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Understanding Graduate Unemployment
This year's Destinations of Leavers from Higher Education Institutions survey, which considers destinations of leavers six months after graduation, is likely to show a percentage increase on last year's graduate unemployment figures, given that we know there are fewer jobs available to all members of the UK workforce. However, it is important that we are clear about what the statistics really mean, rather than rely on media hype.
The Office for National Statistics uses an age range of 16-24 - and this is a complex age group. Individuals are included if they ‘are available for work' for even a small number of hours per week - so those who are seeking part-time employment during full-time study are included in the figures. This is crucial for all members of this age range: in-depth analysis of the different groups within the age range must be undertaken to ensure any measures to support young unemployed people are appropriate to their specific needs.
It's also useful to remember that there are different versions of the Destinations survey. The regular survey is a snapshot at 6 months after graduation. The other version is the longitudinal survey, which considers destinations three and a half years beyond graduation. The rationale for the longitudinal survey is to provide a more accurate picture of graduate career patterns: in the six months beyond graduation, work patterns may be affected by periods of travel or temporary work while graduates find appropriate, better-paid or preferred work. Three years beyond this, graduates are more likely to have settled into a regular work pattern or chosen a particular career.
There have been two longitudinal reports to date. The first considers graduates from the 2002/2003 cohort, the second is for the 2004/2005 cohort. When the latest report was published in August 2009, the media reported that graduate unemployment had increased from 2% in the first study to 2.6% in the second, but failed to mention that graduate employment had also increased, by over 2%. The figure that had decreased was the number of graduates in full or part-time further study. For this year's cohort, it is very likely that more will flock to further study to stay out of the labour market - as happened in the 90s recession.
Another useful finding was that there had been an increase in the number of employed graduates finding work in ‘graduate occupations' - from 80% to 81.1%. It will be interesting to see how this year's cohort fares: while there have been many reports of high-profile graduate recruiters reducing their intakes this year, this may not necessarily mean a decrease in demand for graduates. Indeed, the government's entire skills policy, even during the peak of the recession, is formed on the basis that the future workforce must be skilled at higher levels and without question job-seeking graduates fare better than those with fewer or no qualifications.
None of this is intended to suggest, however, that this year's graduates aren't hard done by. The majority of first degree graduates this year were the first to pay top-up fees, giving them an unprecedented level of debt just for the cost of tuition. The search for a graduate-level job, with a graduate-level salary, is more difficult than ever given that there are more graduates and fewer of the traditional employers recruiting. When increased tuition fees and debt were sold on the back of the promise of a lifetime of higher salaries, the immediate reality of low-paid work or unemployment is hard to swallow.
The recession forces us to focus on the day-to-day issues, but we know from experience that national and international labour markets and economies change drastically during periods of economic difficulty. Recession Britain, an ESRC report which compares the impacts of recessions on a number of aspects of British life, offers several insights. For those graduating during a recession, the report shows there is a risk of lifetime earning losses. However, the report also shows that more severe impacts are likely to be felt by those with few or no qualifications and particularly by school-leavers entering the labour market during the recession.
Globally, there are further challenges for graduates on the horizon. Regardless of the outcome of the next general election, a higher education review will be taking place, and a major element of this will be student funding. The Higher Ambitions paper from BIS expresses the need for diversity of ‘models' of higher education - so making links from vocation learning to HE more explicit, increasing work-based opportunities for higher learning and more options to study at a higher level at home.
Education, globalisation and the knowledge economy
A report from the Teaching and Learning Research Programme (TLRP), funded by the ESRC, has investigated the global race for skills to gain a deeper insight into the development of a competitive knowledge economy. Interviews with global employers have revealed that knowledge-based work is already being outsourced away from ‘western' countries, from legal work to highly-skilled technical work - the notion that it's just call centres and low-end manufacturing is simply out of date. Many large, global recruiters have tended to recruit graduates from the UK for knowledge-based work, but this shift to cheaper workforces is a source of concern.
Further, global employers are seeking to recruit ‘new' kinds of graduate employees, with multi-cultural understanding and language skills at the forefront of their requirements. Bearing in mind that for such recruiters the talent pool is worldwide, the UK's graduates will need to understand and develop employability in global terms. Language skills are not typically high on the list of employability skills an average UK graduate can claim. As national recessions progress global recruiters will find themselves in ever-more powerful positions.
It is hard to predict what might happen once we come out of recession, although we can do our best to get past the media misreporting and understand the realities facing today's graduates. But, while government efforts are rightly being made to reduce immediate graduate unemployment, we should not take our eye off the ball. High levels of graduate debt, increasingly competitive graduate workforces both within and outside of the UK and, perhaps, an insufficient understanding of global higher skills needs are the real challenges for future graduates which must be addressed.
Read the full report.