Grads’ starting pay up to 46% higher than diploma holders’

SINGAPORE — Changes may be afoot in the public sector in the way it assesses and rewards employees but, when it comes to starting salaries, graduates still command a significant premium over diploma holders across the public and private sectors.

A survey conducted by management consultancy Hay Group of 95 organisations here found that employers are likely to pay up to 46 per cent more in starting salaries for degree holders than for diploma holders. The respondents comprised largely multinational corporations and local companies, as well as about a dozen government organisations.

The findings of the annual survey, which were released yesterday, showed among other things that the starting pay for those who graduated with Honours (Second Lower) could be 4 per cent higher than employees who graduated without honours, while those with Honours (Second Upper) could get about 7 per cent more.

The average monthly starting salary for degree holders without honours is S$2,741, about 2 per cent higher than the S$2,683 last year. Diploma holders can expect an increase of a similar proportion, with average monthly starting salary going up to S$1,878 from S$1,840 last year.

The difference in starting salaries between the two groups was about S$1,000 across various industries.

The survey also found that 20 per cent of respondents would pay those who graduated from public universities here higher starting salaries — about S$214 more a month on average —than those who got degrees from overseas universities.

About a third would give higher starting pay — about S$195 more a month on average — to men who had served National Service.

Asked why employers continued to place a premium on degrees, Singapore Human Resources Institute president Erman Tan said employers might feel degree holders are easier to train. The private sector is business driven and, where “timing is cost”, some employers may be willing to pay more, he said.

CKE Manufacturing’s Enterprise Development Manager Kwan Li Feng said the company pays degree holders about 10 to 15 per cent more than diploma holders, noting that in his experience, degree holders usually could work more independently.

However, Mr Kwan was open to raising salaries at a faster pace for diploma holders. “In areas such as business, polytechnic lecturers are starting to be very competitive and producing students (of) very high standards,” he said.

Mr Allan Lim, Chief Executive of Alpha Biofuels, said he does not “exercise preferential payment” if the job scope is the same. Asked whether he felt the private sector would follow in the footsteps of the Public Service, he said: “Market forces will drive this. Jobs are getting more complex and the focus now is on skills set ... having just a degree will not make the cut.”

ADDITIONAL REPORTING BY PAUL LIM