We’ve just released the 2018 edition of the venerable collaborative publication, ‘What do graduates do?’ . The remaining reader of this blog will have a good idea what this book – which has been a feature of the sector for 40 years – is all about, so I won’t go into a lot of detail
Of course, the core of WDGD is DLHE, and the way the book explains the labour market for 2016/17 leavers to prospective students and graduates. So, what does the data say? Those of you who follow media narratives about the graduate labour market may be rather surprised to hear that the graduate labour market is currently rather robust.
The majority of graduates were working after six months – 74% – with unemployment standing at 5.1%, the lowest rate since the 1988/89 graduation year and so the lowest we’ve seen since the post-92 universities entered the sector.
74% of graduates in work after six months were in professional level employment, another relative high. Part of this is because of the success and popularity of new postgraduate loan systems and so we saw an increase in the proportion of graduates taking Masters degrees. This has the fortunate side-effect of potentially shunting some labour market issues out of the first degree sphere where they are visible, into the PGT area where they are, currently not. Although maybe not forever.
But the – live – questions about the ability of the UK Masters graduate labour market (such as it is) to absorb the sharp rise in new entrants it has experienced in the last two years are a topic for another piece – or workshop.
But, why is the first degree graduate labour market so strong, and why are we nevertheless feeling inundated with stories of underemployed graduates, and questioning the value of higher education?
The UK graduate labour market left recession around 2013 (note I don’t say ‘the labour market’) and since then much UK job creation has been at graduate level. Indeed, crucial economic actors such as the Bank of England and British Chambers of Commerce have been warning for some time of recruitment issues and labour shortages in a range of skilled professions, in tech, construction and business services. The BCC surveyed members at the end of 2017 and found that 71% of members who had tried to recruit found it difficult and that professional and managerial roles were the hardest positions to fill.
But, at the same time, the graduate labour market is concentrated in urban labour markets – a third of all UK graduates from 2016/17 started their careers in London, Manchester, Birmingham or Leeds. This means that whilst there are many options for graduates, they are not merely limited by subject choice (indeed, many good options are probably less subject-limited than many realise) but by geography. At the same time, graduates are not actually very geographically mobile and it could well be that this mobility is becoming more limited.
This has been one of the reasons behind the recent announcement of the Office for Students new Challenge Competition, inviting providers to develop projects to support graduates who opt to stay in their home regions. The OfS has recognised that whilst the league table agenda gives an advantage to institutions situated in urban labour markets or whose graduates work in London to maximise their salaries, the Industrial Strategy, and particularly the local strategies, mean that skilled graduate employees are needed to boost and revitalise regional economies. In addition, cost of living issues mean that even London weightings struggle to mitigate housing costs and many graduates suspect, with good reason, that even if their salary might be higher in London, their disposable income may not.
All this leads to a tension between sometimes conflicting priorities. The OfS understands that the appropriate reply to graduates from difficult labour markets who, despite struggling to find work, wish to remain in their home towns is not always ‘you ought to move to London/nearest large city’ and that these graduates represent a pool of talented individuals who are not always getting to use their hard-earned skills. If we can address some of those issues more effectively, everyone will win out, graduates rooted in their local communities who want good work in their home locales, and businesses often struggling to identify and recruit the people they need to thrive and grow.
Ultimately we are currently experiencing a relatively benign labour market for graduates. There is no telling how long this will last, but we should be robust in promoting what is going well (skilled urban labour markets) and what needs evidence and action. ‘What do graduates do?’ is a vital tool in the armoury of the careers professional but it can also have lessons for policy as sector and Government priorities converge on graduate employment as a key question.