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Bearing of university brand names on the job market

Published on 11th Feb, Edition 07, 2013

 

Universities in Pakistan are governed by the Higher Education Commission of Pakistan (HEC) who is responsible for education policy, quality assurance, and degree recognition, development of new institutions and uplift of existing institutions in Pakistan. Pakistan produces about 445,000 university graduates and 10,000 computer science graduates per year. HEC recognises 132 institutions of which 73 are public universities and 59 are private universities. There are 127 universities in total that are fully functional. Private universities are expensive as compared to universities managed under the government. Private universities have initiatives to revise the course curriculum, introduce new books, launch new degree programmes and groom students to compete with graduates of other universities for limited jobs.

The repute of any university depends on the quality of graduation and history associated with providing education, which is recognised in the market through the alumni. In the domestic job market of Pakistan, universities are classified under three tiers i.e. Tier 1, containing the best universities followed by Tier 2 which are generally considered by students in case they fail to secure admission in Tier 1 universities. Tier 3 universities are viewed to be the last option for a student in case they do not get admission anywhere else. Tier 3 university graduates receive a monthly starting compensation atleast 50 percent lower than what is offered to Tier 1 university graduates.

The job market in Pakistan is tough and career-oriented jobs are hard to find. Even if a student graduates from a top tier university faced tough competition from the graduates of their own university and to those who come from universities in other cities and international graduates. The best of the best are the only graduates who in today’s environment are offered above market compensation followed by secured jobs. Top tier university graduates generally compete head to head with other universities of the same stature. To put things in further perspective, graduate of a Tier 1 university would be offered a starting compensation of Rs 65,000 to Rs 80,000, Tier 2 would be offered Rs 35,000 to Rs 45,000, Tier 3 would be offered Rs 15,000 to Rs 22,000.

There was a time not to long ago that some multi-national companies used to explicitly advertise the university graduates they preferred. As this falls under open discrimination, this practice is no longer witnessed although the internal policy of the company would be to higher graduates of specific universities. There are companies and financial institutions who have prepared list of universities which will only be considered for the management trainee programmes. In multinationals, specially talking about FMCGs, university brand is the key to get a job in Brand Management. There are also companies and financial institutions who consider graduates from every university, however, at a different compensation plan. Therefore, Tier 1 graduate would be offered a starting salary of Rs 65,000 whereas a graduate from a Tier 3 university would be offered a starting salary Rs 25,000 against the same job and same position and same department.

The hiring decision is also depend on the strength of the alumni of a particular university in one business area. The alumni generally are more supportive of hiring graduates of the same university and offer compensation above market.

 

If we simply take examples of IBA, LUMS, GIK and AKUH to name a few, these universities are known for stringent curriculum, faculty and quality graduates. History and market reputation of these universities have developed over time and today are known to be premier universities for a career. University graduates of these universities are offered the highest average compensation as compared to market. The challenge resides with graduates of other universities to have the capacity and resume having to compete with graduates of Tier 1 universities. Therefore, competition to find a career opportunity in a multinational or a well renowned bank or an FMCG becomes a major challenge.

It is also said that if all universities have the same curriculum, follow practically the same books, why is it that a graduate of one university is preferred over another. The answer lies in the faculty and intake of students who have the drive and passion to excel and acquire knowledge beyond what is given in books to be able to compete in the market. It is also said that if you pick up the top 5 percent graduates of Tier 1 and Tier 2 universities, they are all the same. However, the challenge faced in the job market is that who can sell their university brand name at the best.

University brand names not just in Pakistan but globally have strategic importance for companies. Banks in New York like Merrill Lynch, Goldman Sachs, Morgan Stanley, JP Morgan, Citi Corp are just few names who would only hire graduates of Ivy League universities for their Investment Banking division whereas graduates of other universities are hired only for operations and support functions. Additionally Ivy League graduates are offered a starting compensation more than USD 100,000 per year whereas those in support functions receive between USD 60,000 to USD 70,000 per year. There are companies in Pakistan where key position in the front office/business function is held by graduates of IBA and LUMS or graduates of international universities. Graduates of Indian Institute of Technology (IIT) and Indian Institute of Management (IIM) command the highest salaries in India and are offered jobs at key strategic positions both domestically and internationally.

The higher education in Pakistan grooms to have a exhilarating career domestically, however, none of these universities fall under top 100 of the world, IBA has aggressive plans to build university ranking to top 100 within five years. Focus on research is becoming more and more important where graduates are encouraged to peruse Phd Faculty who have years of industry experience and can teach beyond books command the highest compensation in education. We could only hope that universities in Pakistan independently try to be among top 100 universities in the world so that international graduates choose Pakistan to acquire education. The vision is to make every university a Tier 1 university in Pakistan.

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