The graduate labour market

• Previous Surveys
• Graduate Employment and Unemployment
• Occupations of Graduates Aged 20-29
• Graduate Salaries
• Further Reading
• Useful Web Sites

Moving On, a recent survey undertaken by researchers at the University of Warwick provides a fascinating and encouraging insight into the career outcomes of graduates from 1995, three and a half years after graduation.

• 82% of employed graduates reported using their skills and knowledge developed during their undergraduate courses in their current jobs.
• Over half of all respondents had participated in further (non-leisure) study since graduation. Many of the courses were accessed directly through employment.
• As degrees become more commonplace and necessary, more and more employers are interested in evidence of the skills and competencies of graduates. Work experience was perceived to be a crucial key to the labour market amongst interviewees.
• Three and a half years after graduation, less than 10% of graduates are in a 'non-graduate' occupation. Employment in 'non-graduate' occupations was associated with particular subjects, gender, entry qualifications and degree class.
• Three and a half years after graduation, only 2% of economically active graduates are unemployed.

A recently published report, The Employment of UK Graduates, stated that 37% of 1994/5 UK graduates surveyed in 1998 felt that their work situation was better than their expectations when entering higher education. A further 39% thought that it was as expected, leaving 17% who thought it worse and 8% much worse. Subject studied appeared to have relatively little effect.

Table 1 shows the graduate employment and unemployment rates from 1992 to 2000, measured six months after graduation. The unemployment rate six months after graduation in 2000 was 5.5%, the same as 1999, and the employment rate stayed virtually unchanged at 68.4%.

Moving On, finds that it took about two years after graduation for unemployment to stabilise at the lower level of about 2-3%. However, unemployment six months after graduation is indicative of future labour market difficulties; graduates unemployed six months after graduation spent longer periods unemployed and had lower future earnings. Interestingly, unemployment amongst leavers from new universities was no worse than that among leavers from old universities.

Whilst this is very encouraging news for potential graduates, it does also reflect the overall economy-wide picture, with falling unemployment and rising employment rates. These changes are partially due to the expansion of the service sector and increasing numbers of women in employment.

Table 2 shows the 'top 10' subject areas by highest employment rate, lowest unemployment rate and highest rate of further study. It highlights the diversity of career outcomes by subject.

• Accountancy, Building, and Civil Engineering make both the lowest unemployment rate and highest employment rate top 10s.
• Civil Engineering boasts the lowest unemployment rate, followed by HND. The low unemployment rate for HNDs is partially due to the 62.5% who go on to further study (typically a degree).
• Similarly, Law has low unemployment due to the high percentages who undertake further study, typically for professional law qualifications.

Table 3 shows the distribution of occupations of graduates over the age groups 20-24 and 25-29. The information is taken from the June-August 2000 quarter of the Labour Force Survey (LFS), and is reported in the Spring 2001 edition of Graduate Market Trends.

• There are higher proportions of graduates in the 25-29 age group in professional, graduate level occupations.
• A lower proportion of graduates in the 25-29 age group are working in clerical & secretarial, sales and other occupations.

This indicates a level of career progression, and shows that graduates aged 25-29 are more settled into their long-term careers. According to the same survey, only 21% of employed graduates aged 25-29 are in non-professional level employment. This compares to over 80% for those with NVQ level 2 or below and 74% of those with A-level equivalent qualifications.

The figure above shows average graduate salaries from Prospects Today, a leading graduate vacancy bulletin, in the year to May 2001, broken down by different occupations. Most of these jobs are for new or recent graduates or 'second-jobbers'.

• The average salary offered to graduates in Prospects Today is £17,786; a rise of 2.5% from the previous year.
• On average, graduates entering management consultancy and IT can expect salaries well above this.
• Figures from the LFS show that graduates aged between 20 and 24 are earning on average 25% more than those with A-level equivalent qualifications.

Graduate earnings reported in the press need to be interpreted with caution. On-target earnings (OTEs) may exaggerate the average salary paid, whilst some salaries may be basic salaries, which do not include commission, bonus payments or other perks. Salaries also vary across regions, the obvious example being the higher salaries offered in London to counterbalance the higher cost of living.

Surveys focusing on graduates in graduate jobs (eg the Association of Graduate Recruiters) are likely to report higher average salaries than those selecting a more representative sample of the graduate population. The latter are likely to include graduates in lower paid, 'non-graduate' jobs.

Moving On

The Employment of UK Graduates: comparisons with Europe and Japan, The Open University, 2001.

Graduate Market Trends, CSU, Quarterly.

Prospects Today, CSU, weekly.

Graduate Salaries and Vacancies, Association of Graduate Recruiters, 2001.

Prospects - a leading HE careers web site, including What Do Graduates Do? and how much could I earn?