Are university degrees still important?

WE’VE all heard Bill Gates’s story. Dropped out of Harvard after 2 years, founded tech giant Microsoft, clinched the title of world’s wealthiest person for decades. He also became poster child for the dropout-to-billionaire trope, paving the way for the likes of Facebook’s Mark Zuckerberg, Twitter’s Jack Dorsey, Michael Dell of Dell and the late Steve Jobs of Apple. Their stories showed that there is more than one path to success and inspired many to forge their own.

Textbook knowledge and formal education play a large role in some professional industries such as medicine, engineering or law. But for others, the recent rise in online learning platforms such as Udemy, Coursera and LinkedIn Learning provide an alternative route to learning. Moreover, entrepreneurship in Singapore has also grown rapidly, with the number of startups more than doubling over the last decade to an estimated 55,000, according to the Economic Development Board (EDB). As options for young talent continue to broaden, do university degrees still hold the same relevance and merits?

According to Dr Andrew Kenan Rose, Dean of National University of Singapore (NUS) Business School, degrees are still pertinent to many companies looking to hire new talent.

He says: “The vast majority of medium and large size companies, and certainly multinationals - the places that our students want to go - they need broad-based experience and broad-based knowledge, and that’s where their degrees get them.”

“Our graduates are valued because they work hard, they’re smart, and they have a good understanding of the entire breadth of a business. We’re certainly not saying this is the only path to success, but to many companies the stamp of an NUS business degree is a signal of quality,” Dr Rose adds.

To remain relevant, the school often gets feedback from private sector firms, applying them to the curriculum “as appropriate”. He notes that there has been much talk on digital marketing and fintech of late.

For fast-moving consumer goods (FMCG) giant Unilever, university degrees are important for the company. 

“For our early careers fresh graduate hires, a majority of them would possess a university degree. For our experienced or mid-career hires, we’re more focused on their past and recent experiences rather than their accreditations,” says Trang Nguyen-Tam, head of human resources at Unilever Singapore.

Forming networks, developing skills

Beyond just a badge, a university education can open doors to “real world” experiences such as internships and group projects involving actual companies. For example, Unilever’s 3-month Leadership Internship Programme, 6-month Gen-Next Internship and 2- to 3-year Future Leaders Graduate Programme are catered only to university students. The company currently does not have programmes for diploma fresh graduates.

That said, Nguyen-Tam notes that Unilever is currently exploring partnerships with polytechnics around Singapore. It partnered with Republic Poly students on their final year project in 2019.

In professional services, KPMG’s hiring practices focus on finding talent to meet or exceed its “highly insights-driven and reliant on strategic foresight” job expectations. Some 85 per cent of its 3,200 employees in Singapore are degree holders - they make up auditors, tax and advisory consultants and professional staff in human resources, finance, marketing and IT. 

“For those who are diploma holders, they are typically attracted to technology careers in our firm, bringing with them valuable industry experience, deep subject matter expertise and even professional certifications,” says Janice Foo, head of people at KPMG.

“Fresh recruits who join the firm, whether as degree holders or diploma holders, can expect to receive an average of up to 80 hours of professional training each year as part of KPMG Singapore’s career development roadmap. To recognise the quality of our employees, KPMG audit and tax professionals who attain the professional qualifications of either Singapore Chartered Accountant or Accredited Tax Advisor also receive up to 10 per cent increase in their salaries,” she adds.

More than online learning platforms, universities also provide ample opportunities to network. Dr Rose says: “Most people meet future business partners, or for that matter, future romantic partners, at university. And forming your network is a critical thing that we take seriously.”

A curated learning environment also allows students to develop their social skills, exchange ideas and learn from different perspectives, adds Ang Wan May, managing partner for Singapore at global leadership advisory firm Egon Zehnder. For many young people who are unsure of what they want to do, university can also help them figure out their interests.

She adds that in a competitive market where employers are spoilt for choice, when two people share very similar portfolios, a degree could become the deciding factor. This is true at the start of their careers, but much less so at the senior management level. For leadership positions, the focus shifts away from technical skills and towards leadership qualities.

“As a leader, you have to learn how to express a vision, how to understand and motivate the person in front of you, how to treat people with dignity and respect and have their interests at heart,” Ang said. These can be learnt both in and outside of the classroom.

A wage gap still exists

According to the 2021 Graduate Employment Survey (GES) and the 2021 Polytechnic GES, business graduates from polytechnics earned a median gross monthly salary of S$2,300, while those from universities earned a median S$3,723.

The gap is largest among information technologies (IT) and digital technologies graduates, with diploma holders earning a median of S$2,600 and degree holders earning S$5,000 in 2021. The sizable disparity might encourage more polytechnic graduates to enrol in universities.

In 2020, the 6 autonomous universities in Singapore saw intake rise for the 10th consecutive year to 20,976 students. Among them, 3,378 are enrolled in business & administration, making it the second most popular course cluster after engineering sciences with an intake of 5,225 students. 

Singapore universities also admitted about 1,000 more students per year in 2020 and 2021. Some students who were planning to study overseas saw their plans disrupted by the Covid-19 pandemic, while a number of polytechnic graduates opted to study instead of work on account of the weakened job market. ​​About 30 per cent of polytechnic graduates enrolled at local universities in 2020. Singapore Institute of Technology (SIT) took in about 2,900 undergraduates, of which about 90 per cent were from polytechnics.

Shifts away from degree-based hiring

Having gone through the university route himself, Saison Capital venture capitalist Looi Qin En admits that a prestigious degree can bring about many advantages because they are often associated with “positive traits”. However, he notes that degrees are not an accurate reflection of a person’s ability.

He says: “The challenge with universities is that they provide very foundational education that caters to the masses. But being able to apply that knowledge to a real world setting and contextualise it to a particular company or industry, that is very much on the individual. It’s hard to teach in schools.”

After 9 years of experience in the startup space, he has noticed that among startups and small and medium-sized enterprises (SMEs) there has been a shift away from degree-based hiring. Instead, founders are more concerned with people’s previous experiences and current abilities.

“What skills do the potential employees have? How can they prove that they possess those skills? What have they achieved? These questions seem to be the main concern these days”, Looi says.

In some cases, forgoing university education in favour of experience and work opportunities are not just accepted, but actually encouraged among hiring managers, he adds. “For those short of work experience, what are some projects that they’ve worked on outside of school? How have they taken the initiative to apply the knowledge in a practical way, beyond just regurgitation in an exam? This, to me, is a much stronger signal of outcome because it shows initiative.”

Working hands-on with many companies, Looi saw that firms which have hired non-degree holders and seen that they can perform equally well or even better than their degree-holding counterparts were more willing to forgo degree requirements. He believes that this will in turn lead more people to question the value of investing time and money in a degree.

For Ernst & Young (EY), an ever changing business landscape means focusing on upskilling and reskilling its workforce. 

EY Singapore, Brunei, and Asean regional managing partner Liew Nam Soon says: “We seek talent who are intentional about their careers. This includes degree and non-degree holders.” He adds that the company provides learning opportunities for “future-focused skills” such as data visualisation, data science and artificial intelligence.

In real estate, Ismail Gafoor, founder and chief executive of PropNex Realty, says that a university education is “not at all” necessary for agents to succeed. Among the company’s large pool of agents, Gafoor notes that he has seen many non-degree holders outperform university graduates.

He says: “Real estate salespeople require a huge amount of interpersonal skills and drive to work, past office hours and even on weekends and public holidays. Therefore, a college education will not necessarily be the tipping factor for success.”

“Be it a poly(technic) education, a university education, or a course about social media or data analytics, anything that one does to gain greater understanding is valuable and worthwhile,” EZ’s Ang adds.

She notes that not everyone has access to formal education or digital courses. She believes that people should focus instead on self-directed learning. 

“Continued learning can look like saying yes to new things, thinking through a way to add value to the community, looking outside of your current industry, or asking for feedback,” Ang says.

Turning a different corner

In the lion city, dropout-to-success storylines are not uncommon.

Lester Li, founder of King of Fried Rice, left the formal education system in 2013. A Normal (Academic) stream student at the time, he felt that his time would be better allocated to developing his cooking skills.

“If I had gone through the traditional education route, I would have just graduated uni,” says the 25-year-old. Instead, he currently heads an over-20-outlet food and beverage (F&B) chain. However, Li emphasises that taking risks will not lead to success if not met with upskilling and hard work.

Rachel Lim, co-founder of fashion brand Love, Bonito, adds that some of the “most important” skills that she has learnt - self-leadership, self-awareness, emotional intelligence, how to manage people, how to grow a business - were all acquired outside of the classroom.

“I’m constantly learning today through reading books, listening to podcasts, and learning from experts in the field. Education does not stop even when school ends,” she says.

In entrepreneurship, she believes in testing waters before taking that leap of faith. Lim had already been working on her online business for 5 years before deciding to leave The National Institute of Education in her final year to pursue the project full time.

“I wanted to strike while the iron is hot because there was already good momentum being built in the business. I feel that I would definitely have lost the opportunity if I were to complete my education and wait 1 more year. It was a long- and well-thought-out decision, I truly listened to my instincts to make the move.”

Whether it is from romanticised depictions of entrepreneurship in the media, or societal expectations to excel academically, Lim believes that there is equal pressure on both sides to either enrol into or leave university.

She says: “At the end of the day, our journeys are all unique and special. And success looks very different for each of us. All I can say is, don’t let the voices of others drown out your inner voice. Tune in and listen to yourself.”