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Is Education still the Great Equaliser?

Paul Matthews, ITP chief executive. 06 October 2017, 4:19 pm
Is Education still the Great Equaliser?

There's been a lot of discussion over the last couple of weeks about degrees, and whether those looking to get into the IT industry should still consider a tertiary qualification as a good pathway to get there.

While a degree has seldom been a hard and fast minimum requirement for working in IT, a number of companies have now signed an open letter, led by an alternative education provider, explicitly stating it's not. That's all well and good however this has been interpreted and reported by some media as a statement that young New Zealanders shouldn't bother with qualifications anymore.

So where does the truth lie? Is a degree a waste of time and money or a great pathway to setting up a career in IT? We thought we'd take a look at the objective data to find out.

ITP has long supported the notion that there are lots of great pathways into our profession - the more the better. Many who work in our industry aren't degree qualified and that's completely okay. In fact, the last 3 ITP Presidents didn't have IT degrees either (albeit one had a law degree), and as the professional body in IT, a degree is not a requirement for membership or our certifications.

But things are a little different for many people entering our industry now versus the previous generation of IT Professionals. Previously, there simply weren't good qualification options for computing. Others moved, and continue to move, "sideways" from other occupations almost accidentally ending up in our industry. Others still started in junior roles without a qualification and moved up. Some came through via a degree, diploma or other qualification.

All of these pathways are great - as with many things, it's clearly a case of different strokes for different folks.

The great news for those looking to enter the industry these days is there are far more options than ever before. There are now a host of great industry-aligned degree programmes from the nation's Universities, Polytechnics and Institutes of Technology, a new range of updated Diplomas available across the country, and a host of alternative education options as well. At the degree end, there are heaps of choices including traditional Computer Science degrees, practice-aligned Software Engineering degrees, industry-aligned Applied IT degrees from Polytechs and Institutes of Technology, business-focused Information Systems degrees (in various flavours) and a host of specialist majors coming out all the time.

But is a qualification a good option for young New Zealanders looking to enter our profession today? After all, it takes a heap of time and isn't exactly cheap. Around three quarters of eligible students end up with a student loan, averaging around $21,000 of debt each.

There's a lot of rhetoric about the pros and cons, with various employers and others making all sorts of statements about degrees and qualifications. The latest is an open letter saying there are some roles that don't require qualifications. Unfortunately, the non-specificity of this campaign has caused a fair amount of confusion, with some media reporting that it was our industry saying degrees were no longer valued and leading to many concerned students and parents.

The problem is there isn't much hard data going into the conversation. So we thought we'd commission some detailed and objective custom data from the last Census, sourced through Statistics New Zealand, to get to the bottom of the value industry places on degrees once and for all. And interesting it is.


The evidence

I should be very clear that the data is about "ICT Professionals" using the relevant ANZSCO occupational codes. This means it includes technical roles (eg Business Analysts, Developers, DBAs, SysAdmins, Security Specialists, Network and Systems Engineers, Test Engineers, etc) but excludes IT Managers (which are grouped separately). But there's nothing to indicate the pattern below doesn't hold for these roles.

There are another 7,536 vocationally-based "Support Technicians" (almost all being ICT Customer Support Officers) as well. These fall within our wider definition, however we've focused on the 40,000 ANZSCO-aligned ICT Professionals occupations as these are the roles people looking at degrees are focused on.

The data looked at the 40,017 ICT Professionals from the census. A number of 100,000 people "working in our industry" is often bandied about, however this is generally "people who work for a tech-related company" (including support staff and other non-IT roles). The actual number of ICT Professionals as per the last census, working both in the industry and elsewhere, is 40,017.


The majority of IT Professionals have a tertiary qualification 

Of all of those working in New Zealand primarily as an IT Professional, 76% have a tertiary qualification and just 24% don't have any tertiary qualification at all. 


Of those with a tertiary qualification, 27% have a sub-degree qualification (eg a Diploma or Certificate), 50% have a Bachelors Degree alone, and 23% have a post-graduate degree as well (such as a Post-Graduate Diploma, Masters or PhD).


Interestingly, this is the total number working in the industry with qualifications, but masks the fact that an even higher portion of people entering the IT industry today are qualified. In fact, depending on whose stats you use, between 85% and 92% of people entering the industry today have a qualification of some sort.


Those with degrees are in the highest demand by industry

The market for skilled employment is, ostensibly, a supply and demand market. And as with any supply and demand market, price becomes a proxy for demand. Thus, to look at whether employers really value qualifications (or rather, the skills those with qualifications gain), we can look at average income for those with and without a degree in the same occupations while keeping all other factors the same. This is where the Census data comes in.

And this is where it gets interesting. IT Professionals with a Bachelor-level qualification earn, on average, 17% more than those with no tertiary qualification - that's an average premium of over $10,000 per year that employers are paying for those with a degree. Add another $5,000 per year for those with post-graduate qualifications.


This pattern bears out across almost every income level. For example, someone holding a Bachelors degree or higher is 1.5x as likely as someone without a tertiary qualification to be paid in the $150k+ category.

Again, this is averages only - plenty of people without degrees earn more than lots of people with degrees, and a lot of it comes down to the individual person of course. But nevertheless, as a generalisation it shows a clear premium being paid to those who hold degrees.

Obviously we need to dig a little deeper than just the numbers. Why are those with degrees being paid more than those who aren't, on average, for similar occupational roles?


Why are they paid more? 

It's very unlikely people are being paid more "just because" they have a degree. Some employers structure their progressions that way, but very few in New Zealand outside educational institutions and a very small number of large multinationals do that.

The key point often missed in this conversation is that Education and Training are not the same thing. The purpose of a degree isn't just to get you your first job. Or to put it another way, those with a degree have undertaken at least 3 years of intensive study, reflection, learning and in-depth research - and that means something more than the core technical or other skills they might graduate with and take into day 1 in industry.

As Martin Luther King, Jr said:

"The function of Education is to teach one to think intensively and to think critically"

It's no coincidence that intense and critical thinking are some of the most highly valued skills in our profession, so it hardly comes as a surprise to find that our industry puts a high value on them. $10,636 per year on average, to be precise.

And again, this isn't to say that those without a degree can't or don't think intensively or critically. Just that one of the key outcomes and objectives of a degree is to help you do just that, and this is likely one of the key reasons for the discrepancy in average salary levels.


Is having a "No Qualification Required" option a good idea?

By and large, yes. The fact is, there are many pathways into the industry and while a qualification is the road most travelled currently, that doesn't mean that other pathways aren't of value - they are. And there are people out there, without a qualification but with good experience that this will really help.

The concern that several people have expressed to us isn't so much about making it clear that a degree isn't a minimum requirement for some roles (as has always been the case). It's more that the campaign might send a signal to young New Zealanders, looking to get into our industry, not to bother with a qualification. Of course a qualification isn't the right pathway for everyone, but the evidence shows it's still the best pathway for many.

The particular campaign mentioned above includes an additional "no qualifications required" search filter on TradeMe, oddly under an "Experience" drop-down, however only 78 out of the 20,784 jobs listed as of today are shown in that section (less than half a percent) and mostly from the same half-dozen companies. It would appear that while some employers are happy to confirm that a degree isn't a hard requirement for some roles, most aren't actively racing out to advertise which roles these are.


In Summary

A degree or other qualification absolutely isn't for everyone. However, IT is a profession and the evidence shows clearly that employees that are qualified are in demand by industry. That's not to say that a degree or other qualification is essential - it's not. But it remains the most well-travelled pathway into our industry.

The critical thinking and analysis skills that are honed as part of good formal education are in demand. Education improves people, but no particular educational pathway is right for everyone. But nevertheless, a degree remains a good pathway into a great career.

The objective evidence clearly shows that education continues to be the great equaliser.


P.S. There's more information about what to study on the TechHub website.


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