There’s a growing disconnect in the workforce that’s hard to ignore, employers are offering higher salaries to candidates with master’s degrees, even though most hiring managers don’t believe those degrees actually lead to better performance on the job.
According to a recent survey by Resume Genius, 72% of hiring managers say they would offer a higher salary to a candidate with a master’s degree. Nearly a quarter of them would increase that offer by 20% or more. Yet 62% of hiring managers believe a master’s degree doesn’t improve job performance. Actually, 10% think it worsens it.
Degrees as Symbols, Not Proof of Performance
It turns out, many employers are still clinging to traditional markers of value. While only 38% of managers say a master’s leads to better performance (that number drops to 35% among baby boomers), the degree still represents ambition, discipline, and potential.
But if employers are spending more money to attract candidates with master’s degrees – and encouraging or subsidizing their employees to pursue them, shouldn’t they be more rigorous in evaluating whether those degrees actually provide value?
The Dilemma
Resume Genius report also found that most hiring managers view a master’s degree as equivalent to two years of work experience. If both a master’s degree and work experience lead to similar job performance, and experience tends to be more cost-effective and practical, why are employers still favoring the academic route?
It’s a question that organizations, especially those with tight budgets or rapidly evolving roles, can’t afford to ignore. If the value of a degree is mostly symbolic, it may be time to rethink how much weight it gets in compensation decisions.
Younger Managers Are More Optimistic—But Is That Enough?
Interestingly, younger hiring managers (particularly Gen Z) are more likely to believe in the value of a master’s degree. Nearly half say the degree improves performance, compared to just a third of older generations. They’re also more likely to offer higher pay to candidates with one.
If employers are putting thousands of extra dollars behind the assumption that a graduate degree leads to higher capability, they owe it to themselves, and their employees, to dig deeper.
Trust, But Verify
In fields like healthcare, government, education, and finance, a master’s is often essential. But in industries such as tech and startups, employers tend to prioritize real-world skills and experience over formal education.
If organizations plan to keep offering higher salaries for advanced degrees, they should also commit to assessing whether those credentials lead to real outcomes—like increased productivity, innovation, or leadership. Without that accountability, they risk prioritizing prestige over performance.
In today’s market, every dollar counts. Before rewarding a credential, employers should make sure it’s worth the price.
