Imagine you're hiring for an important position at your small business and two promising resumes hit your desk. Both have the experience and background you're looking for, but one candidate has an Ivy League degree while the other went to a solid but less impressive university. 

Most entrepreneurs would be pretty excited to interview the candidate with gold-plated credentials. But a massive new study tracking the real-world performance of more than 28,000 grads from nearly 300 different universities found hiring managers should approach hiring those from top schools with a degree of caution

Yes, they perform better. 

The reason many bosses leap to hire grads from top schools isn't hard to understand. These institutions only accept the best (and the best connected) so a degree from the likes of Harvard or Yale is a pretty good indication that someone is smart and worldly. That cognitive and experiential edge, many bosses think, is likely to translate to higher on-the-job performance. 

Is that true? When the researchers followed tens of thousands of grads as they worked remotely on various business consulting projects, they discovered the answer is...kinda. 

When you compare the very top grads to the global average, having highly ranked degree was associated with a hefty 19 percent jump in performance. But it's important to note that the global average university is thousands of places down the rankings from the top-tier universities. In the real world, if you're facing this hiring conundrum, you're unlikely to consider hiring grads from the University of Nowhereville.  

Instead, you're likely to consider only candidates with credentials from solid schools. And if you compare these grads to Ivy Leaguers, the jump in performance was just one percent.  

But at what cost?

All of which boils down to a clear, if less-than shocking, conclusion: Top grads do perform slightly better at work on average. That means you should hire them when you can, right? 

Not so fast, caution the authors of the study in a Harvard Business Review write-up of the findings. While those with the best degrees have an edge, they also have very real downsides, starting with the fact that they're significantly more expensive

"The average early career salaries of graduates from the top 10 colleges ($72,160) in the United States are 47 percent higher than those with degrees from the 10 colleges within the City University New York (CUNY) school system ($48,960), many of which are ranked within the top 100. At the six-year mark, that gap jumps to 108 percent," note the authors. 

Is one percent better performance worth nearly $25,000 a year? And that's not the only trade-off you should consider before hiring the candidate with an impressive degree. The researchers also found that while those from top schools had marginally better individual performance, they seemed to work less well on teams. 

"Our data suggest that students from higher-ranked universities might damage team dynamics," the authors write. "We found that graduates from higher-ranked universities tend to excessively focus on the instrumental tasks, often at the expense of paying insufficient attention to interpersonal relationships. In some instances, graduates from top universities tend to be less friendly, are more prone to conflict, and are less likely to identify with their team."

It's worth noting that when it comes to overall team performance, studies show the EQ of team members matters more than their individual IQs. Empathetic, emotionally mature teams outperform ones composed of awkward brainiacs. And if you read between the lines, this study suggests you're more likely to get an awkward brainiac if you're overenthusiastic about Ivy League degrees. 

The bottom line.

The bottom line here depends on the position you're hiring for. For certain highly technical or cognitively demanding roles, any intellectual edge may be worth a higher salary and more team drama. For other roles, the downsides are going to outweigh the advantages of a tip-top degree. 

Each individual candidate and company is different, so there are no definitive answers, except perhaps a reminder not to be dazzled by big name schools. Think carefully about the trade-offs you're likely facing. For many positions, a worse degree is the better choice.