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Russian Top Executives Go Back to School

More than one in three Russian CEOs hold more than one academic degree, making them stand out dramatically compared to the general public. By going back to school and pursuing lifelong learning, senior executives expect to increase their knowledge, human capital and income, according to Sergey Solntsev, Senior Research Fellow at the HSE Laboratory for Labour Market Studies.

Studying for a second degree requires a substantial investment of time and money, and just 1% of Russians hold more than one university degree.

However, people in certain occupations are more likely than others to seek a second degree; these include senior corporate executives, of whom 34.5% hold at least two degrees, according to Solntsev who presented his findings in the paper Demand for Second Higher Education: Empirical Evidence for Russian Senior Executives, published in Educational Studies, issue 3, 2015.

Solntsev has analysed the educational paths of Russian CEOs and deputy CEOs, chairs of the Board, heads of major company branches, and other senior executives and found that their first degree was often in engineering, followed by a degree in economics or business. In addition to this, those whose first degree was in engineering or humanities were more likely to seek a second degree compared to those holding degrees in economics or law.

Solntsev reviewed 5,000 cases of Russian top executives (based on corporate appointments data published in Vedomosti between 1999 and 2009) of banks, insurance, manufacturing, service, IT and other large companies located mainly in big cities. In each case, he examined the characteristics such as gender, age, education and career trajectory. Across the sample, he found a prevalence of men (83%). In more than half of all cases (54% men and 57% women), the subjects were aged between 31 and 40, and in a quarter of all cases (21% of women and 25% men) they were aged between 41 and 50 at the time of appointment.

A Second Degree Worth the Effort

Generally, people can upgrade their skills using corporate training programs, university-based courses, coaching on the job and self-study, among others. Solntsev focuses on perhaps the most sophisticated way of learning, i.e. studying for a second degree such as an MBA or a master’s in one’s current or new profession. In contrast to the first degree – often obtained in one's twenties from a university and in a discipline recommended by others – a decision to study for a second and subsequent degrees tends to be more independent and mature and based on one's work experience.

According to Solntsev, corporate executives usually expect a second degree to pay off by facilitating career advancement and bringing about a substantial salary raise. Solntsev also refers to other potential motives, based on the human capital theory (executives seek to develop their human capital by filling the knowledge gaps left by prior education and experience), and the theory of signals (a second degree sends a positive signal to potential employers and thus creates a competitive advantage).

Most Executives Share an Engineering Background

Nearly all senior executives in Russia hold university degrees; about two-thirds hold one degree, and 34.5% hold more than one degree.

According to Solntsev, executives whose first degree is in engineering are more likely to seek a second degree. In Soviet times, the popularity of engineering training reflected the country's emphasis on industrial production, including the military-industrial complex; in contrast, the post-Soviet market economy was characterised by a growing service sector and declining rates of industrial production. Thus, engineering was no longer the most relevant occupation and those with an engineering background required additional skills to find employment in the service sector – which prompted some of them to seek a second degree.

Solntsev's research confirms these observations. The most common first academic degree held by Russian senior executives is one in engineering – a median 46% based on data from both Soviet and post-Soviet periods, 60% of all degrees obtained in Soviet times and just 35% of those earned in post-Soviet times. In contrast, the proportion of degrees in economics increased from 21% in Soviet times to 41% in the post-Soviet period.

Economists Less Likely to Seek More Training

In addition, Solntsev examined the chances of senior executives seeking a second academic degree for senior executives depending on their first degree and the time of obtaining it. He found that economists were almost half as likely to opt for a second degree as holders of degrees in engineering and humanities – 23% vs. 40%, followed by lawyers (28%).

In addition, those with first degrees in engineering and humanities usually studied for a second degree in Russia, while economists and lawyers often travelled abroad to obtain a second degree. Solntsev assumes that the former two groups only required a basic grasp of economics and management and wished to stay in Russia so they could work while studying, whereas the latter two groups sought a more sophisticated understanding of the subjects and were prepared to pay significant amounts to study full time in top international universities.

Table 1. The likelihood of holding more than one academic degree depending on the type and time of the first degree (% of executives with the same type of first degree)

Type of first degree

Just one degree

More than one degree

including those obtained

in Russia/USSR

abroad

Engineering

59.8

40.2

31.9

8.3

Economics

77.1

22.9

10.2

12.7

Humanities

60.0

40.0

24.6

15.4

Law

71.7

28.3

13.0

15.2

Other

50.2

49.8

42.1

7.7

of those holding the first degree since 1991 or earlier

Engineering

63.8

36.2

29.2

7.0

Economics

79.4

20.6

8.3

12.3

Humanities

58.4

41.6

20.8

20.8

Law

67.7

32.3

13.8

18.5

Other

46.9

53.1

44.2

8.8

of those holding the first degree since 1992

Engineering

55.1

44.9

35.5

9.4

Economics

76.6

23.4

10.8

12.5

Humanities

59.1

40.9

27.4

13.5

Law

74.3

25.7

12.3

13.4

Other

55.3

44.7

39.5

5.3

Source: Solntsev's paper

The Quality of Initial Education Can Affect the Need for a Second Degree

It might seem that those who obtained their first degree back in Soviet times should feel a greater need for a second degree as knowledge tends to become outdated. However, research does not confirm this.

Of those with a background in engineering from Soviet times, 36.2% have sought a second degree, compared to 44.9% of those who earned their first degree after the collapse of the USSR, according to Solntsev. He found a similar ratio among senior executives with the first degree in economics (20.6% vs. 23.4%).

According to Solntsev, the reason why more 'techies' and economists with degrees obtained after 1991 opt for a second degree may be a perceived decline in the quality of university education after the collapse of the Soviet Union.

Senior Executives Favour Economics and Business

According to Solntsev, executives' preferences in terms of second degrees may vary; those with a first degree in engineering are more likely than others (54.4%) to choose economics for their second degree, while those with initial training in economics tend to choose a second degree in business (47.2%), and lawyers remain true to their profession and prefer to obtain a second degree in law (35.2%).

62% of all respondents obtained their first degree in Moscow, followed by St. Petersburg (16.7%), and then Novosibirsk, Nizhny Novgorod and Yekaterinburg (more than 1% each). Besides the fact that Moscow has more universities believed to provide a better education, most major corporate employers are also based in Moscow.

The top five Russian universities where senior executives earned their first degrees include the Lomonosov Moscow State University, the Moscow State Institute of International Relations, the Finance Academy, the St. Petersburg State University, and the Moscow Aviation Institute. When it comes to a second degree, the top 5 universities include HSE and Moscow State University.

Table 2. Popular universities for obtaining a second academic degree (% of respondents who studied in Russia/USSR for a second degree)

University

%

 1

RANEPA

12.5

 2

Finance Academy

11.9

3

HSE

5.2

 4

Plekhanov Russian University of Economics

4.4

 5

Lomonosov Moscow State University

4.3

Source: Solntsev's paper

HSE is the only university established after the collapse of the Soviet Union which has made it to the top, the third most popular school between 1992 and 2000 and the second between 2001 and 2009.

Solntsev concludes that most frequently, senior executives choose to go back to school to update their knowledge of economics and finance. In addition to this, studying for a second degree is an integral part of lifelong learning, allowing people to advance their careers and stay up to date with developments in their business.

 

Author: Olga Sobolevskaya, October 05, 2015