What do you believe about the graduate labour market? Where do you source your information and how reliable is it? In the era of Big Data, who should you go to for accurate information? The Media presents an often despondent picture of opportunities for graduates, but is what you read in the news robust and reliable? Where do reporters source their evidence?
I recently attended the annual conference for Higher Education Careers professionals. This event brings together experts in the graduate labour market whose ‘big data’ can be relied on. The Media, however, does not always embrace these sources despite being made aware of them, where it risks disrupting the often negative narrative around graduate employability. The Higher Education Careers Service Unit (HECSU) compiles the annual report on ‘What do Graduates do?’ and so is used to grappling with and analysing large quantities of data.* At the conference, Charlie Ball HECSU’s Deputy Director of Research at Graduate Prospects, presented research findings on the current state of the graduate labour market and addressed some of the common assumptions people make.
Myth 1: There aren’t any jobs for graduates
Fact: Six months after graduation in 2016, 74% of graduates were in work.
- 5.3% were unemployed – the lowest rate since 1998/89
- 441,000 new professional jobs were created last year (although the Destinations of Leavers from Higher Education (DLHE) showed that only 291,000 new graduates entered these so many graduate level jobs were not filled)
Conclusion: The current outlook for graduates remains positive with more jobs than there are graduates to fill them.
Myth 2: graduates only work for big business or on large training schemes
Fact: In 2016, 34% of graduates went to work for companies with fewer than 250 employees and one in six were with companies with fewer than 50 employees.
- Small to Medium Sized Employers (SMEs) are especially important in the arts, design, architecture, marketing/PR/Advertising, sport/fitness, law and web design
- SME graduate employment is stronger in London and south of England.
Conclusion: SMEs are a substantial source of employment opportunities.
Myth 3: all the graduate jobs are in London
- 15.2% of the population lives in London
- 19.4% of UK graduates live in London
- 21.6% of graduates started their career in London, with many of those jobs confined to a relatively small area of London
- 23% of the country’s businesses are in London
- 50% of the population in London are graduates- compared to 38% nationally, average weekly earnings are £679 compared to £525 nationally
Where did 2016 graduates work?
Westminster (5475) Birmingham (4080) Manchester (3790)
City of London (3545) Leeds (3445) Glasgow (3400)
Kent (3110) Hertfordshire (3040) Surrey (3000)
Camden (2995) Hampshire (2675) Edinburgh (2595)
Essex (2430) Belfast (2315) Tower Hamlets (2270)
Bristol (2140) Southwark (2090) Liverpool (2065)
Cardiff (2045) Oxfordshire (2035)
Conclusion: Of those working in cities, 31.2% of recent graduates headed to the capital, while 68.8% selected other cities.
Myth 4: Graduates travel all over the country and abroad to work after graduation
- 58% went to work in the region they studied in
- 69% went to work in the region they were originally domiciled
- Only 18% of graduates went to work somewhere they were not connected to
Conclusion: Graduates are much less mobile than commonly assumed.
Myth 5: You’re better off not going to University
- Student loan repayments aside, in earnings terms the average graduate salary in 2016 was £32,000 compared to the average non-graduate salary of £26,500.
- Over time, of course, it will be interesting to see how many prospective students are attracted to graduate level apprenticeships as opposed to full or part time degrees.
Conclusion: There are differences in salaries within different sectors. However there is an overall difference between the levels of pay for graduates and non-graduates.
Myth 6: Leaving the EU will be disastrous for the economy
- Nearly 40% of businesses surveyed had seen employment rise over the past 12 months, while only 15% had reduced employment.
- A smaller but still positive net balance of companies expected to increase staff numbers over the next 12 months.
Conclusion: At this stage, it is too early to be certain of the full impact of Brexit on graduate employment as there is insufficient information available.
- The graduate labour market is fundamentally sound with a long-term trend for expansion
- Outcomes remain good, with low unemployment
- A reduction in the numbers of graduates may lead to pressure on supply, leaving graduate jobs unfilled
- Skills shortages are significant and worsening
- There is little evidence of significant Brexit effect on early graduate labour market at the moment
- Graduate mobility seems to be falling- it is hard to say whether this is a trend
The key message is: always question the legitimacy of your information sources and check their currency. It’s easy for statistics to be manipulated to tell a particular story. If quoted from so-called ‘trusted’ sources myths can quickly gain currency and distort reality.
*Data sourced from: Department for Education, Centre for Cities, Higher Education Statistics Agency, Office of National Statistics, British Chamber of Commerce, Bank of England.