The Chartered

CA Final AUDIT COMPILATION

Experience Or Education: Which One Lands You The Job?

Take this scenario: Bob and Joe are both applying for the same job. They each interview well, but Bob has 15 years experience and no college degree, and Joe is fresh out of college with no experience. Who gets the job? The answer is: it depends. Here are some factors to consider when it comes to the duel between education and experience.

Career Field

There are some careers where experience trumps education, and vice versa. In sales for instance, having a track record of dollars brought into the company will far outweigh any degree. Likewise, in a high-tech field, a recent college degree that consists of studying the latest developments might give you a leg-up over the guy with the experience in your field. Vocational fields like construction will value experience over education for obvious reasons. Your chosen career field will dictate how education and experience stack up against each other. (Learn about the bigger picture in How Education And Training Affect The Economy.)

Reputation
Not all experience or education is created equal. A degree from a top school in your field will open doors simply for its reputation; a degree from a college with a lesser reputation won't help you nearly as much. Did you earn your degree while working full time? That gives you a reputation of being a dedicated hard worker willing to make sacrifices - a reputation that will help you when you sit down to interview for a job.

When it comes to experience, reputation is just as important: simply clocking 40 hours a week for 15 years isn't going to win you any points. How did you add to the company's bottom line? Did you innovate, win awards, bring in new business, promote? Reputation matters when it comes to both education and experience.

Company Policy
Let's say Bob with the 15 years of experience is applying for a job within his company - an internal promotion he's convinced he's qualified for. The sad news for Bob is that the job may still go to Joe, fresh out of college with zero experience. Some companies may allow you to substitute experience for a college education, but others have a tougher policy, requiring a college degree, no substitutions. Bob may be the best candidate, but unless he goes to college, he'll be stuck where he is. Also note that certain industries, like education and healthcare, require education to qualify for necessary certification. (Learn more in Should You Head Back To Business School?)

Money, Money, Money
The Department of Labor reports that over the last few decades, employees with a college degree earn roughly 77% more than those with only a high school diploma, making a strong case for a college education. It also reports a lower unemployment rate for those with a college degree: 4.4% for workers with a bachelor's degree or higher, versus 10.8% for those with only a high school diploma.

Does this mean you should sign up at the nearest college? Not so fast - college debt is on the rise, with many college graduates struggling to pay their ballooning student loans. The cost of a four-year degree at a private college runs over $25,000, with public college setting you back about $6,500, plus opportunity costs. Consider your career field, the college's reputation and your finances carefully before committing.

Solutions
So what to do if you lack education or experience? For college grads, interning offers a great opportunity to get that experience and show you're willing to invest into your career. Likewise, volunteering can give you a resume boost; look for positions that will give you the experience you need, even if it's not in your field. (Learn more about building up your experience; read Internships: Find The Best One For You.)

If your resume lacks in education credits but you can't commit to a four-year degree, look at taking classes in your field to show that you're investing in your career and thinking ahead; technology skills are always in demand, and many (public) colleges offer online classes and certificates.

The Bottom Line
When it comes to experience versus education, there's no clear winner. If you're on the hunt for a job, find ways to strengthen the part you're missing, and you'll be sure to beat both Bob and Joe.

SOURCE: INVESTOPEDIA

What is the base rate?
When someone borrows money to buy car or house or electrical appliance or any thing else, there is an interest rate that one has to pay to the lender. थे base rate is the minimum rate of interest that a bank will lend money at as per RBI guidelines. This is like floor interest rate below which RBI will not allow banks to lend money to any one.
Previously, banks used decide interest rates on the loans they offered, on a complicated system called benchmark prime lending rate (BPLR). Eachbank has its own BPLR which is very difficult for borrowers to compare rates across banks.
Now, with the base rate, it will be easier for everyone to compare across banks and to get a more transparent sense of how the interest rate for the loan is being arrived at.

Is interest rate going to be cheaper? Will my EMI change?
The most important thing to keep in mind is that the cost of money is not changing, i.e., if a car loan cost about 12% or a home loan cost 9%, these rates of interest charged are not going to change. 
Its just that the method used to arrive at this will be more clear to everyone. So, interest rates aren't coming down as a result of this base rate implementation.
Following on from this, your EMI on an existing loan is also not going to change. You will continue to pay whatever you were paying up to last month in future months as well.


Should one change to a bank with a lower base rate?
As mentioned above, the cost of money is not changing. Most banks continue to charge a very similar rate of interest as they did before. Just because one bank has a base rate of 7% and another has a rate of 8.5% does not mean one should change to the bank with the lower rate. 
On top of base rate there are additional amount of interest that the banks are charging, to cover its cost of doing business, and some compensation for the risk its taking in lending money. 
So, after all these additions, its unlikely that the lending rates of one bank are any different to the rate being charged by any other bank. And there is no major advantage to shifting from one bank to another.

How does the base rate affect pre-existing loan?
For existing loans, there is nothing going to change. As mentioned above, interest rates aren't changing in the economy. However, when any loan comes up for renewal, then it will be priced using the base rate formula.

Will the base rate remain fixed forever?
No, the RBI has given guidelines to banks to adjust their base rates depending upon the prevailing market conditions and interest rate policies. Expect to see banks update their base rates every few months if that is required. Banks will then communicate this to all their clients.