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?
Historically, university was seen exclusively as the playground of the upper and middle classes. Access to higher education has improved over time and consequently the number of graduates has soared. In the last decade alone, 4.5 million working-age graduates joined the UK workforce, leading many to think that there aren't enough jobs for graduates.
How did this myth arise?
It's no surprise that people think there aren't enough graduate jobs. The percentage of graduates in the workforce has grown rapidly, rising from 28.5% of the working-age population in 2007 to 38% in 2017.1
Data from the Higher Education Statistics Agency (HESA) shows that:
- 5.3% of graduates were unemployed in 2016
- graduate underemployment persists, with 11.1% of those that were working employed in the retail, catering, waiting and bar staff industries six months after graduation.2
It is also common for someone to know of a recent graduate who is either unemployed or working in a role that isn't at a graduate level. If there are enough jobs for graduates, then how could this be?
What are the facts?
There has never been, and never will be, a graduate cohort that does not experience unemployment and underemployment. It is a consequence of the economic system and it is an oversimplification to say that just because someone isn't employed that there is not a role for them in the workforce.
There are more graduates now than ten years ago, but the UK economy has changed. There has been a significant shift towards a high-skill economy and 2.5 million new professional-level roles have been added, compared with only 55,000 non-professional roles.
What will happen in the future?
The UK has seen 4.5 million graduates and 2.5 million new professional-level roles added to the economy since 2007. At this rate, is graduate supply in danger of one day outstripping demand?
The recent picture tells us otherwise. In 2016:
- 441,000 professional-level jobs were added to the economy
- 291,000 new graduates entered the workforce (across all levels of qualification)
- 71.3% of graduates entering the workforce were in professional-level employment within six months
- graduate unemployment (5.3%) was at its lowest level since 1989.
The demand for graduates isn't waning. The UK needed 150,000 more high-skilled workers than it produced to enter the workforce in 2016 just to fill new jobs, let alone fill vacancies created due to retirements and people leaving the workforce.
There are huge shortages in certain areas - finance, IT, construction, engineering, healthcare and hospitality in particular were having recruitment difficulties in 2017.3
The UK economy will continue to upskill and the demand for graduates will only increase - 65% of children entering primary school today are expected to work in completely new job types that don't yet exist.4
It is not true that there are no jobs for graduates, if anything there are more jobs than there are graduates to fill them.
Also in this series
- You're better off not going to university
- All graduate jobs are in London
- Graduates all work for big businesses
- Everyone has a degree nowadays
1. Annual population survey, Office for National Statistics (ONS), 2017.
2. Destinations of Leavers from Higher Education record 2015/16, Higher Education Statistics Agency (HESA), 2017.
3. Agents’ summary of banking conditions, Bank of England, 2017.
4. The Future of Jobs, World Economic Forum, 2016.
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