Graduate destinations in the last ten years

• Summary
• The basics
• Subjects
• How the market looked in the mid-1990s
• The effect of graduate expansion
• Other social issues
• Examining careers
• References

Summary

This article examines the changes to graduate employment in the last ten years, through the lens of the annual graduate destination surveys from 1995 and 2005, writes Charlie Ball of the Higher Education Careers Services Unit (HECSU).

1995 saw a graduate labour market still recovering from the great recession of the early 1990s, and adjusting to a new policy goal of getting a third of young people to go through higher education for the first time in British history.

Ten years later, in 2005, the number of UK-domiciled graduates had increased by 31%, whilst early graduate unemployment had dropped sharply with improvements in the economy.

Some subjects have declined in popularity, largely in sciences and engineering, and others have seen a huge increase. This change mirrors the changes in the UK economy as the traditional strengths in manufacturing have been set aside to concentrate on the service and financial sectors.

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The basics

The data referenced in this article comes from the annual surveys of graduates destinations. The First Destination Survey was superseded by the Destinations of Leavers from Higher Education Survey in 2002/3. Essentially the two surveys are similar, examining outcomes from graduates six months after they left their courses, and so for most aspects of an analysis over time, they are comparable.

In 1995, 195,810 UK-domiciled graduates left university with first degrees, and 162,020 of them replied to the destination survey. Of those 162,020 graduates, 98,575 (60.8%) went into work, and graduate unemployment six months after graduation stood at 9.2%.

In 2005, 256,460 UK-domiciled graduates left university with first degrees, and 206,965 of them replied to the destination survey. Of those, 144,515 (69.8%) entered the workplace, and graduate unemployment six months after graduation stood at 6.2%

The result is that, in 10 years, the annual supply of graduates has gone up by 60,650, or 31%, and the annual supply of graduates entering the workplace has gone up by 45,940, or 46.6%. But graduate unemployment has gone down substantially.

In terms of gender, in 1995, the numbers of women at university were just overtaking men, with 52% of graduates being women. Now it's 57.7% - representing a significant change in 10 years. One reason is the very steep rise in nursing degrees, which has led the health professions to be the most popular area for graduate starting jobs in 2005 - in 1995, management was the most favoured area.

Changes to some of the details of the survey mean that it is very hard to produce firm statistics on how many graduates in 1995 were in graduate-level jobs. Using the now-accepted definitions of 'graduate job' developed as part of the 'Seven Years On' project, run by Professor Peter Elias and Professor Kate Purcell of the Warwick Institute of Employment Research, we can see that the level of working graduates going into 'non-graduate' level work six months after graduating has fluctuated around 30-40% for years, and that there is not much difference between 1995 and 2005 [1].

The Seven Years On research also found that those graduates who did start in non-graduate jobs moved quickly into graduate-level positions as they gained experience and were able to demonstrate their abilities.

So, the overall findings show that:

• There are over 30%, or 60,000 more graduates a year now than 10 years ago.
• There are nearly 50% more graduates, or 46,000 a year, entering work than 10 years ago.
• Despite that, unemployment is down, and working graduates are not more likely to start their careers in jobs that didn't need a degree than they were 10 years ago.

Clearly, the economy has changed in a way that means we use many more graduates than we did in the mid-1990s.

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Subjects

Some of the changes between the First Destination Survey and the Destination of Leavers from Higher Education survey did affect subject groupings, and so it is not always possible to compare subject numbers in the time period between 1995 and 2005. But for a selection of comparable subjects, please see Table 1.

This analysis disguises the fact that IT degrees are currently experiencing a fall in numbers, and may have reached a temporary peak in 2004. The subject remains the largest gainer in numbers, and in percentage terms, in the last 10 years, with psychology the next largest in percentage terms, whilst business and management is just behind IT in terms of numbers. The biggest loser in terms of both numbers and percentages is chemistry.

The traditionally non-vocational degrees of history and English have both increased sharply, whilst maths and mechanical engineering have both increased in numbers in the last 10 years - although they are both currently declining.

The UK also now produces over 4,000 new law graduates a year than it did in 1995.

Some other degrees have gained prominence in the last 10 years and are now amongst the most popular - these include sports science, marketing, politics and media studies.

The net effect of the increase in young people going into university has been to push the participation rate for 18-30 years old in higher education up from one third in 1995 to 42% in 2004/05 (and in 1979, about one in eight young people went to university), and the graduating cohort has contained a steadily increasing majority of women. The government met their target of 33% participation in higher education of young people by 2000, and set the well-known new target of 50% participation by 2010.

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How the market looked in the mid-1990s

The graduate labour market was just coming out of the very serious recession of the early 1990s, and had taken some time to recover. At the worst stages (in 1992), graduate unemployment was double what it is now, with one in eight new graduates out of work, and the wisdom of expanding higher education was being seriously questioned. The government at the time had a stated goal of ensuring 33% of under 21s participating in higher education by 2000. In February 1995, the Committee of Vice Chancellors and Principles, in briefing notes, stated,

We are convinced that the consequences of an under-supply of graduates - in particular for the competitiveness of the UK economy - are far more serious than those of oversupply.

By 1995, recovery was well under way, and the economy was showing signs of being able to cope with the expansion of graduate numbers. This led to changes in the kind of advice being given in careers publications. Advice in the 1997 edition of ‘What Do Graduates Do?’, the annual publication we produce with the Association of Graduate Careers Advisory Services (AGCAS) on graduate employment, which looked at graduates from 1995, was in many ways similar to the advice that is given now. Graduates were already being told that they needed to manage their own career and personal development, that they needed excellent team-working, communication, IT, problem-solving, literacy and communication skills. Work experience was being cited as another very desirable trait - the qualities a graduate was expected to have to get work were very similar to those they have now.

But for the first time this edition of 'What Do Graduates Do?', written in 1996, contained this statement:

The number of graduates with short term employment contracts has increased, a reflection on the decline of the 'job for life'. It is likely that today's graduates will have a number of job and career changes during the course of their working life. Increasingly graduates need to be flexible, self-reliant and able to respond to change.

The previous year's publication, written in 1995, did suggest graduates needed to take charge of their own development, but didn't explicitly make statement about expected career changes. There is no suggestion that this was a very new idea in 1996 - anecdotally, the notion had been in discussion for several years prior to this - but this shows how mainstream careers information evolved with the economy.

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The effect of graduate expansion

In 2005, the Department for Trade and Industry found that the employment rate for men with no qualifications was 60.4%, and for women it was 46.2%. For graduates, the figures are 90.3% and 86.5% respectively, across all ages [2].

According to data from the government Labour Force Survey, from 1995 to 2005, there has been an increase of 2.5 million in the number of employed people over 16 in the UK [3]. But there have been differences in the way industries have gone. 3,404,000 more people are working in the service sector in one way or another, very many of them graduates. 837,000 more people are employed in banking and finance - a heavily graduate industry. But 1,046,000 manufacturing jobs were lost between 1995 and 2005, and very many of those would have been below graduate level. Looking at education, health and others in the public sector, 1,735,000 jobs have been created, many of them graduate level. Economic projections suggest that this trend - for non-graduate jobs to be lost and replaced by graduate positions - will increase, and that has been one of the key rationales behind the drive for 50% participation by 18-30 year olds in higher education by 2010 [4]. So far, these projections appear to be accurate.

One big change in the economy has been the modification of workplace culture. The greater number of women entering the workplace at all skills levels may be a factor, but the notion of flexible working, of being able to have career breaks for family and personal reasons and similar ideas have really taken root and graduates increasingly speak of work/life balance issues as being as important, if not more so, than pure financial reward. Companies are having to adapt, and employers that want to employ talented graduates need to consider not just salaries, but the benefits that they offer.

Of course, there is a suspicion that some employers are keen to offer flexible working in lieu of financial benefits, but certainly there has been a change in workplace culture in recent years that means that those who wish to spend more time working from home are no longer always seen as avoiding work.

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Other social issues

This is best summarised in an earlier article 'Beyond the financial benefits of a degree'. The Department for Education and Skills (DfES)-funded Centre for Research on the Wider Benefits of Learning did research in 2005 that found that, amongst other things [5]:

• Graduates enjoy higher quality jobs than non-graduates (in terms of enjoying them more as well as financial benefits).
• Graduates enjoy better health outcomes, by being less likely to smoke, more likely to exercise, and less prone to depression.
• Graduates’ children also benefit from the educational success of their parents: graduates tend to have a greater involvement with their child’s education.
• Graduates are more influential in the community, by being active citizens who are more likely to vote and participate in voluntary activities.
• Graduates show positive attitudes towards diversity and equal opportunities, such as on race and gender equality issues.
• Graduates, with their higher levels of skill, are a source of wider innovation and economic growth.

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Examining careers

The Seven Years On project looked at how graduates from 1995 progressed in the workplace [1]. But at this stage, little work has been done on the aspirations and interests of young people going to university - exactly what they are hoping to get out of university, what do they expect, why do they choose to study the careers they do - and so it's difficult to track how they might have changed.

HECSU are hoping to address that through the Futuretrack study, which is going to follow over 125,000 young people who applied to go to university this year for the next six years to see how they fare, to find out how their view of the world, of education and of work, changes and to find out why young people choose to go to university.

This survey will not only be the first of its kind worldwide, but it is also timed to cover the first students to be affected by the introduction of tuition fees, and will be in place to see how the education sector, and the aspirations of the students in it, are affected by a change not just of Prime Minister, but also, perhaps, of government.

References

1. Seven Years On: Graduate Careers in a Changing Labour Market, Peter Elias and Kate Purcell, June 2004. The study is funded by the Economic and Social Research Council (ESRC) and the Higher Education Careers Services Unit.

2. 'A study on rates of return to investment in level 3 and higher qualifications', December 2005, Department of Trade and Industry.

3. Data extracted from Nomis.

4. Working Futures 2004-2014, R. Wilson, K. Homenidou and A. Dickerson, Warwick Institute of Employment Research, January 2006.

5. Beyond the financial benefits of a degree, Mark Wilberforce, Graduate Market Trends, Autumn 2005.

Copyright © 2002-2012 HECSU | Content last updated: Winter 2006/07