Fewer PhDs Can Benefit Business

scholarToday, many graduate schools are watching something unfold that they have not seen in decades: declining interest in graduate programs. The latest national data, released just last week by the Council of Graduate Schools, indicates that there has been a 4.3 percent decrease in applicants to graduate schools over the past year. But what does this mean for businesses looking to recruit top talent? For the most part, the decline in PhD applicants is actually good news for business.

PhD Programs Report Higher Declines than Master’s Programs

First, as reported in the Chronicle of Higher Education, we may not be facing a crisis yet: “The drop appears to be sizable, but it’s too soon to tell whether it’s a blip or a trend. Council officials warned against making too much of one year’s data. Doctoral applications, for example, increased at an average annual rate of 0.2 percent when the lens is broadened to the five-year period from 2010 to 2015 — not impressive but not indicating an impending crisis, either.” As also reported in this week’s Chronicle of Higher Education, it is important to note that not all graduate programs are even impacted: “The picture is rosier for master’s, graduate-level certificate, and education-specialist programs. Applications for those programs increased by 3.8 percent from 2014 to 2015, and at an average annual rate of 4.8 percent from 2010 to 2015. That isn’t too surprising, either: Master’s programs are proliferating and often viewed as cash cows for colleges.”

What we are seeing, however, is a major shift in applicants’ confidence about the value of a doctoral degree. High debt loads, low stipends for doctoral students, limited full-time work for people graduating from PhD programs (especially in the humanities), and low pay for PhDs across fields (at least for those who choose to stay in higher education rather than pursue higher paying jobs in the private sector) are at the root of potential applicants’ concerns.

The Impact of Fewer PhDs

bookOn the one hand, in many industries, relying on universities to train workers has long been a contested topic. There’s a general consensus in many industries, including the high-tech sector, few university programs do a decent job preparing students for industry. Most universities can introduce students to specific skills but few offer them adequate opportunities to put theory into practice.

Of course, when one is faced with a decline in the number of students pursuing PhDs, the situation is a bit different. The decline is not impacting a high percentage of future workers but rather a select few and among them, the smartest and most self-motivated individuals–people with a love for research, even esoteric research, and a desire to make truly new discoveries. Historically, the best way to engage in such work was to go to graduate school. Four or five years in a PhD program with a livable stipend and access to a lab or world-class library system is a great way to engage in research that one may otherwise never be able to pursue.

How Businesses Can Benefit

The good news is that as the exceptional individuals who have historically pursued PhDs start to jump ship before ever showing up, businesses have much to gain. The question is whether or not they can truly tap into what this talent has to offer.

First, the type of person who would have pursued a PhD in the past who is now on the job market is likely not someone interested in an entry-level position. They are likely someone who would love to be working on a sustained project with a lot of independence and decision-making power.  In essence, the challenge is to find a way to hire these individuals at an appropriate level (not too low or high up the ladder in terms of position and compensation given they they are still early career) but to provide them with the conditions that offer some of the things they are missing by not pursuing a PhD (e.g., time and space to engage in innovative projects with a relatively high degree autonomy). While this may mean rethinking organizational hierarchies to some extent, the payback promises to be high if the talent you’ve recruited can bring the energy and experimentation they might have brought to a lab at MIT or Standford to your organization instead.

Developing mentorship programs (even in collaboration with local university faculty), creating on-site research groups, and encouraging young researchers on staff to continue publishing in refereed contexts is one way to tap into some of the talent now opting out of the PhD.

September 16, 2016   Updated :September 16, 2016      

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