Purpose: The purpose of this paper is to show the effects of the six competence areas of Garcia-Aracil and Van der Velden (2007) on new graduates' labor market success measured by salary. Design/methodology/approach: The paper starts with a literature review about the role of competencies in higher education. Then the Graduate Career Tracking System (GCTS) carried out at the University of Pécs (UP) in Hungary provides a good basis to understand the competence assessment methodology better. Furthermore, GCTS is suitable for carrying out an exploratory, a confirmatory factor analysis and an OLS regression to discover the connection between competencies and level of income. Findings: The analyzed results, using a representative online survey based on 6,190 respondents, show that the six competence sets do exist, but that not all of them have a significant effect on salaries. With the control variables involved, 24.3% (EFA) and 23.0% (CFA) of the global competencies account for variance in salaries. The impact of methodological and the socioemotional set on salaries can be clearly seen among those with new degrees, and based on the results and the literature review, the HEIs can improve them. Research limitations/implications: In the absence of nationwide general competence assessment, the results are limited only for the UP graduates of Hungary, even if this HEI is one of the biggest ones. Practical implications: Based on the results, more soft-competence development courses and opportunities should be offered by the HEIs. Originality/value: The findings of the study help us to understand the role of the institutions in tertiary education, the extra service to be provided to assist students in being successful in life. Based on the literature review, there is a need to understand better the connection between competencies and labor market success. This paper contributes to this and also presents an opportunity for further comparative research. The sample is robust to allow other researchers to use this conceptual model and apply it to other countries. © 2020, Emerald Publishing Limited.
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