transition into the labour market. Drawing on a major study of the early career paths of 1995 graduates from 38 UK higher education institutions, this paper looks specifically at graduates from business and management programmes. Such graduates would apparently be attractive to employers seeking to recruit degree holders with specific transferable skills who might be expected to hit the ground running once in organisations. The paper seeks to address the question of what effect holding a business degree has on the employment outcomes in comparison with other degree disciplines and whether or not there is any gender effect upon relative success in the labour market. Introduction The premise that a more highly educated workforce is essential for future economic and social prosperity has been a cornerstone of the economic policy of successive UK governments for the last two decades (Crouch, Finegold and Sako, 1999; Thompson, Warhurst and Callaghan, 2001; HM Treasury, 2006). Relatively recent changes to higher education policy, principally what Scott (1995) called the elite mass paradigm shift, are said to represent an ideological movement away from the traditional, liberal ideal of higher education towards an economic ideology, the basic principle of which is that education is an economic resource which should be organised in a way that maximises its contribution to Britain s 2007 The Author. Journal compilation 2007 Blackwell Publishing Ltd, 9600 Garsington Road, Oxford, OX4, 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
2 Does a Management Degree Do the Business for Women? 521 industrial development (Salter and Tapper, 1994, p. 12). This emphasis subtly changes the role of higher education towards the greater development of employability, principally to prepare graduates for the type of high skill jobs characteristic of the knowledge economy (Thompson and Warhurst, 2003; Moreau and Leathwood, 2006). However, criticism of these expansionist policies suggest that it rests on exaggerated assumptions about the impact of macro-level developments in the economy on the nature of work itself (Morris, 2004), occupational change and the subsequent skills demand for knowledge workers (as opposed, e.g. to personal service workers) (Brown and Hesketh, 2004; Thompson, 2004). Moreover, given the scale of higher education expansion, concerns have been expressed that the increased output of highly qualified people may not have been matched by an increase in demand for their skills and qualifications (Battu, Belfield and Sloane, 2000; Wolf, 2003). Regardless of the over or under-supply of graduates, a well-worn criticism from employers is that the graduate labour supply is not adequately work-ready upon leaving university (Chartered Management Institute, 2002). In particular, employers bemoan a lack of business awareness and the skills required for graduate-entry-level employees to hit the ground running (Hesketh, 2000). One disciplinary area where the expansion of higher education has been particularly pronounced, and where employers concerns about graduates might be most readily addressed, is that of undergraduate business education. In 1960, there was little evidence of undergraduate provision in management studies in universities (Danieli and Thomas, 1999) yet figures from the Higher Education Statistics Agency (HESA, 2006) indicate that in the year , business and administrative studies students represented approximately 11 per cent of all undergraduates in higher education. The findings of a number of previous studies suggest that the possession of a degree in business studies was associated with relatively positive career outcomes (Elias et al., 1999). The Higher Education Careers Services Unit (HECSU, 2003) report that business and management studies graduates experience notably higher-than-average employment rates six months after graduation (Enterprise Centre for Learning and Curriculum Innovation, 2000; also Council for Excellence in Management and Leadership (CEML, 2002)). There is concern, however, as to whether or not this reflects appropriate employment. Green and McIntosh (2002, p. 28), analysing data from the 2001 skills survey, found that, like graduates in social sciences, those with business/management degrees were more likely than average to be overqualified for their current jobs. Moreover, while the broad disciplinary area of business
3 522 Higher Education Quarterly studies is largely non-gendered in the composition of its undergraduate students, according to research conducted for the CEML (2002), female management graduates performed less well in the labour market compared with male management graduates and other female graduates. A snapshot taken six months after graduation in 2001 showed 36 per cent of female management graduates were in a job for which a degree had been required compared with 42 per cent of male management graduates and 42 per cent of the entire female cohort. Similarly, female management graduates were earning an average 14,000 compared to 14,751 for males. The same studies showed that three years after graduation, while female management graduates were now more likely to be in graduate jobs, their earnings still lagged behind that of their male peers and other female graduates. So, on the one hand, business studies graduates as a whole appear to do reasonably well in their early careers in terms of positive labour market outcomes, on the other hand, however, there is contrary evidence to suggest that women in this subject group do both less well than their male counterparts and less well than other women on average. This paper examines the career outcomes for business graduates who completed their undergraduate studies in 1995, specifically comparing the outcomes for men and women seven years after graduation. It draws on data collected in the second sweep of a longitudinal study of 1995 graduates first surveyed in (Elias et al., 1999). For the postal survey, completed questionnaires were received from 4,400 graduates from the 38 participating UK higher education institutions, representative of the full spectrum of UK undergraduate provision. The subsample of business graduates was broadly representative of the population from which it was drawn, and represented one in eight of the total survey sample (for the quantitative analysis presented in this paper, the data have been weighted to be representative of the original 1995 graduate population). A total of 201 in-depth telephone interviews were then conducted with a stratified subsample of survey respondents, 33 of whom had gained degrees in subjects generically referred to as business studies. Given that the findings of previous research tends to show employment outcomes at six months and three years after graduation, this project offered an opportunity to explore outcomes over a significantly longer period. The paper seeks to address the question of what effect holding a business or management degree has on employment outcomes in comparison with other disciplines and whether or not there is any gender effect in relative success in the labour market. Moreover, if business studies degrees act as some form of pre-employment training for
4 Does a Management Degree Do the Business for Women? 523 careers in management, how well are female business graduates faring in the attainment of managerial jobs compared with their male counterparts? Employment outcomes and labour market success amongst business and management graduates Even after seven years in the labour market, business graduates in the sample were less likely to report being in employment that was related to their long-term career plans compared to other graduates. This was also the case if female business graduates were compared to other female graduates. Business graduates were, however, marginally less likely to be unemployed and seeking work and male business graduates were marginally more likely to be self-employed compared to their other subject counterparts. Business graduates were markedly less likely to be employed in the public sector (18 per cent of the subsample) than other graduates (41 per cent) and were more likely to be working in banking and finance, business services and hotels, catering and distribution. Male business graduates were more likely to work in the heavier industrial sectors such as engineering, construction and manufacturing as well as banking and finance. Female business graduates were more likely to work in business services and the Information and Communication technology (ICT) sector. These differences are likely to be at least partial determinants of any difference in employment outcomes and will be returned to later. Male business graduates were notably less likely to indicate that possession of a degree had been a prerequisite for their current job after seven years in the labour market (Figure 1). According to the extent to which graduates were using their subject knowledge and skills in their current job, results were similar across subjects although in both cases female business graduates reported being in more appropriate employment. It is important to note, however, that many of those in jobs for which a degree had been a prerequisite had gained them after experience in jobs for which a degree had been required. Seven years on, experience rather than credentials are likely to have been more important to recruiters, particularly in newer graduate occupations compared to many professional occupations where the possession of a degree is an unequivocal requirement for entry into the profession and subsequently is required for every job thereafter.this was borne out by the qualitative data collected in the interview programme. Figure 2 compares the extent graduates were making use of their degree over the seven-year period covered by the data. On each measure,
5 524 Higher Education Quarterly Per cent Degree required for current/last job? Use degree subject knowledge in current/last job? Use skills acquired in 1995 course in current/last job? Male business studies graduates Female business studies graduates All other graduates (male) All other graduates (female) Figure 1 Responses to questions:was a degree required for your current/last job? Do/did you use your degree subject knowledge in your current/last job? Do/did you use the skills acquired on your degree in your current/last job? Per cent Male degree required Female degree required Male degree knowledge used Female degree knowledge used Male degree skills used Female degree skills used Months since graduation Figure 2 Responses to questions:was a degree required for your current/last job? Do/did you use your degree subject knowledge in your current/last job? Do/did you use the skills acquired on your degree in your current/last job? Business graduates in employment, by gender.
6 Does a Management Degree Do the Business for Women? 525 female business graduates were approximately 10 per cent less likely to enter into graduate-appropriate employment immediately after graduation but at the time of the survey this situation had been reversed and they were more likely to be using their degree skills and knowledge and to have required a degree to obtain their jobs. So, does this mean that men were really less likely to be in graduate-appropriate jobs after seven years or that experience had become paramount more rapidly for men so that they were less likely to link their employment with their qualifications in the same way as female respondents did? If female business graduates entered graduate jobs later in their careers, as Figure 2 suggests, then there is perhaps a clearer link between their academic skills and knowledge and the jobs they are doing now because this connection has been eroded less by the accumulation of labour market experience. An alternative means of investigating the extent of appropriate labour market integration amongst the sample is to use the five-fold standard occupational classification (Higher Education) (SOC (HE)) classification which distinguishes between different types of graduate occupations (Elias and Purcell, 2004a). At the time of the survey male and female business studies graduates had similar profiles of employment but they differ significantly from other graduates in the sample (Figure 3). Employment in new and niche graduate jobs (where most management jobs are classified) was notably higher for business graduates, but they are also over twice as likely to be in non-graduate jobs when compared to other graduates. Unsurprisingly, business graduates were significantly less likely to be working in traditional and modern graduate jobs (this is partly Per cent Male Female Business studies graduates Male Traditional graduate job Modern graduate job New graduate job Niche graduate job Non-graduate job All other graduates Female Figure 3 SOC(HE) classification of current job by gender.
7 526 Higher Education Quarterly due to sectoral differences already addressed; e.g. very few business graduates were working in education, a significant area of such employment). This analysis suggests that the increased supply of business and management graduates has either helped fill jobs in some of the newer graduate occupations or has compelled employers to create them. Previous studies (Elias et al., 1999; Purcell et al., 2005) have shown a significant proportion of all graduates are first employed in non-graduate jobs after completing their studies but gradually enter more appropriate employment over the course of early career. The survey suggests that immediately after graduation, of those in employment, approximately 48 per cent of male business graduates and 58 per cent of females entered non-graduate employment compared to 40 per cent of male other and 48 per cent of female other graduates. While for all groups there was gradual movement out of such jobs, for graduates in other subjects there was both convergence between genders and a levelling-out before the seven-year mark. For business graduates, however, the gender gap is maintained and both sexes appear still to be moving out of non-graduate employment at the time of the survey. The discussion thus far suggests that business studies graduates were more likely to be in non-graduate employment at the time of the survey, although the qualitative data suggests the differences between graduatelevel employment and non-graduate work are less than clear-cut, especially as careers progress and the importance of credentials recedes. Even if this is the case, do business graduates feel more negatively about their current employment or that they are in inappropriate employment for someone with their qualifications? Overall, despite being more likely to be employed in the newer areas of graduate employment or in nongraduate jobs, business studies graduates do not display significantly different levels of satisfaction with different aspects of these jobs. Respondents were asked to report levels of satisfaction for a range of job attributes: promotion prospects, total pay, the actual work, opportunity to use initiative, relationship with manager and job security. However, importantly, a notably higher proportion of both male and female business graduates reported being satisfied with their promotion prospects. Overall, business graduates reported high levels of job appropriateness and overall job satisfaction. Female business graduates were most likely to indicate being in an appropriate job for someone with their qualifications and to be satisfied with their jobs overall. With regard to job characteristics, business graduates were more likely to indicate that their jobs provided competitive salary, particularly female business graduates, compared to other graduates.there was little
8 Does a Management Degree Do the Business for Women? 527 difference between the groups in the indication that jobs provided interesting and challenging work, continual skills development and long-term security. Both male and female business graduates were more likely to indicate competitive salary as being the most important job characteristics compared to graduates in other subjects, although the most common response from all groups was interesting and challenging work. Using an index of job quality derived from responses to this question there was, however, no significant difference between business graduates and other graduates.this index was constructed by selecting six of the most widely applicable of the job characteristic enquired about in the survey (competitive salary, continual skills development, interesting and challenging work, long-term security, working in a progressive and dynamic organisation, working with people you enjoy socialising with) and assigning scores to each respondent on the basis of the number of positive responses given.there was, however, a notable difference when gender is considered: women in both groups indicating greater job quality than their male counterparts. From the above, it appears that business graduates either place greater emphasis on earnings or earn more relative to their expectations compared to other graduates. To clarify which of these is the case we can examine average earnings and the distribution of earnings at the time of the survey. Both male and female business graduates reported earning less in their first main jobs after graduation compared to all other groups (Table 1). However, for the same group of graduates, after seven years in the labour market, male business graduates were amongst the highest earners, second only to those who studied maths and computing. Similarly, female business graduates earn less than maths and computing graduates but comparable salaries to those in languages. Business graduates from post-1992 universities or colleges of higher education reported lower mean salaries than their peers who had studied at old or 1960s universities, as was the case for graduates in other disciplines. Focusing only on those who had studied at post-1992 universities, the majority of the business and management sample, the earnings of business graduates were amongst the highest overall. Most notably, female business graduates from new universities earned more on average than other female graduates from these institutions. The earnings distribution across the sample were investigated to explore the apparent contradiction between the high average earnings of business graduates seven years on and their greater propensity to be employed in non-graduate jobs. Almost one-third of male business graduates reported earning over 40,000 p.a. compared to 22 per cent of
9 528 Higher Education Quarterly TABLE 1 Mean earnings in first main job after graduation and current/last job by subject group and gender* Salary of first main job after graduation Salary of current/last job Male Female Male Female Humanities Mean 12,058 9,828 29,963 23,998 Standard deviation 7,177 7,544 16,845 10,534 Languages Mean 12,119 12,485 29,513 28,628 Standard deviation 6,758 6,966 16,551 13,097 Social sciences Mean 11,656 10,868 33,178 26,647 Standard deviation 7,969 6,795 17,757 11,637 Maths & computing Mean 14,332 11,820 40,036 33,331 Standard deviation 7,479 6,410 16,973 14,194 Business studies Mean 11,112 9,055 35,088 28,463 Standard deviation 6,973 6,798 15,569 12,737 * Previous research (e.g. Purcell, Wilton and Elias, 2007) has shown that those who studied as mature graduates tend to have different experiences of accessing employment, reflecting differences in their employment and skills developed prior to attending higher education as well as advantages and disadvantages encountered after graduation. Consequently, we confine the earnings analysis to those who graduated before the age of 30 and to those in full-time employment.
10 Does a Management Degree Do the Business for Women? 529 all other male graduates. In contrast, almost one quarter reported earning less than 24,000 p.a. compared to 28 per cent of all other males. Similarly, approximately 14 per cent of female business graduates earned more than 40,000 p.a. compared to 9 per cent of all other female graduates and 41 per cent earned less than 24,000 p.a. compared to 45 per cent. Average earnings for male business graduates, therefore, hide a greater distribution of salaries than for male graduates as a whole.this is not so apparent for female business graduates who are disproportionately represented at the higher end of the scale compared to the other subject female cohort. Of course, there appears to be a significant pay gap between men and women, as in the sample as a whole. Women with business studies degrees may have higher than average earnings for female graduates, but there was a 19 per cent pay gap between male and female business graduates (accounting for a difference of approximately 6,500 in mean annual earnings at the time of the survey). There are, therefore, conflicting findings regarding the employment outcomes of business graduates. Business graduates were more likely to be employed in non-graduate jobs but overall do not display significant dissatisfaction with these jobs. There is also evidence that both male and female business graduates were disproportionately to be found amongst the highest average earners. Therefore, although there is a significant gender pay gap, there appears to be little other evidence of a disparity in the career outcomes of male and female business graduates. Is it simply that men are being paid more or are there other qualitative differences between the jobs being done by men and women which result in different levels of pay? Alternatively, are there differences in career trajectory that result in this imbalance? A key question in understanding gender differences amongst business graduates and to further explain disparities in earnings is to understand to what extent business graduates are entering into managerial roles, especially given that these are likely to be the roles where higher earnings are available for graduates with their skills and qualifications. Business graduates and management jobs Business graduates in the sample were employed in disproportionately large numbers in newer graduate occupations and non-graduate jobs compared to other graduates; but what types of job were they doing in these occupational areas? Business graduates were notably more likely to be in managerial or senior official posts compared to other graduates and were less likely to be in professional occupations (Figure 4). This applies
11 530 Higher Education Quarterly Per cent Managers & senior officials Professional occupations Associate professionals & teachnical occupations Business studies graduates male Business studies graduates female All other graduates male All other graduates female Administrative & secretarial occupations Other occupations Figure 4 Current occupation according to SOC 2000 Major Group, comparing business studies graduates and all other graduates by gender. equally to males and females and was the case even when business graduates were compared to graduates from other non-vocational degree disciplines. Wilton, Purcell and Elias (2004) found that 29 per cent of business graduates were in managers and senior officials posts compared to 23 per cent of social science graduates and 19 per cent of those from arts, humanities and languages. However, the data also shows a greater proportion of business graduates were employed in administrative and secretarial occupations (14 per cent) when compared to the sample average (7 per cent) and higher than for graduates in arts, humanities and social science (9 per cent). Notably, this was more pronounced for female business graduates. Therefore, a polarisation is apparent between the higher proportions of business graduates employed in managerial occupations and those in administrative positions. Analysis of the data using the National Statistics Socio-Economic Classification suggests a similar pattern. More business graduates were employed in the large employers and higher managerial occupational group (20 per cent for both males and females compared to 10 per cent for the sample as a whole), but a similar proportion were also employed in intermediate occupations (including in this sample, e.g. administrative assistants and personal assistants (PAs), clerical civil servants, customer service advisors and bank clerks). Male and female business studies graduates were both more likely to be in management-level employment than other graduates at all points following graduation (Figure 5). It is not, therefore, that business gradu-
12 Does a Management Degree Do the Business for Women? Male business studies graduates Female business studies graduates Male 'other' graduates Female 'other' graduates 25 Per cent Months since graduation Figure 5 Movement of 1995 graduates into management occupations (SOC 2000 Major Group 1), comparing business graduates and all other graduates by gender (all graduates in employment). ates are being accelerated into managerial occupations at a greater rate than other graduates over the course of early career, but that the possession of a business degree appears to give these graduates a head start and enables them to enter such positions at an earlier stage. Importantly, whereas there is a non-convergent gender gap in the attainment of these jobs between male and female graduates in other subjects, the proportions of male and female business graduates in management occupations appears to equalise at around the four-year mark and continued to increase equally thereafter. This is despite men going into management occupations in significantly greater proportions than women immediately after graduation.this is consistent with the pattern of attainment of graduate employment for female business graduates discussed in the previous section; that they were less likely to report requiring a degree for their jobs immediately after graduation but more likely to do so after four years and beyond. Therefore, it would seem that there are different patterns of entry into management jobs for male and female business graduates. This is also
13 532 Higher Education Quarterly consistent with the finding that female graduates report greater job change activity in early career which, for female business graduates, coincides with the greater attainment of management occupations that make greater use of their skills and knowledge and for which a degree had been a requirement. Of course, this other subject grouping is highly heterogeneous and is likely to mask inter-subject differences in outcomes. Comparing the management premium conferred by possession of a business studies degree over other non-vocational subjects, for example, humanities, social science, and maths and computing (representative of subjects that are more likely to lead to managerial careers than more vocational subgroups, such as education or engineering) reveals that, for both males and females, business graduates are significantly more likely to enter into a management job straight after graduation and maintain this proportional advantage throughout the seven-year period. This would suggest that a business degree appears to provide a route directly into management jobs for a higher proportion of relevant degree-holders from other areas of study at the start of their careers. Importantly, this advantage is most pronounced for female business graduates. However, in the analysis of earnings (Figure 4), there is a notable polarisation of outcomes for business graduates overall, reflecting the notably higher proportion of business graduates, especially women employed in secretarial and administrative and intermediate positions. This may partly account for the higher levels of non-graduate employment for this group compared to other graduates and is likely to represent underemployment. The qualitative data suggest that there are some very demanding and well-rewarded intermediate or administrative posts that require applicants to have degree-level qualifications but it can be assumed that the majority of similarly classified jobs are not graduateappropriate. Comparing the movement of respondents out of such jobs, it is notable that significantly higher proportions of business graduates, especially women, are entering into administrative employment immediately after graduating and while the proportions declines significantly, a greater share of female business graduates were employed in these jobs after seven years. Other subject graduates enter these jobs in lower proportions after graduation and after a gradual decline, the proportions level off and equalise for men and women. Labour market analysis by such broad classification, which essentially derives from job titles alone, can be problematic and, in this case, can only ever be a rough guide to the incidence of actual managerial work amongst the graduate sample. Graduates working in occupations defined
14 Does a Management Degree Do the Business for Women? 533 as managerial may not necessarily be doing work that requires the accumulation of their credentials, knowledge and skills. To better assess the extent of the attainment of managerial and graduate-appropriate jobs, one can examine skills requirement and job content to better evaluate differences between the jobs currently held by male and female business graduates that might account for differential earnings. The questionnaire asked survey respondents to indicate the extent to which they used each of a range of generic skills, ranging from problem solving to team working, in their current job. Across the sample, business graduates and other graduates reported similar patterns of usage for problem solving, written communication, spoken communication and ability to work in teams. However, of a range of skills that might highlight the incidence of management work, analysis shows that business graduates overall were more likely than those from other disciplines to report that leadership and managerial skills were substantially required in their jobs, similarly so for both men and women. Male business graduates were more likely to report the use of entrepreneurial skills than other groups. Furthermore, business graduates were also more likely than other graduates to have stated that responsibility for managing the work of others was a central aspect of their current employment, particularly female business graduates. Explanations for variable labour market outcomes The analysis presented so far indicates that, overall, female business graduates are reasonably well served by their degree discipline on the basis of labour market outcomes. The evidence discussed does not, however, explain why business graduates were more likely than other graduates to be employed in non-graduate jobs, particular administrative and secretarial jobs that are likely to represent underemployment, other than to discount that this is a gender issue (given that roughly equal proportions of men and women are to be found in such positions). It appears more likely to be related to the discipline itself or some associated factor. One such factor is likely to be the greater likelihood of graduates from post-1992 universities or colleges of higher education being employed in intermediate occupations. Given that approximately 81 per cent of business graduates studied at these types of establishments (compared to 52 per cent for the entire sample) then their overrepresentation in intermediate occupations may simply reflect the occupational outcomes of graduates from these institutions more generally. For example, graduates of colleges of higher education made up 6 per