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Many graduate careers on hold, according to ONS statistics

The recent suggestion here that university is now too expensive to be the best option for many young people certainly struck a nerve.

According to new figures from the Office of National Statistics (ONS), it also seems to have hit the mark:

The ONS reports that, over the past decade, the percentage of recent graduates working in lower skilled jobs in the UK has risen from 26.7% in 2001 to around 35.9% in 2011.

Other interesting statistics:

  • The number of recent graduates has increased by around 41% over the past decade
  • The 2008/2009 recession took the greatest toll on the employment rate for recent graduates compared to all graduates and non-graduates.
  • Graduates with an arts degree earn the least at £12.06 per hour.
  • Those with a degree in medicine/dentistry earn the most at around £21.29 per hour.
  • Non-graduates earn around £8.92.
  • New graduates (those graduating within two years) have the highest unemployment rates.

Leaving higher education in the teeth of a recession is obviously not great for new graduates. Then again, it’s not exactly a bed of roses for those who skip university – but they at least also skip the high debt and foregone earnings that going to university now entails.

According to a recent article on graduate unemployment in The Guardian:

Graduates leaving university found it harder to get jobs in 2011 than students finishing A-level courses, as youth unemployment hit its highest level since the 1980s, official data shows.

In 2011, 20% of 18-year-olds who left school with A-levels were unemployed compared with 25% of 21-year-olds who left university with a degree, according to figures from the Office for National Statistics.

Graduate unemployment rates were almost on a par with those for people leaving school with just GCSEs, with 26% of 16-year-olds with these qualifications out of work.

Interestingly enough, after a bit of waffle from a union leader about the importance of higher education, the article notes that:

All of the UK’s “big four” accountancy firms, which between them recruit several thousand graduates each year, have established degree-equivalent school-leaver training programmes, including Ernst & Young which launches its programme in the autumn.

Stephen Isherwood, head of graduate recruitment at Ernst & Young, said […]:

“There is a sense that the mantra of the last few years that everything is about university is not necessarily right, and that A-level students should really be thinking about what they want to do and whether that means going to university, and making sure they get the best deal for themselves.”

Please read my original long discussion about the pros and cons of university – and the great comments from readers that followed – if you want to know more.

You can also download the full ONS release on graduate careers and their fortunes in the labour market.

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{ 14 comments… add one }
  • 1 gadgetmind March 6, 2012, 12:43 pm

    We pay grads £25k+, with a fast escalator for the first two years, and we’re really struggling to recruit. We’re getting people, but not fast enough to keep up with growth.

    If I interview one more candidate with a shiny 1st but not a clue about the subject then I’ll scream!

  • 2 MCF March 6, 2012, 1:03 pm

    The graduate schemes are so competitive. I was given but a tiny glimpse at a few. I settled for a job to which i was over qualified in terms of education level required. The majority of my peers had come out of college/6form. One of my peers even started the job after attaining only GCSEs. Words could not describe my anger at the lack of opporunity i was given with my degree, despite my countless efforts to get a job in the city under a graduate scheme.

    Whats ironic is i am now undertaking further qualifications to boost my ‘appealability’ … a degree is seemingly not enough in current times.

    I can only hope that the drop in university applicants due to the costs will carry on for a few years, making my degree more valuable…. De-inflation you could call it i guess.

  • 3 Damien March 6, 2012, 2:20 pm

    So this is how the education is turning in UK where people don’t want to pay taxes to have almost free university for everybody like some other european countries …

    There is more and more foreigner students for example in France because it’s almost free. Then they come back to UK once they got the education almost free.

    But it doesn’t stop UK politics then to tell others Europeen countries how they should handle their economy, education, etc …

    We should taxe all students coming from countries like UK (it’s not the only once) because they are abusing the system of other countries…

  • 4 ermine March 6, 2012, 4:05 pm

    I left university in Thatcher’s first recession. It was grim and I was unemployed for six months. I took a technician job (non-uni grade job in those days) for six months and then moved from there. It is easier to get a job from a job, so it may be worth considering a job below graduate level if you can get one, then shifting.

  • 5 Stefan March 6, 2012, 6:13 pm

    Gadgetmind, what company do you work for?

  • 6 Dave March 6, 2012, 9:31 pm

    I work as a software engineer for a relatively respectable outfit and we can hardly get enough applicants to fill vacancies even if we accepted everyone unconditionally (not much of an exaggeration, genuinely).

    However comfortable I am now though, I’m not sure I would do it again if it meant a £36k hit coming out the far side (with early repayment penalties and everything, it seems…)

  • 7 gadgetmind March 6, 2012, 10:59 pm

    @stefan – Imagination Technologies.

    OK, so we’re fussy, and we’d rather have an empty seat that the wrong backside in it, but it really shouldn’t be this hard. UK universities really should be coming up with the goods.

    Over recent months 75% of the offers my site has made have been to non-UK grads, which is deeply depressing.

  • 8 gadgetmind March 7, 2012, 9:27 am

    @ermine – I ran my own small companies all the way through the Thatcher years, but I don’t think I could do it now: too much red tape, silly rules, and government meddling.

  • 9 Rob March 7, 2012, 10:05 am

    I would highly recommend anyone do a computer science or computer programming course (tempted to spend time learning such skills if a job takes a while to get)… it would appear that you can do well out of such a degree. For other degrees, however, if you want those graduate jobs you’re going to need to follow the ‘graduate procedure’… that means you have to apply for internships in your penultimate year (or before) and work hard to ensure you get one.

    I took the summer off to advance my education in business and investing, learning about what makes some companies better than others etc and would have been better off career wise not doing so. That said I enjoyed doing it greatly and I learnt an awful lot that affects my financials through my investments… however, if you don’t want to be put down as a Black Sheep you want to toe the line and follow the procedure. Anyone read Liar’s Poker… good account in there of what not to do if you want to toe the lines.

  • 10 ermine March 7, 2012, 2:10 pm

    @Rob interesting, and I hope to God that you’re right. My company, a large FTSE100 firm that uses software in delivering its services though not selling S/W as such used to do software among the many things they did, but there has been an increasing trend to force things into standardised models and platforms, basically winnowing out the more interesting niches. Then outsourcing most of the work to India, which is something that started a few years ago and is gathering pace.

    If I had children I would try and warn them away from going into anything to do with computing, it is the ultimate globally relocalizable profession. Once Indian salaries rise Africa may be the next global IT hub, and of course al this competition is a downforce on salaries. IMO IT was the place to be from the late 1980s to the early 2000s.

    However, it’s perfectly possible that my view is being overly skewed by what happened in my company, though on IT courses I’ve been on a few years ago the outsourcing theme was common among other participants. Hopefully I have the wrong end of the stick. The coding side of IT was something we used to be quite good at in the UK!

  • 11 maria@moneyprinciple March 9, 2012, 10:36 am

    Some interesting points but I need to make three remarks:

    1) One has to distinguish between ‘having a degree’ and ‘having education’. Having a university degree is valuable not because of the knowledge but because of its scarcity (or otherwise). The drive to get 50% of an age cohort in higher education will naturally ‘reduce the value’ of degrees – this is why Universities today live on Masters programmes. I call it inflation of education.

    2) Part of what you argue is a direct and immediate result of the Government’s employability agenda. It wrongly assumes that the State is the autority on what makes people employable (it is labour markets) and pushes certain HEIs into offering vocational training rather than education. Of course, in this case going to university is a waste of time, effort and money. Interestingly, this affects a statum that didn’t traditionally go to university adn they still get the same jobs (what you refer to as ‘lower skilled jobs).

    3) Top accountancy firms have always had their training programmes because they rarely recruit people who have studies accounting and finance. The argument is that they need people who can think (the function of university education) and training them in accounting is a minor matter. Hence, if you look at the recruitment ground, top accountancy firms recruit people with clasics and philosophy degrees from Cambridge and Oxford.

    The reason I go into this detail is because your article is good; but building strong conclusions on statistics without getting into the reasons behind it can be misleading and send the wrong signals. Getting education is still the best thing one can do; getting a degree is as well but it depends what degree and where. Young people also have to be prepared that they will stand out from the crowd by using measures different from the ones taken for granted until recently.

  • 12 Savvy Scot March 12, 2012, 11:26 am

    The UK Universities needs to proportion the number of places they offer in degrees to the number of jobs available in the field. Take Forensic Science for example; there are more students graduating each year in the UK than the TOTAL amount of Forensic jobs in the UK. Outrageous!
    Then you get some Universities offering degrees in random areas – like Surf Studies!

  • 13 maria@moneyprinciple March 12, 2012, 1:55 pm

    @Savvy Scot: Do the universities need to do that? Normally this is done through labour markets – if there are no jobs, students stop applying to courses, university peeps get the message. Planning such things usually ends in disaster – have we forgotten what happened in Eastern Europe? It wasn’t the ideology that led to it but the central planning of the economy!

  • 14 ermine March 12, 2012, 3:39 pm

    The Numerus Clausus seems to work pretty well in Germany 🙂 Whereas I am not sure that the UK university results support the thesis of

    if there are no jobs, students stop applying to courses, university peeps get the message

    because we’ve distorted the marketplace in other ways. Because the jobs market has polarised to the top and bottom, governments have designed a system to incentivise 50% university participation, which implicitly means people of average intelligence and above. People at the lower end of of the ability spectrum are going to have to choose easier subjects even if they are oversupplied in the labour market, ‘cos the assumption is ‘you have to go to uni to get a good job, innit?’

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