Students, parents, and educators alike are all looking for the best college ROI (return on investment). The secret to a big education return is the same as with any other investment: buy low, sell high.
In other words, the money you put into acquiring skills should be less than the payoff for those skills in the job market.
Businesses already think in these terms, and students and workers should, too. For several years the momentum – and the money – have appeared to be with shorter, intensive courses that enable people to pick up specific job skills that either augment their traditional college learning or help people start over in another field that promises to pay more.
For example, a graphic designer in Texas can command a salary premium of more than $17,000 per year if she or he goes to a coding “boot camp” or community college to learn HTML5. Boot camps might cost $10,000 or even $15,000, which at worst means a one-year college ROI.
There’s an ongoing shakeout in the world of these “boot camp” style courses. But the basic math for college ROI and the education investment still applies if you’re thinking about a acquiring a skill to make yourself more employable. The lesson? Learning is arbitrage – power that can be exercised in the marketplace. The trick is knowing what the market wants. People who do that are finding their investment of money and time can pay off far beyond what they put in.
Let’s look at somebody with a B.A. in psychology. Burning Glass Technologies analysis shows their average entry level earnings in the jobs traditionally open to psychology majors will be $42,206. Add statistics and data analysis skills and you open up a new range of jobs and increase the college ROI, with the salary number rising to $68,788. Interesting, if you add HR skills, their entry level salary rises only slightly, to $44,539, indicating it’s important to have one’s finger on the pulse of the market.
For liberal arts graduates, traditionally the butt of jokes regarding their job prospects – Starbucks, anyone? – it turns out that if they can acquire specific skills that will greatly enhance their ability to land a job.
We estimated there were about 950,000 jobs open to liberal arts graduates. We identified eight skill sets that liberal arts graduates can develop through a modest amount of coursework, such as a minor or online training or internships, that double their job prospects. IT networking and support, for example, can get them a $1,058 premium – and gives them 66,429 more job postings from which to choose and improves the college ROI.
Sales skills, always valuable, added 567,855 postings. General business skills command a $11,144 premium and give the graduate a choice of 577,787 postings. Social media skills offer a $3,424 premium with 399,577 postings. Data analysis and management skills bump the premium up to $12,703, with 136,757 postings. The premium for marketing skills is small, $336, but the number of jobs isn’t: 359,916. Graphic design skills will get people offered $9,188 more on average, with 134,090 postings.
And again, IT skills seem to win: computer programming skills command a $17,753 premium, though with 52,822 postings.
Clearly, these are lessons for those in school or about to attend who are thinking about their college ROI. All these skills can be picked up with a specialization or concentration in college, or by going to coding schools or online courses during summer breaks or after graduation. So just a little extra effort pays off big.
To automatically receive notifications of future blogs, research, and labor market content, sign up at https://www.burning-glass.com/new-research-content-list-signup/.
If you’d like to start learning more about how labor market information can work with your college students to help build a better workforce, give us a call and start a conversation or fill in the form at burning-glass.com/speak-to-a-rep/.