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Skilled UK graduates are in demand

20 August 2015
Greg Wade

Greg Wade

Programme Manager
Universities UK
report this week by the Chartered Institute of Personnel and Development (CIPD) concluded that the majority of UK university graduates are working in jobs that do not require a degree and that ‘graduate over-qualification’ has reached ‘saturation point’.

The CIPD suggested that some young people should think carefully about entering higher education when “for example, going into an apprenticeship at 16 or 18 could be a much better choice”.

The report raises some interesting questions, but does not, however, reflect the latest graduate jobs outlook. It does not, either, take into account the reality of how graduates end up in their long-term careers and the lifelong benefits that come with getting a degree.

It is worth bearing in mind that many graduates do not go straight into their chosen careers after graduating. In reality, some will get short-term jobs to fund further study or to go travelling, for example. Employment figures looking at what graduates are doing three and a half years after graduation show that the majority are in full-time employment.

The official Graduate Labour Market Statistics for the first quarter of 2015 show that the employment rate for working age graduates is 87.5%, the highest level seen since late 2007. The unemployment rate for young graduates is also the lowest since 2007. At 3.9%, it is well below the 9.0% unemployment rate for young non-graduates.

The figures show also that working-age graduates still earn a significant premium over non-graduates. They earn almost £10,000 a year more than people without degrees.

What’s more, this trend of recovery is set to continue. The Association of Graduate Recruiters’ (AGR) predicted an 11.9% rise in vacancies this year, following an increase of 4.3% last year. The January AGR survey demonstrates a sustained optimism among AGR members (large, graduate employers) in the context of a steadily growing UK economy.

The CIPD’s report also raises the important role of apprenticeships and further education in contributing to the skills base and productivity of the nation. However, this does not, and should not have to be at odds with the equally valuable contribution that higher education and university graduates make to their future employers, the economy and higher skills.

According to recent research from the UK Commission on Employment Skills (UKCES) there will be 7.8 million additional high-skilled jobs between 2012-2022. So, how many new graduates can we expect in this timeframe? While it is difficult to form a precise estimate, the government has predicted 2.9 million additional undergraduate higher education entrants (not graduates) between 2012-13 and 2019-20, with the biggest jumps occurring between 2012-13 and 2014-15. If we assume that academic years 2020-21 and 2021-22 will be similar to 2019-20 (390,000 additional entrants per year), then we can suggest there will be roughly 3.7 million additional graduates to fill the 7.8m additional high-skilled jobs between 2012 and 2022.

Trying to create an artificial dividing line between further education and apprenticeships and universities is not helpful. Around 20 universities will be delivering new degree apprenticeships this year. Many universities are delivering higher education in partnership with further education colleges and many further education colleges have a long track record of delivering higher education. This is, and should be, a joint effort. Universities themselves deliver many vocational and professional degrees and have strong links with business and local economies. According to the CBI/Pearson education and skills survey 2015, 88 per cent of employers are reported to be either satisfied, or very satisfied with graduates’ technical skills.

And let us not forget the many related benefits that higher education offers. University provides the ability to think critically, analyse and present evidence – the skills that future leaders in business, the third and public sectors often so desperately need. The same CBI/Pearson survey demonstrates the value employers place on graduate skills, with more than two-thirds either satisfied or very satisfied with communication, team ​working and technical skills as well as analysis and problem solving skills and positive attitude to work.

So, as the recovery continues, we can expect to see increasing challenges for employers to recruit and retain graduate talent. Universities are investing significant resources to ensure they are equipping graduates with the right skills for their future careers and have excellent links with businesses of all types. They have a very keen sense of the need to demonstrate the value of higher education.

The clear message from the evidence is that we need more high-skilled graduates, not fewer.

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