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Labour market myths: 'Graduates all work for big businesses'

May 2018

With media focus on 'fake news', you'd be right to question assumptions about the graduate labour market. Equip yourself with the facts so you can challenge these labour market misconceptions…

What's the assumption?

Graduate jobs are often associated with big businesses and international firms that offer structured training schemes, accompanied by high salaries and company benefits. This has led to the belief that graduates all work for big businesses.

How did this myth arise?

Bigger businesses are more dominant, wealthy, and have larger recruitment targets. Small and medium-sized enterprises (SMEs), by contrast, are not as well known, recruit fewer employees, and have smaller recruitment budgets.

Often, SMEs form part of the hidden jobs market since they prefer to recruit through personal contacts as it is more cost effective. In 2016, 23.9% of graduates working for a company with fewer than 50 employees used personal contacts to secure their job.1

The relationship between universities and large employers is also stronger than that with SMEs, so graduates are frequently exposed to the top graduate schemes.

The popularity of health occupations is responsible for a large proportion of graduates working for big businesses. Last year, 24,700 graduates worked in hospitals, with nearly all these institutions employing more than 1,000 people.

What are the facts?

In 2016, only 57.6% of UK graduates went to work for big businesses with 1,000 or more employees.

The Destinations of Leavers from Higher Education (DLHE) data for 2015/16 showed that:

  • 34% of graduates were employed by a company that had fewer than 250 employees
  • one in six worked for a business with fewer than 50 employees.

Working for SMEs is particularly common in design, architecture, the arts, PR, sport, and web design professions.

The SME sector for graduates is strongest in the South of England, notably Greater London, where 36.8% of graduates were working for a company with fewer than 250 employees.

What are the benefits of working for an SME?

Those employed by SMEs are likely to be given a greater degree of responsibility and opportunities to build on decision-making and leadership skills.

The work is usually more varied than in larger organisations so graduates often have a better chance to explore different activities and find out what interests them.

Greater collaboration between universities and SMEs could help to promote small business opportunities to graduates.

Also in this series


1. Destinations of Leavers from Higher Education (DLHE) 2015/16, HESA, 2017.

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