New graduates are being massively under-employed when they try to join the labour market, with thousands taking their first step in their career in jobs that don't require their hard-won degrees, a new study has found.
The research, by the Chartered Institute of Personnel and Development (CIPD), found graduate over-qualification has reached “saturation point”, with the newly-graduated being hit by a "skills mismatch" after the UK experienced one of the highest rates of higher education expansion across Europe over recent decades. However, it “has not seen an increase in high-skill jobs matching that expansion”.
The UK has a comparatively high percentage of graduates in non-graduate jobs, standing at 58.8 per cent, a percentage exceeded in Europe only by Greece and Estonia. In contrast, countries such as Germany, the Netherlands and Slovenia, which have a history of strong vocational training, have 10 per cent or less of graduates in non-graduate jobs.
The situation is leading to a range of "negative consequences", including employers now “using degrees as a requirement when recruiting for traditionally non-graduate roles, despite no resultant change to the skills requirement for these jobs”.
This can lead to a situation where many graduates are replacing non-graduates in less demanding jobs, or entering jobs where the demand for graduate skills is either non-existent or falling.
The trend is particularly prevalent in occupations such as construction and manufacturing where apprenticeships have been important in the past.
CIPD chief executive Peter Cheese said:
The assumption that we will transition to a more productive, higher-value, higher-skilled economy just by increasing the conveyor belt of graduates is proven to be flawed
Simply increasing the qualification level of individuals going into a job does not typically result in the skill 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 per cent of university graduates will not earn enough to repay their student loans.
The report said the lack of highly skilled jobs available creates an “unnecessary debt burden for too many young people entering the labour market”.
"Some of those who pursue more education in order to engage in this form of competition will ultimately lose out, as there are only so many good jobs available," it added.
The CIPD makes several recommendations, including calling on the government to ensure its productivity plan includes a specific focus on creating more high-skilled jobs.