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Graduates in demand, but skills must match up with jobs

Greg Wade

Greg Wade

Policy Manager
Universities UK

Debates about the value of degrees – and whether graduates and society are benefitting from higher education – are now almost a daily occurrence in the media.

This week, the Commons education committee added to this focus, asking whether all university courses provide value for money and whether all students are getting good outcomes from their degrees.

Often missing from the coverage, however, is evidence from employers on graduate recruitment and their actual skills needs. Two recent reports – one from the the Confederation of British Industry (CBI) and the other from Graduate Prospects – provided just that.

The annual CBI/Pearson Education and Skills Survey is always a rich source of employer feedback, not just on graduates, but schools and colleges as well as wider issues such as apprenticeships. The latest survey findings were published this week.

In all previous surveys, a majority of employers have indicated that they expect an increased demand for higher level skills, consistently higher than demand for lower and intermediate level skills. This year is no exception, with 79% of employers expecting an increase in the demand for higher level skills in the next three to five years, this is a five-year high and remains higher than expected demand for low (3%) and intermediate skills (43%).

This demand for higher level skills and graduates is mirrored in the latest Graduate Prospects report, with graduate unemployment at its lowest rate for 39 years and a number of sectors that employ graduates reporting skills shortages.

This concern about the supply of graduates is reflected by CBI members with 66% expressing lack of confidence about their ability to access higher level skills in the future, higher than for low and intermediate skills. Graduate Prospects also reports that the proportion of graduates entering professional employment has increased in almost all subjects with the overall proportion of employed graduates in professional level roles going up from 71.4% to 73.9%.

Management and leadership skills – important graduate roles – are a particular shortage area and will be especially important to securing economic success with the uncertainty of Brexit and the Fourth Industrial revolution and the need to take advantage of any new global or technological opportunities. 73% of CBI members report that they expect to increase demand for leadership and management skills over the next 3-5 years, the highest level in five years.

Graduate Prospects reports on evidence from the British Chambers of Commerce that the service sector is already reporting that professional/managerial staff were the most difficult category of employee to recruit. The new Chartered Manager Degree Apprenticeship could help fill this urgent skills gap and the government should earmark the £100 million increase expected in the apprenticeship levy, identified in the most recent budget, to this.

A large number of CBI members (79%) considered the upper second (2:1) undergraduate degree to be a good measure of academic ability, a vote of confidence in academic standards. However, the CBI report also makes the point that graduates need more than just a degree and especially need positive attitudes and aptitudes for the workplace.

This is something Universities UK echoed in its report Solving Future Skills Challenges highlighting the need for universities and employers to collaborate to develop these skills. It seems employers agree, with over half of employers with links to universities maintaining or increasing the scale of these links over the past year.

Developing the skilled graduates employers need will become increasingly complex and urgent in the future, as the impact of the fourth industrial revolution and the speed of technological change require new skills, re-skilling and upskilling.

CBI employers seem to recognise these challenges, and are committed to investing in training and development. The joint CBI/UUK reports Flexible Learning and Routes to Higher Level Skills explore how university, employers and further education colleges can collaborate to ensure that we can ensure employers have enough graduates, with the right skills, to face future economic and social challenges.

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