Hollywood continually brings new expressions into pop culture. “Toto, I’ve got a feeling we’re not in Kansas anymore.” “May the force be with you.” “Show me the money!” This time of year, “Plastics,” the memorably benignant career advice young Benjamin Braddock receives in The Graduate becomes personal to millions of college students engaged in graduation exercises – the hallowed ritual when diplomas are handed from faculty to student.
My recommendation to any young person who cares to listen to my underappreciated wisdom (my children are 21 and 18) is to enjoy the ceremony, because the next step, entering the workforce, can be a bumpy ride. In 2015, “just 14 percent of college seniors [had] steady, career-type jobs lined up for their lives after graduation. Thus, 86 percent of America’s college grads — about five out of every six — have zilch in the way of career prospects for their post-campus lives,” according to the website, The Daily Caller.
Much has changed in 50 years since The Graduate made plastics a metaphor for career success. Today, Finance has become the new plastics – at least for B-school graduates. Last year, people holding newly-minted undergraduate finance degrees from the University of Virginia’s McIntire School of Commerce were awarded average compensation of around $93,000 (compensation includes base salary, signing bonus, and annual bonus). That amount topped every business specialty, according to the 2015 McIntire Commerce Career Services 2015 Destinations Report. Not bad, considering the anodyne titles attached to the offers, including Financial Analyst, Sales and Trading analyst, and Consultant. (Disclosure: I am a McIntire alum.)
The report provided the following compensation information regarding job acceptances among the school’s graduating students (The figures for 2015 are on the left, adjacent to the corresponding 2012 compensation):
Finance__________________$92,932 / 81,117
Consulting_______________$78,557 / 71,633
Operations______________$77,417 / n/a
Information Technology_$66,500 / 67,133
Accounting______________$58,000 / 57,423
Marketing/Sales_________$54,062 / 52,762
Approximately 345 students graduated in 2015.
The numbers provide interesting comparisons: Finance comp increased 14% from 2012, while IT remained basically unchanged. Consulting had a handsome 10% gain. Marketing / Sales pay rests melancholically at the bottom of the heap in 2012 and 2015, with average comp improving only about 2% during that period. At least it didn’t decline. But on average, a graduate entering Marketing / Sales in 2015 got 72% less coin than one entering Finance. Odd, considering that Biz Dev professionals – long stereotyped as aggressive and money-driven – aren’t known for accepting delayed pay gratification.
But beyond superficial comparisons, professional trend-spotters will struggle to extract meaning from the Destinations Report. The findings are hard to extrapolate for several reasons. First, year-to-year, different companies recruit from a new talent pool of McIntire fourth-year students (UVa does not adhere to the common parlance of Freshman, Sophomore, etc.). Second, compensation is not the only motivator for accepting a job offer. Third, the compensation reflects the cost of living in the geographic locations where graduates choose to work (In 2015, 92% of graduates took jobs in the Eastern part of the US). Finally, this data reflects compensation on graduation – not beyond. So longer-term, we don’t know the numbers or how they compare.
Still, data from other undergraduate business schools reflect average base salary figures not far from McIntire’s. Carnegie Mellon’s Tepper School, the #7-ranked undergraduate business school according to US News, reported a 2015 average of $73,582, 6% above McIntire’s $69,184. (McIntire was ranked #6 in the same US News survey.) In 2013, Notre Dame’s Mendoza School of Business, the #10-Ranked School, reported an average salary of $58,000. McIntire reported an average salary of $64,666 for the same year. The difference may be attributable to the fact that more of Notre Dame’s graduates work in Midwest cities, where the cost of living is lower than in the East.
All the hype that B2B customers want – demand, really – business-literate salespeople hasn’t produced more demand and better pay for newbie B-School grads choosing that field. As far back as 2010, I thought it would. I have pondered this inconsistency and offer five conclusions:
1. Business Development remains one of the few egalitarian business specialties, where characteristics like empathy, high motivation, communication skills, and personal integrity are strongly associated with success. Since people can gain these skills without attending college, employers hiring business developers don’t consistently require them to hold a degree.
2. Automation has de-skilled sales roles, eliminating some positions, and leaving others to be filled by others willing to accept lower wages.
3. Hiring managers seeking business developers who do have a college degree aren’t willing to pay a premium for B-School graduates over say, job-hungry religion majors. Both require equivalent training and development.
4. Many B-school undergraduates don’t seek sales positions in the first place. Some might recognize the degree that took four years to earn doesn’t ensure adequate earnings in a commission-driven biz-dev role, so they seek jobs with higher base salaries and more security.
5. The personal assets that business developers need to achieve a higher income – including a strong network of connections and tacit sales knowledge – aren’t generally present on graduation, and often take several years to accumulate.
When my kids prepare to graduate in 2017 and 2020, respectively, here’s what I’ll tell them: “Get your engineering degree. Learn how to sell by succeeding and failing. Take intelligent risks. Become an entrepreneur. And if you want to make decent money, don’t go into sales – unless you’re in Finance.”
That’s longer and far less memorable than Plastics, but hopefully, more useful.
Further reading:
