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CIPD - The new University Challenge: Justify top fees as only half of graduates get graduate-level jobs

Research shows that a third of recent UK graduates earn well below the national average wage, while women are paid less than men six months after graduation

  • Just half (52%) of graduates are in graduate-level jobs six months after graduation
  • Almost a third (29%) of graduates are on a salary of less than £20,000 six months after graduation, well below the UK average of £28,300
  • Women on average are paid £21,500 six months after graduation, compared to an average salary of £24,000 for male graduates
  • STEM (Science, Technology, Engineering and Mathematics) graduates are more likely to be unemployed after six months than the average graduate, despite the Government focus on encouraging people to pursue those subjects

UK universities should be prevented from charging the maximum level of tuition fees unless they deliver better graduate outcomes, a new report from the CIPD, the professional body for HR and people development, has recommended ahead of the Budget next week.

The graduate employment gap shows that just half (52%) of graduates secure a graduate-level job six months after they finish their course. The Government’s official figure is inflated to 77% by including ‘associate professional and technical occupations’ such as dancers, choreographers, fitness instructors, youth and community workers, despite the ONS stating that these jobs ‘do not require a degree’.

The findings call into question the current balance between the Government’s investment in university education relative to the investment in the UK’s under-funded vocational and adult skills education pathways.

The report also shows that the continued focus on boosting graduate qualification rates in the UK appears to have had little effect on productivity, with the UK languishing in sixteenth place in GDP per hour among OECD countries, despite having the fifth highest proportion of residents educated to degree level.

Lizzie Crowley, skills adviser at the CIPD, said: 

“As we look ahead to the Budget next week, the Government should consider linking tuition fees to graduate destination data in order to prevent higher education institutions charging top rate fees while delivering bottom rate outcomes. 

“This report shows that the preoccupation of successive governments with boosting graduate numbers is leading to high levels of over-qualification and potentially skills mismatches, which the OECD suggests undermines productivity growth. Many people in ‘graduate jobs’ are actually in roles that don’t require degrees, and with the spiralling costs of university students need to ask themselves whether a degree path is the best route into their career.

“We need much better careers advice and guidance to ensure that young people are equipped with the information they need to make informed decisions, alongside high quality alternative vocational routes into employment that offer routes other than university education.”

The research also finds a clear gender pay disparity for recent graduates, even if they study the same course at a top ten university.

The findings were consistent across subject area, with male graduates enjoying a higher salary regardless of the areas of study looked at in the research. The research showed that, six months after graduation:

  • More than a quarter (28%) of male law graduates were earning £30k+, compared with just over one in ten (14%) of female law graduates
  • Nearly three-quarters (71%) of male medicine and dentistry graduates were earning £30k+, compared to three in five (62%) female graduates
  • More than half (54%) male veterinary sciences graduates were earning £30k+, compared with just two in five (39%) of female graduates
  • Female graduates who managed to secure a job in the top occupational band (managers and senior officials) were almost twice as likely to be paid less than £20,000 as their male counterparts, with 25% of women in this category compared with 15% of men

Lizzie Crowley continued:

“It has long been claimed that the differential in pay between male and female graduates was to do with their chosen subjects of study, but this data proves that the gender pay gap is baked in from the point of graduation. Regardless of what women study, or indeed where they study, they are paid less than their male peers.

“If we are going to eliminate the gender pay gap then employers need to ensure they are paying fairly right across their organisation from day one, including among recent graduates.”

Finally, the research also reveals that, despite a strong government focus on boosting Science, Technology, Engineering and Mathematics (STEM) subjects, STEM graduates are more likely to be unemployed six months after graduation than graduates from other disciplines. Compared to a national unemployment rate of 4.9%, STEM graduate unemployment rates are:

  • More than 8% for computer science graduates
  • More than 6% for physical science graduates
  • 6% for engineering and technology graduates
  • 6% for mathematical science graduates

Lizzie Crowley said:

“The Government has continually focused on boosting STEM skills, and encouraging graduates to pursue those subjects at university, but that investment doesn’t appear to be translating into better graduate outcomes.

“Until we address this problem, and do more to identify the core skills that make STEM subjects so valuable, additional investment in STEM risks being wasted.”

Original article link: https://www.cipd.co.uk/about/media/press/graduate-qualifications

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