Stanford graduates ranked ninth for median starting salary and 16th for median mid-career salary in national university rankings released by PayScale on Oct. 24.
PayScale, an online resource for employers and potential employees, compiles global research about compensation. The company seeks to enable workers to assess their potential salaries with respect to their skills, education and experience. The company, created in 2002, claims to hold the largest collection of online compensation data in the world.
“I thought Stanford did pretty well in the survey,” said Stanford Career Development Center (CDC) Director Lance Choy in an email to The Daily.
Choy said he is unsure what meaning to attribute to the ranking and asked, “[Does this reflect] something about the quality of the school? About the impact the alumni have on society? About the number of alumni who pursue public service opportunities?”
Choy noted that this was the first attempt that he had ever seen to compare the starting and mid-career salaries of alumni from different schools. He said that PayScale, like all rating systems, has problems specific to its methodology.
When the CDC conducted a similar survey of 2010-2011 graduates across disciplines, with 303 recorded respondents, its results were lower than those predicted by PayScale’s ranges. The most dramatic discrepancy was between graduates holding a bachelor’s degree in biology. PayScale’s upper limit was $124,519 greater than that reported in the Stanford survey.
Stanford reported an average starting salary of $54,951 for students graduating with bachelor’s degrees in the humanities and sciences, with $72,148 as the average starting salary for students graduating with bachelor’s degrees in engineering.
PayScale’s results for 2011 calculated the average Stanford graduate’s starting salary at $58,200 across all disciplines. The University ranked 16th, behind the Massachusetts Institute of Technology, the California Institute of Technology (Caltech) and Loma Linda University, which placed in the top three spots, respectively. The median mid-career salary of Stanford alumni is estimated at $112,000, in ninth place behind Princeton University, Caltech and Harvey Mudd College.
“I suspect that Stanford has a lot of alumni who have started companies, sold them and moved on to other things,” Choy said in reference to those graduates who are not represented in these studies. “Are entrepreneurs likely to participate in this survey? Does the survey measure accumulated wealth, not just income?”
In examining the salaries of employees, Payscale did not consider stock compensation, retirement benefits and other non-cash benefits. PayScale defined starting employees as those who have five years, or fewer than five years, of experience and who hold no more than a bachelor’s degree. A mid-career employee is a full-time worker with at least 10 years of experience in a single field, also holding no more than a bachelor’s degree. Along with these factors, PayScale must take into account the fact that its data is self-reported by those who chose to take the PayScale employee survey.
“In general, the main trend we’ve seen in our college salary data is that pay is going down over time,” said Katie Bardaro, lead research analyst for PayScale, in an email to The Daily. “Pay for the top 20 schools fell 2.8 percent from last year and over five percent from 2008 (the first report). This same trend exists for Stanford, but to a lesser degree.”
Other sites, however, report significantly different statistics for Stanford and its peers. Forbes ranked schools based on alumni salaries predicted by student academic backgrounds in a 2010 study. Stanford ranked third behind Williams College and Dartmouth College, despite Forbes’s use of PayScale to determine average salaries.
“Our top three schools would top any ranking based on alumni earnings, even without controlling for background,” Forbes posted on its website.
A report from CNBC entitled “Colleges That Bring the Highest Paycheck 2011” also ranked Stanford ninth, sporting the exact same figures that PayScale collected.
While other rankings refer to PayScale’s data, Choy noted that the numbers are just that-numbers. He asked, “Does this reflect happier, more satisfied alumni?”