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Luminate's global review: pay gaps and team players

October 2020

A quarterly look at the need-to-know international news, views and data in graduate employability, recruitment and the labour market

Female graduates in Australia face stark gender pay gap 

August saw the publication of Australia's Graduate Outcomes Survey - Longitudinal report. It reveals what 2017 graduates were doing in the short term (four to six months after leaving university) and in the medium term (three years after leaving university). 

Just 5% of survey responses were received after 23 March this year, when the Australian government introduced social distancing measures in response to the spread of COVID-19, so the results don't reflect the full impact of the pandemic on the economy. 

The headline figures for undergraduate outcomes show that 73% of 2017 graduates were in full-time employment in the short term with a median salary of AU$60,000. In the medium term that rose to 90.1% full-time employment with a median salary of AU$75,000. 

However, while employment outcomes were similar for males and females, salary outcomes were not. In the short term, the median salary of male 2017 graduates in full-time employment was AU$62,600 compared with AU$60,000 for females. Three years later, for the same cohort, the pay gap widened significantly to AU$80,000 for males and AU$73,100 for females. 

Study areas with the largest gender pay gaps after three years included architecture and built environment, health services and support, social work, nursing, and business and management. 

Employment outcomes by field of study appeared to support the theory that graduates who study generalist degrees in arts and humanities tend to have weaker employment outcomes in the short term. But that gap narrows over time as employment rates increase for these groups in the medium term. 

Meanwhile, in the short term 40.9% of 2017 graduates in employment reported that they were not fully utilising their skills. This dropped to 26.7% three years after graduation. 

Japan looks to entice international student entrepreneurs 

The Japanese government hopes to encourage entrepreneurial international students to stay in the country after completing their studies by offering a two-year transitional visa for those who want to start their own business, reported Nikkei Asian Review in September. 

Previously, foreign students wishing to remain in Japan to launch a new venture would have needed a Business Manager visa, which requires that the business already has an office, at least two workers, and five million yen in capital. 

In some instances, graduates from top universities tend to be less friendly, are more prone to conflict, and are less likely to identify with their team.

Are graduates from lower ranked unis better team players? 

If you're a recruiter struggling to choose between two equally matched candidates, who gets the job? Do you opt for the graduate who attended a more prestigious university? It's a simple way to make a tough decision.  

But it's also a double-edged sword, according to research reported by the Harvard Business Review in September and originally published in the European Journal of International Management. The study observed the performance over two months of 28,339 students across 294 universities in 79 countries as they took part in real-life business consulting projects.  

Those from higher-ranked institutions did perform slightly better overall while commanding higher salaries. However, the evidence also suggested that they focused on completing tasks to the neglect of interpersonal relationships - which are more important than ever in an era of remote working. 

'In some instances, graduates from top universities tend to be less friendly, are more prone to conflict, and are less likely to identify with their team,' the authors wrote. 

They recommend that before hiring a graduate, recruiters should determine whether the job requires 'a top performer from a higher-ranked university where even a 2% improvement in performance is critically important' or whether the 'performance criteria can be met by graduates from lesser-ranked universities'. 

Further reading

In July The Economist examined how universities are driving regeneration in Rust Belt cities of the American Midwest. 'Not all graduates hang around their alma mater, but cities that keep them outdo rivals,' the piece argues. One example is Pittsburgh, 'a once-dying steel city now nicknamed 'Roboburgh' for a boom in robotics, artificial intelligence, self-driving cares and biomedical research'.

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