Tag Archives: graduate statistics

Myths about the graduate labour market – Number 2: Everyone goes to university nowadays

Each week* I will be tackling a common myth about university, graduates and the labour market and showing the data and research surrounding them so you can judge how valid those statements are. I started with the big one – that there are too many people getting degrees.

Next up, a related myth – that ‘everyone gets a degree nowadays’.

*may not be, strictly speaking, one post every week.

Continue reading Myths about the graduate labour market – Number 2: Everyone goes to university nowadays

Myths about the graduate labour market – Number 1: We have too many graduates

It’s been some time since I last tackled the most common myths currently circulating about graduates and the graduate labour market. The current state of the graduate labour market is a little murky in the post-EU-referendum economy, but the broad trends and themes are still current and so we will touch on those questions as we go.

Over the next few days I will examine some of the key misconceptions that circulate  in media and civil discussion and occasionally even in universities and policy, about graduates and the graduate labour market. In response, I will try to demonstrate a balanced picture of what is taking place.

Continue reading Myths about the graduate labour market – Number 1: We have too many graduates

Moving through history

The development of the Teaching Excellence Framework and the way that it will use measure of graduate employment as a metric to judge institutions makes it all the more important that we get a real grip on how the graduate labour market works.

Graduate migration – see my most recent piece for the latest data – is a phenomenon that has subtle but profound effects on the way we can and should think about graduate employment.

To help understand the migration groups, here is a graphic developed by my excellent colleague Ellen Logan.

migration patterns

Let’s revisit this year’s migration patterns.

leavers etc
Employment groups for UK domiciled graduates from 2013/14

It is now a slightly alarming 11 years since I first conducted an analysis of this kind, so let’s have a look at the data from graduates from 2002/3.

2003 migration patterns
Employment groups for graduates from 2002/3

There are some differences – most notably, Loyals have increased for all regions except London (and, interestingly, Northern Ireland), Incomers are also up in most places, and Stayers are down, quite a bit, in some places (especially Scotland).

But the basic patterns have not moved in over a decade. We may find that, in the future, regions retain slightly fewer people who moved to the area to study, but more people will not move far to study or work but these patterns are what graduates do to find work, and we can assume that this will continue. .

This shows that graduates are not as mobile as a lot of thinking has them and that many can’t or won’t move far or to locations that they do not have a connection with for work. There are practical implications – most graduates who go to work in London, for example, are either originally from the region or studied there. And the same effect is intensified for every labour market outside London.

If you’re a recruiter, this ought to make you think about how you source your talent. If you recruit in Leeds, your new recruits will largely have lived or studied nearby. If you a London-based recruiter with a diversity agenda, even if you see yourself as attracting talent from all over the country, in reality many of those attracted to your offer will have existing ties to the capital, with  implications for your ability to recruit BME graduates and graduates from less affluent backgrounds.

If we are to have metrics based on salary, therefore, we have to understand that they are at least to some degree a measure of where an institution is sited and where they draw their graduates from.

Much has been made of the IFS finding that a group of institutions have graduates who earn under the national average for all workers; anyone familiar with the graduate labour market can probably have a good stab at the identities of those institutions, predominantly universities in less affluent parts of the country, serving labour markets with low wages. We should not allow a situation to develop where institutions with a valuable function in developing local economies feel incentives to send their talented graduates outside those economies to ensure metrics are met.

For institutions, it makes it clear that you will need to be absolutely on point about your local labour markets and to understand where your student cohort comes from. There’s a lot more to understand about how and why graduates move to find work, and what this means for the UK. Is it right to think of the ‘UK graduate labour market’ at all as anything but an abstract, or is it really a series of overlapping markets with their own character and needs? And, crucially, how do we ensure that a framework develops that does not effectively penalise universities for not being near London? We have work to do.

 

 

 

The ‘Masters job’. Does it exist and how could we examine it?

This is an unabridged version of a section from my recent article in Graduate Market Trends about the Masters labour market in the UK. The first section, on Masters employment, is reproduced in unabridged form here.

There is a lively ongoing debate about the ‘graduate job’ and the question of which jobs require degrees. There is, however, consensus that a jobs market does exist for which first degrees are the main qualification and which is not always accessible for workers without this level of qualification.

Continue reading The ‘Masters job’. Does it exist and how could we examine it?

The 2016 graduate labour market in the UK

2015 turned out to be quite a positive year for the UK graduate labour market, so let’s take a look at what the new year might hold. As always, we will come back in 12 months to see how these predications fared.

And the first prediction carries on where we left off in 2015.

Getting used to skills shortages and recruitment difficulties

Recruitment difficulties and skills shortages were a feature of 2015 and they will be, if anything, even more central to the UK graduate labour market in 2016. We now have widespread graduate shortages across a range of key sectors, in engineering, in building and construction, in teaching, in health, in IT, in business services and in niches throughout the economy. Shortage of available graduates is affecting the ability of a minority of businesses and sectors to meet demand, and we should probably expect these difficulties to spread to other parts of the economy. 2016 will be about businesses learning to live with not always being able to find graduates when they need them and making plans to mitigate or avoid shortage. We’re not in 2011 any more.

Broadly positive employment outlook

Employment intentions are still up, but the rate of increase is slowing. Some employers, especially those in professional or IT services who had recruited strongly in the last year, may get more cautious on hiring as skills shortages make it harder to recruit, but overall we will likely see modest improvements in the graduate employment market and an increasingly benign jobs market for new graduates – although that doesn’t mean we can or should expect every new graduate to find work easily, or that those who don’t are failing.

But we do need to be careful. The outlook for manufacturing employment is not as positive, affected by weak export markets, by the continuing downturns in steel and in oil and gas, and by skills shortages. There are other factors at play that affect confidence as well….

An uncertain Euro referendum

I can’t bring myself to use the phrase ‘Brexit’, but 2016 looks likely to see a referendum on membership of the EU at some undeclared point, there will be a vicious media campaign, and leaving the EU is not considered likely to be positive for the economy in the short term. Business confidence is likely to be affected if it looks as if there is the prospect of a Brexit (now look what I’ve done), and a reduction in confidence means a weakening of the economy, and a weakening of employment intentions. A portion of the political skirmishing is likely to feature more rhetoric – and possible action – on curbs on immigration, which will exacerbate skills shortages.

Keep an eye on wages

Low inflation is keeping a lid on wage rises in many sectors, but skills shortages mean that some in-demand professions (especially in engineering, IT and professional services) are seeing much stronger wage pressures. The big question is about the salary expectations of the new cohort of graduates – the first to have paid the full £9,000 a year for the duration of their degrees. The repayment threshold of £21,000 means that many graduates in professional employment will start repaying from day 1 – will we see wages rises (as employers were predicting in 2011)? Will we see the rise of jobs paying £20,995 rather than £21,000? 2016 will be an interesting year for graduate wages.

The urbanisation of graduate work

Graduate employment is concentrated in cities, and that shows no sign of of changing soon. Over 40% of the working population in Newcastle, Manchester, York, Sheffield, Leeds, Bristol, Bath, Oxford, Cambridge, Cardiff, Swansea, Newport, Aberdeen, Dundee, Edinburgh and Glasgow had a degree or equivalent at the end of 2014, and when we get figures for 2015, Liverpool, Nottingham, Leicester, Birmingham, Coventry, Norwich, Ipswich and Southampton could all have joined the list. For graduates looking for work – look to the cities. Smaller urban areas, and rural areas, will have some roles, but mainly in a public sector which is likely to continue to lose jobs.

For policy – graduates will play an increasingly important role in urban economies, and we need to get to grips with a future where the largest group of employees in many of our cities – in some cases a majority, and not just in London – will have degrees.

There are undoubtedly more themes that will emerge in 2016 for the graduate labour market, and I’ll keep you posted if and as they do. Happy New Year everyone.

 

Charlie’s Crystal Ball – how did I do in predicting the graduate labour market in 2015?

It’s the most wonderful time of the year – a time when I get to look at what I said 12 months ago and see whether it turned out to be right. Or, alternatively, the bit where I mark my own homework and declare myself a genius.

This time last year I made five predictions about the graduate labour market. Let’s go through them one by one.

Continue reading Charlie’s Crystal Ball – how did I do in predicting the graduate labour market in 2015?

What’s going on in the graduate labour market?

It’s been a busy old summer.

This isn’t another blog about the Green Paper – much ink has been spilled on that subject already and more will be in the future, I am sure. But it is about some of the issues that are brought up in the Paper and will arise in the course of debate and implementation.

First, what is the current state of the labour market for graduates? The answer is reasonably simple – the recession, at least for graduates, is over, we are in recovery and prospects for new graduates are what we’d expect from a reasonably healthy graduate jobs recovery. The evidence is manifold, but perhaps the simplest comes here, from historic early unemployment rates for graduates as shown in the graph below.

historic unemployment rates for UK domiciled first degree graduates since 1976
That’s a lot of recessions.

We’re clearly in a state of falling graduate unemployment (note how often we end up in graduate recession, though). The early part of 2015 had a great deal of positive news, but the second half suggests that the rate of recovery has slowed and we can see that hiring intentions are slowing, especially in manufacturing. I would expect things to improve marginally this year and then flatten out in 2016 – but as we can see from the graph, we’re getting close to historic lows in the early graduate unemployment rate anyway.

This has a number of effects, but probably the most crucial is in skills shortages. This is where the Green Paper can come across as a little misleading. The Paper acknowledges that employers are now struggling to find the graduate skills they need, but the section, ‘The Productivity Challenge’ says the following

However, at least 20% of graduates are not working in high skilled employment three and a half years after graduation, and most employers of STEM graduates are concerned about shortages of high quality applicants

and then follows with

Too many organisations find it hard to recruit the skilled people they need; this poses serious risks to the competitiveness, financial health and even survival of many businesses. Surveys by the UK Commission for Employment and Skills (UKCES) reveal a sharp rise in skills shortages. Such deficiencies are longstanding in some sectors, preventing us from rebalancing the economy and underlining the need for decisive action.

So, what’s happening? Let’s look at the second point first, ‘most employers of STEM graduates are concerned about shortages of high quality applicants’. This comes from a new paper by the Institute of Employment Studies and HECSU for BIS, “Understanding employers’ graduate recruitment and selection practices”, of which, happily, I am a co-author. What’s actually going on is, as the UKCES Employer Skills Survey also shows (and I spent most of the summer looking at this data), we just don’t have enough graduates applying for jobs in a whole swathe of graduate roles across the economy. Not just in STEM, although engineering in particular is affected, but across most sectors, including health (we are so short of nurses), manufacturing, finance and business services. As the Bank of England wrote in July.

Recruitment difficulties had edged up and were at levels last seen during 2007, having broadened recently across a wide range of skills, levels of experience and occupations. For example, reports of a scarcity of experienced middle and senior managers had become fairly common. … In consequence … apprenticeship, graduate and school-leaver recruitment programmes had been either maintained or increased.

Recruiters are concerned with getting enough talent, and with retaining that talent when they have it, and there’s little evidence of those issues easing at the moment.

Let’s now turn to the first point, “However, at least 20% of graduates are not working in high skilled employment three and a half years after graduation”. As we address in great length in Chapter 2 of the new report, there is no consensus on what a graduate job is, nor are we actually sure what a high-skilled job is, but there seems to be a lot of evidence mounting that even were you to identify what these terms might mean today, the nature of industrial change is such that a job that might be ‘non-graduate’ or ‘low skilled’ this year may no longer be in three years time. Just today we had news that exactly these forces seem to leading the College of Policing to conclude that police officers should now have degrees. At present, we are using definitions of ‘graduate job’ and ‘high-skilled employment’ that are based on an occupational classification system developed before the recession and not designed for that purpose, and so it is difficult to be clear what these measures really mean.

So, where are we now? The market has recovered, most graduates will get jobs quickly (although that’s always been the case) and there are several areas where there are not enough to meet employer demand. These are the current challenges in graduate recruitment. We are not in a situation where, broadly, we have too many graduates chasing too few jobs, although we might in individual industries. We do have a mismatch between supply and demand but that is often not because graduates are not good enough but because in a time of relatively healthy graduate prospects, many employers are now finding that their offer is not attracting the graduates that they want. Are the graduates there at all? Do they need to refine their offers? Whatever the answer, the labour market for graduates is not the one we had started to get used to from 2008, and we all need to adjust.

DLHE and graduate demand

I’m speaking at the AGR on Monday about skills shortages. Come and see me if you can. Whilst polishing the presentation, including some of the new DLHE data, I had the idea of comparing labour force data with DLHE outcomes to see how quickly the economy is creating jobs and how that relates to graduate numbers. Using Annual Population Survey data to the end of 2014, here are two very interesting graphs. Occupational Change 2007-2014 This first examines occupational change in the UK between 2007 – just before the recession – to the end of last year, when recovery was ongoing. Occupational classes 1 to 3 are ‘professional level’, jobs now largely done by graduates. In that time, the economy added well over a million new graduate jobs (so this doesn’t take into account replacement demand at all) whilst losing jobs from most non-graduate employment categories. During a terrible recession. Anyway, hold that thought. Here’s what happened last year, during 2014. occ change 2013-2014

A much healthier picture across the economy (which puts the previous graph into context – even though we added nearly 100,000 skilled trade jobs last year, we’re still over 89,000 jobs down on pre-recession), but the key thing is that bottom three rows. Last year, the UK economy added a touch under 310,000 new graduate-level jobs (although not all of them will have been filled by new graduates, of course). DLHE tells us that around 205,000 first degree graduates, both full-time and part-time, entered the UK jobs market last year. In fact, if you add together everyone who got any kind of HE qualification at all, it came to just over 279,000 graduates known to be new workplace entrants in the UK.

Although this does not include all graduates, as not all reply to DLHE, and the true number of entrants to the workplace from HE will have been higher, many of those entrants didn’t go into graduate level employment. If the economy continues to add skilled jobs at this rate, then issues of graduate skills shortage – already serious in a number of areas – could become more and more pressing. It certainly doesn’t suggest an obvious oversupply of graduates. Interesting times may be ahead.