A recent report by the Chartered Institute of Personnel and Development (CIPD) – Over-Qualification and Skills Mismatch in the Graduate Labour Market – gained a lot of media coverage recently for making the claim that the majority of university graduates are working in jobs that do not require a degree. According to the report, 58.8% of graduates are in jobs deemed to be non-graduate roles, and the number of graduates had now “significantly outstripped” the creation of high-skilled jobs.
According to Peter Cheese, chief executive of CIPD:
“The assumption that we will transition to a more productive, higher-value, higher-skilled economy just by increasing the conveyor belt of graduates is proven to be flawed. Simply increasing the qualification level of individuals going into a job does not typically result in the skill required to do the job being enhanced – in many cases that skills premium, if it exists at all, is simply wasted.”
The report was met with a good deal of criticism, with a number of objections coming from across the HE sector. One of the criticisms was that the report relied on old data, and that the situation was now markedly different from the one presented by CIPD. According to Maddalaine Ansell, Chief Executive of University Alliance:
“The widely reported CIPD figure that 58.8% of graduates are in non-graduate jobs comes from 2010 during a weak economy. The latest Graduate Labour Market Statistics found that more graduates are in work this year than at any time since 2007 and that graduates earn almost £10,000 a year more than people without degrees.”
A further line of criticism was that even if students don’t immediately go into graduate-level employment, higher education still gives them a set of highly valuable skills, which more often than not will lead to higher-level employment further down the line. Nicola Dandridge, Chief Executive of Universities UK, noted:
“The kinds of skills that higher education provides, the ability to think critically and to analyse and present evidence, are lifelong and are going to be increasingly in demand as the number of high-skilled jobs increase….Employment figures looking at what graduates are doing three and a half years after graduation show that the vast majority are in full-time employment.” [She may well be pointing to these figures from the Higher Education Statistics Agency which suggest that 88% of graduates are in employment 3 ½ years after graduating]
So who is right? Whilst hopefully not sounding like we are straddling a fence, we are inclined to say that there are good points on both sides. For example, Maddalaine Ansell is right to point out that graduates tend to earn around £10,000 more per year than those without degrees, as our data showing the correlation between qualifications and earnings/employment chances shows:
Our data also backs up the claims made by both Maddalaine Ansell and Steve West that the number of graduate jobs is set to increase over the next few years, with the graph below showing the number of graduate jobs in Great Britain from 2007 until 2015, with a forecast of trends out to 2018:
However, whilst this data tells us what the overall demand for graduate jobs is likely to be (and if we had the space in this piece, we could tell you where that demand is likely to be highest and in which jobs), what it doesn’t tell us is how many of these jobs would have been considered graduate jobs, say, 20 years ago, which was the nub of what the CIPD report was getting at. They pointed, for instance, to the fact that the number of graduates employed in managerial, associate professional and technical occupations is now roughly the same as non-graduates, as compared to less than 20% in the early 1990s, leading them to conclude that many graduates are under-utilised.
In their summary, CIPD concur with Alison Wolf, who stated in a report earlier this year that we are producing “a vanishingly small numbers of higher technician level qualifications, whilst massively increasing the output of generalist bachelor degrees and low-level vocational qualifications, not because the of labour market demand, but because of financial incentives and administrative structures that governments themselves have created.”
It might seem like there are a lot of conflicting opinions going around here, but there may be more common ground than at first meets the eye. One thing all sides have in common is a basic desire to ensure the labour market is supplied with a labour force that has the right skills. Where we believe the divisions lie is perhaps in the fact that too little attention has been given to understanding what the needs of the labour market actually are.
Is it wise to keep on churning out graduates into the labour market? Well it might be, or it might not be, depending on where the demand is, and which jobs the demand is for. On the other hand, if the system is sending out graduates into a labour market which really does need them, then the graduates are far more likely to find meaningful employment in roles which properly utilise their skills.
The key to getting this right is therefore for universities to get a much better understanding of graduate labour demand – whether it is rising, where it is rising, and in what occupations it is rising – and this is where local and regional industry and occupations data is a must. Without such data, universities are shooting in the dark when they talk about meeting the needs of the labour market. With such data, they are given a far greater understanding of what the needs actually are, and so can begin to match supply of graduate labour with demand for graduate labour. That is surely the scenario that both the CIPD and their critics are hoping for.
For further information about how our data and tools can help you gain a better understanding of graduate labour demand, contact Dr. Jamie Mackay (email@example.com)