First degrees: overview

The economic slowdown and What Do Graduates Do?

2008 has been a year of turmoil in the financial and property sectors. The effect of this is feeding through to the job market, with jobs cuts being announced by some major financial firms and the construction and manufacturing industries. Government figures have already been showing rising unemployment and fears abound that the UK is heading into a recession.

What Do Graduates Do? a review of the outcomes of those who graduated in 2007. It is a snapshot of what graduates were doing in January 2008, when the credit crunch crisis was still at an early stage. Therefore, it does not reflect the picture of the current graduate job market.

Outcomes of 2007 graduates

Figures for 2007 first degree graduates reveal that unemployment fell to 5.5% from 6% the previous year (see Table 1), and significantly below the 6.6% figure for 2003 graduates, when the economy was still recovering from the IT recession. Corresponding to a lower unemployment rate was a higher percentage entering employment and, to a lesser extent, going on to further study or training.

As expected, unemployment varies amongst subjects. Only 0.2% of medicine graduates and 1.7% of nursing graduates were still looking for a job six months after graduation. Other subjects with below average unemployment include civil engineering, architecture and building, law, sports science, environmental sciences, modern languages and geography. On the other hand, with unemployment at 9.5% and 8.5% respectively, relatively high percentages of IT and art and design graduates were out of work.

These figures, as with all other data in What Do Graduates Do?, need to be interpreted with caution. Six months after graduation is only a very early stage in a graduate’s career, when many are still exploring various opportunities and getting settled in the job market. In addition, unemployment for IT, although still high, was at its lowest for five years. Whether this downward trend will continue amid the recent economic issues, however, is currently unknown.

Types of work

Looking at the types of occupations that graduates went into, 2007 figures have shown a large year-on-year increase in numbers (of over 1,000) entering business and financial professions; in particular, chartered accountants, financial analysts and personnel and recruitment consultants. If we look at the finance industry alone, however, there has been a 2.7% year-on-year drop in the number of graduates entering the sector.

Our research also shows that more graduates were going into:

• Arts, design, culture and sports professions (up by over 800 graduates), including fine art and graphic artists, journalists and editors, and sports instructors.
• Social and welfare professions (up by just under 700 graduates), in particular social workers, housing and welfare officers, education/learning support workers, psychologists. There were, however, fewer probation officers.
• Health professions (up by over 500 graduates), including nurses (although not non-hospital nurses which have seen a year-on-year fall in numbers), and physiotherapists.
• Other professionals, associate professionals and technical jobs (up by over 350), including architects, surveyors and laboratory technicians.

Fewer 2007 graduates have entered commercial, industrial and public sector management (down by 450 graduates). However, there were also fewer (by around 2,000) graduates going into clerical, catering, retail and customer service types of ‘non-graduate’ jobs.

Employment in ‘graduate occupations’

Measures of unemployment and employment only give a partial view of the recruitment picture. In recent years, with the expansion of higher education, many people have raised issues about the quality of the jobs graduates are entering into. Using the graduate job classifications developed by Professors Peter Elias and Kate Purcell for their study Seven Years On, the types of work that new graduates went into over the last four years were analysed to see whether there have been any changes in the percentages of graduates going into graduate-level occupations. The results, shown in Table 2, reveal that not only have employment and unemployment remained stable in recent years, there has also been a steady increase in the percentages of graduates entering graduate-level occupations (in particular, modern and new occupations) – an indication that the graduate labour market, at least in 2006/07, has not yet reached saturation.

How much do they earn?

Amongst first degree graduates working full time in the UK who have reported their salaries in the DLHE survey, the average salary was £19,300, an increase of 4.3% from the previous year’s figure of £18,501. Unsurprisingly, graduates working in London reported the highest mean salary at £22,479, followed by those working in the South East, at £19,306. Although salaries in Northern Ireland (£17,371) and Yorkshire and the Humber (£17,470) were the lowest amongst all UK regions, these regions also have lower costs of living.

Table 3 shows some of the salaries by types of work reported in the DLHE survey, which gives an insight into the levels of pay for some of the work categories covered in What Do Graduates Do?. For all types of work (including those not reported in Table 3), the highest average salary (£25,053) was reported by protective service officers, which include those working in the armed and police forces. Health professionals, including doctors, dentists, psychologists and pharmacists, commanded the second highest average salary, at £24,968.

Occupations with salaries at the lower end include administrative work, with pay typically around £15,000 to £16,000. Many graduates take on these types of work soon after graduation to get experience and a foot into the job market. Research, such as Class Of '99, has consistently found that many of these graduates will gradually move into higher level occupations in the months to come.