CIPD report on graduate over-qualification sparks overdue debate that is set to run and run

By Ben Willmott, CIPD Head of Public Policy, @Ben_Willmott

I was slightly taken aback by the dismissive response from some representatives of the UK’s higher education sector to our report, Over-qualification and skills mismatch in the graduate labour market, which highlighted the scale of the country’s graduate-over qualification problem.

On Thursday, Bill Rammell, former Minister for Higher Education under Tony Blair, and now Vice Chancellor of Bedfordshire University dismissed the findings of the report on Radio 4’s Today Programme. He suggested that because some of the data in our report was from 2010, our findings were not worthy of any consideration. He also said that because most commentators, including the UK Commission for Employment and Skills (UKCES), predict that much future job creation in the UK will be in high-skilled occupations, we don’t have a problem.

In addition, we had the Higher Education Funding Council for England citing figures from the 2013/14 annual Destination of Leavers from Higher Education Survey, which pointed out that of those graduates that had managed to find employment, about 70% were in professional or managerial occupations within six months of graduating, so we should all calm down.

Let’s take these criticisms one by one. Firstly, the accusation that one of the headline findings from our report, that 58% of UK graduates are in non-graduate jobs, was from 2010 data and therefore not relevant. This data is the most up-to-date available from the European Social Survey, which gives us a Europe-wide perspective.  Trends like these tend to change slowly and the authors of our report, Professor Ken Mayhew and Dr Craig Holmes, believe that, if anything, graduate over-qualification is likely to have increased since 2010 because, in a tough labour market, graduates are likely to have to have out-competed non-graduates across the jobs spectrum.  But if something more up-to-date is required, there is the finding from the OECD's 2012 Survey of Adult Skills that  '… 30% of workers in England and Northern Ireland reported that they have higher qualifications than was deemed necessary to obtain their job – the highest rate of over-qualification after Japan'.  Or, indeed, the results of our own Employee Outlook survey, conducted in autumn 2014, which found that 42% of first degree graduates and 44% of higher degree graduates thought they were over-qualified for their current job.

Secondly, there is no dispute over the projected increase in high-skilled jobs in the UK or the fact that we will of course continue to need hundreds of thousands of graduates to fill these roles in the coming years. What our report highlights is that the supply of graduates in the UK has consistently outstripped the creation of high-skilled jobs since at least 1996, and while this trend is prevalent across the OECD, it is particularly pronounced in this country and has some negative consequences which need to be considered.

Finally, let’s turn to the Destination of Leavers from Higher Education (DLHE) survey with its reassuring finding that 70% of UK graduates that manage to find work are in professional jobs within six months of graduating. Analysis by the Edge Foundation, however, suggests that the true figure is closer to 40%, and that graduates in some disciplines fare even worse. The Edge Foundation found, for example, that some of the jobs categorised as ‘professional’ included estate agents, police constables, fitness instructors and dispensing opticians.  The DLHE survey also found that just 42% of graduates who had managed to find a ‘professional’ job said that a degree was a formal requirement. David Habourne, chief executive of the Edge Foundation commented: “So many of the professional occupations listed by the Higher Education Statistics Agency (HESA) can be accessed by people without degrees, who have vocational qualifications or who have worked their way up via an apprenticeship.” So let’s be clear, the DLHE/HESA data has little or no relevance to the debate about graduate over-qualification. Instead, this BBC Newsbeat Twitter feed on the issue is a better barometer of the state of play.

What was not disputed from our report was the finding that if you compare graduates to non-graduates doing the same job in the majority of instances there is no resultant change to the skills requirement for that role. Simply increasing the qualification level of individuals going into a job does not typically result in the skills required to do the job being enhanced – in many cases that skills premium, if it exists at all, is simply wasted. This situation is unsustainable given that the Government estimates that 45% of graduates will be unable to repay their students loans. In response to the findings in our report, CIPD is calling for a review of education funding to ensure the system is delivering desired returns to graduates, other learners of all ages, employers and the economy.

At a time when the UK’s further education and vocational training budget desperately needs more resources, we all have a vested interest to ensure our investment in education and training is delivering the right skills for individuals at different stages of their working lives. Professor Alison Wolf, in her recent report Heading for the precipice, comments “We are producing vanishingly small numbers of higher-technician level qualifications, while massively increasing the output of generalist bachelor degrees and low level vocational qualifications. We are doing so because of the financial incentives and administrative structures that governments themselves have created not because of labour market demand, and the imbalance looks set to worsen further. We therefore need as a matter of urgency to start thinking about post-19 funding and provision in a far more integrated way.”

Sir Keith Burnett, Vice Chancellor of the University of Sheffield, has also highlighted the need for the UK to re-think the current status quo, where university is too often simply the default option, and invest more in other more inclusive education and training opportunities.
Writing in the Daily Telegraph, he says: “What future do I want to see? One with diversity and quality, where students choose courses of study because they are right for their futures, whether traditional or apprenticeships, by dreaming spires or in local FE colleges. I want to see a system of funding not built on privatised debt. I want students to be able to earn and learn, or to choose positively to apply for a job with training in a thriving economy.”

The University of Sheffield is already taking steps in this direction and now has 600 advanced apprentices on its books. Sir Keith comments “These students don't sign loan agreements, they go to job interviews with companies who are committed to funding their education and who know they will benefit from such superb skills. They are gaining qualifications and experience without debt. It is what I call access.”

The Government has stated its commitment to boost the number and quality of apprenticeships, however we need a bigger debate about how to strike a better balance between academic and vocational qualifications and routes into employment and how to ensure the right support and incentives are in place to achieve this.

Just as importantly, though, we need a strategy focused on generating more high-skilled jobs.  This means employers must also step up their efforts.  Better engagement with academic and vocational education providers – right the way up from school to university – would help the education system to inculcate and develop the knowledge, skills and attitudes that employers say are lacking in those leaving full-time education.  We also need more organisations where employees are able to develop and grow along with their jobs, rather than the job description being a strait-jacket. This means more investment in developing leadership and management capability building more progression routes, improving work organisation and job design so that people’s ideas and skills are used more effectively in the workplace and – perhaps most important of all – building a culture and ethos based on trust, respect and the willingness to take and accept risk.

Read Mark Beatson's blog Over-qualification: who is affected and what are the consequences?

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  • Anonymous

    Honestly, I don't think the average person would have paid any attention to the blandishments of Bill Rammell - other than those who find it convenient to use his 'version' of reality.

    How often do we hear of 'skills shortages' - without any of these skills being named.What exactly are the skills we are short of?

    IT skills, maybe? Well, let's look at University of Bedfordshire's output - sampling their courses we see only 60% of graduates manage to find employment (any employment, that is). Of these 36% are in neither managerial nor professional work. So, where are the vacancies/jobs for these 'sought after' skills? Could they have been outsourced to 'cheap labour' states outside of the EU by any chance?

    University of Bedfordshire, like all the other HE institutions, are businesses - they're doing very nicely without proving their worth. It is a great pity the Careers IAG profession has been so undermined that young people, career changers et al cannot access truly independent advice and guidance. There are no real workforce planning initiatives nor mechanisms for this to be developed. We have the consequence of that: wasted lives of young people wrongly employed, time and money devoted to the wrong initiatives, job market failures, etc etc.