1. Dr Charlie Ball Head of HE Intelligence Graduate Prospects
The £9,000 Gamble:
Is it worth going to university?
Dr Charlie Ball
Head of HE Intelligence
Graduate Prospects
Overview of the current state of the graduate employment system.

2. Why should I go to university?
Because going to university allows you experiences it is almost impossible to get any other way.
Because, in our rapidly-changing economy, many good jobs and interesting careers are simply impossible to get into without a degree.
Because the chances are your degree will help you make a good career and earn much more than you could without one.
Because going to university allows you experiences it is almost impossible to get any other way, which is difficult to put a price on.
Because, in our rapidly-changing economy, many good jobs and interesting careers are simply impossible to get into without a degree. This is often overlooked by comment and policy, and it should be acknowledged that the job market has changed rapidly since the 1990s. The internet has transformed the way people work and businesses. Something similarly ground breaking may happen over the current generation of students’ lifetime. When the economy is hit by a recession it is often low-skilled people who lose out, as if they have a low level of qualifications they may find it more difficult to adapt, in particular if they work in a sector which is badly affected. Most changes benefit the most skilled and so people with degrees tend to cope.
Because the chances are your degree will help you make a good career and earn much more than you could without one. However, there is no guarantee.

3. Why should I avoid university?
Because it costs a lot of money
There’s no guarantee that, despite the money you spend, that you’ll get a job or a rewarding career at the end of it.
You don’t have to go now – university will still be an option when you’re older
Because it costs a lot of money – in the future it could cost more and is unlikely to cost less. The loan system is also like a progressive tax system as opposed to operating like a regular bank loan.
There’s no guarantee that, despite the money you spend, that you’ll get a job or a rewarding career at the end of it.
You don’t have to go now – university will still be an option when you’re older, mature entry has become more common and people do succeed with strong degree outcomes. There is a sweet spot in your late 20s which data shows is the optimum time to go to university.

4. You hear a lot of things about universities and graduates particularly in the media.
Not all of them are true.
Here is a selection of some of the more persistent myths.

5. Popular myths about university and having a degree
“Everyone has a degree nowadays”
35% of the adult population of the UK has a degree. Less than half of students currently aged will ever go to university, and it’s unlikely we’ll ever see a situation where half even of a given age group goes to university. The number of 18 year olds is actually falling, so if we don’t change the proportion going to university, we’ll have fewer new graduates every year until 2022.
43-48% of the 18 year old population go to university.
In Scotland this % is higher, and most 18 year olds do go to university.
With a declining number of 18 year olds in the UK there will be a declining number of graduates (which is coupled with a skill shortage, so it will be a good time to go to university)

6. Popular myths about university and having a degree
Graduates only work for big business
Last year, 40% of graduates went to work for companies with fewer than 250 employees, and a quarter were with companies with fewer than 50 employees.
Large businesses tend to pay better, give better training and have more promotion opportunities.
Small businesses tend to give you more chance to have a say in the way the business is run, to get more responsibility, to have a more varied job and to learn a wider range of skills.
Only 10-15% of graduates go on to a graduate scheme.
Large businesses tend to pay better, give better training and have more promotion opportunities. (In the short/medium term)
Small businesses tend to give you more chance to have a say in the way the business is run, to get more responsibility, to have a more varied job and to learn a wider range of skills. (Employees are often forced out of their comfort zone, allowing for good progression)
Young people have their views on this, but neither path is ‘best’.

7. Popular myths about having a degree
All the graduate jobs are in London
One in five graduates starts their career in London. Many of those jobs are confined to a relatively small area of London.
London is the top UK city for private job creation
Only Manchester compares to London for career progression
Companies with London HQs are the biggest private employers in every other city
20% of the country’s businesses are in London
48% of the population in London are graduates – compared to 35% nationally
Average weekly earnings in London are £676, compared to £501 nationally
London is the top UK city for private job creation - Of all the top 100 UK employers, only 1, the Cooperative, is not based in London.
The best graduate employer is Aldi in terms of salary. However, they lose 60% of trainees due to the nature of the scheme. All their senior managers are from the graduate trainee scheme and their profile has raised dramtically over the past 5 years. Therefore it is likely that other employers may follow this model and invest more in graduate market.
48% of the population in London are graduates – compared to 35% nationally – certain pockets do have an even higher proportion, for example, in Westminster ¾ have a degree or higher qualification.
50% of employees in central Manchester also have a degree. Cities are becoming highly skilled areas.
Average weekly earnings in London are £676, compared to £501 nationally – this doesn’t account for disposable income. For example, London v Liverpool, those in Liverpool will likely have more cash to spend as the cost of living is so different.

8. Let’s talk about London…..
If you want to be a
Investment banker
Economist
Broker
Media researcher
PR professional
Management consultant
Then the majority of new jobs are in London
Surveyor (currently a shortage)
Engineer (all kinds, especially mechanical)
Pharmacist (now private sector)
Doctor
Social worker
Nurse
Teacher or HE lecturer
Then more than 80% of the jobs are outside London
Unpaid work – 35% in London
Most graduates, even in the media/publishing, are getting paid after 6 months.

9. ….and always some new myths emerging
“A degree no longer guarantees you a job”
A degree never guaranteed anyone a job – there’s no point in UK history when it did. Students have always had to work to get jobs and haven’t been able to expect them just for having a degree.
“There aren’t any jobs for graduates”
193, 890 first degree graduates were known to working after 6 months last year. 128,710 were in jobs that required a degree.
“You’re better off with a 2:2 from a ‘top’ university than a 2:1 from a less prestigious institution”
Unemployment rate for 2:2 from ‘top’ university : 10.8%.
2:1 from new institution (created since 1992) : 7.2%.
You’re better off with a 2:2 from a ‘top’ university than a 2:1 from a less prestigious institution” – ‘top’ university here is defined as the Russell Group and a couple of specialist institutions. It is better for a student to have a 2:1 from a university they thrive at rather than having a 2:2 from a ‘top’ university.
Students should also be wary when using league tables, as there is no standard curriculum it is difficult to compare universities. Quality Assessment ensure standards are maintained. The demographic also plays a part as most students go to university and work within a mile radius of home, so in terms of employability we are often comparing job markets across areas as opposed to universities.
There is a live debate concerning if employers are recruiting from the right pool of candidates and if they should be so crude as to use filters on classification and possibly type of institution, as they acknowledge that this is only to screen applications and make managing them easier.
Teacher comment: Employers are recognising that value added activities are important and the drive from new universities to focus on employability is welcomed as students are well-rounded and ready for the world of work. 9

10. But what is the hard data on the graduate jobs market?10

11. What Do Graduates Do? 324,015 first degrees were awarded to
UK-domiciled graduates last academic year.
Most graduates (73.6%) were working six months after leaving university – 188,590 graduates
Unemployment was 7.3%, the lowest since the recession.
12.4% went into further study.
Most subjects appear to be having a better time of it than last year.
Subjects seeing particular improvement – architecture and building, creative arts, engineering
12.4% went into further study. – This is decreasing as the economy and job prospects improve
Subjects seeing particular improvement – architecture and building, creative arts, engineering – as the construction sector was hit so badly by the recession, with unemployment soaring from 3.8 – 11%. This had never been seen before and does highlight how it can be difficult to foresee change.
creative arts – self employment has become popular in this area and so universities are introducing entrepreneurship to keep this area going.

12. What Do Graduates Do?
Working and studying is usually graduates who are working towards professional exams, e.g. law, accountancy, marketing.
Data from HESA Destinations of Leavers from Higher Education Survey 2012/13

13. What jobs do graduates do?
The figures in the following graphs account for first degree graduates only. This is why some areas may be missing as they require an MA/ PGCE etc. 13

14. What Do Graduates Do?
Those subject areas to the right of Childcare, health and education occupations on the graph don’t require a degree, but within this sector it is becoming increasingly more common that employers request applicant to have a degree for jobs such as Nursery nurses etc.
For all others a degree s necessary. It is worth noting that it is very difficult to enter Science professions without a PG qualification.
Data from HESA Destinations of Leavers from Higher Education Survey 2012/13

15. Most common jobs for graduates
Marketing has grown with the growth of the internet as this has broadened the category. We are currently short of people with quantitative skills.
Sales and retail assistants accounts for anyone in a shop role.
Data from HESA Destinations of Leavers from Higher Education Survey 2012/13

16. Which industries do they work in?16

17. Industry of employment for graduates
There is growth in Manufacturing and space for science/engineering graduates, especially as Pharmaceutical companies are struggling to recruit so it is a good time to enter into these fields.
Data from HESA Destinations of Leavers from Higher Education Survey 2012/13

18. Top employment sectors for graduates
It is likely that roles in government will fall back.
Data from HESA Destinations of Leavers from Higher Education Survey 2012/13

19. And where are the jobs? 19

20. Where do graduates work?
Many graduates staying in the UK as the job market was not much better elsewhere.
Data from HESA Destinations of Leavers from Higher Education Survey 2012/13

21. Where do graduates work (outside London)?
In Birmingham, Manchester and Leeds, graduates can get all range of jobs similar to those available in London. All other areas have one or two sectors missing. For example, in Lancashire there is a large quantity of engineering roles but it is very difficult to get into finance.
This data is local authority data with metropolitan areas split into constituency parts.
Data from HESA Destinations of Leavers from Higher Education Survey 2012/13

22. The regions
One of the effects of recession seems to be to have reduced the proportion of graduates staying on in the city they studied
The graduate jobs market in some cities will continue to thrive
Birmingham
Manchester
Leeds
Edinburgh
Glasgow
Cardiff
Belfast
The commuter towns and regions of the east and south east
London will continue to thrive and may continue to capture a larger share of the graduate jobs market.
This isn’t a uniform effect, and there’ll be places where it doesn’t hold true, but it’s a complication for regions hoping to hold onto graduate talent. The larger cities – Birmingham, Manchester, Leeds, Edinburgh, Glasgow, Cardiff, Belfast – will continue to do well, and other cities with reasonable graduate jobs markets – Bristol,  Newcastle, Sheffield, Nottingham, Leicester, Liverpool,  Oxford, Cambridge, Norwich, Northampton, Reading,
as well as the commuter towns and regions of the east and south east, will probably also see opportunities.
Some towns or regions with a strong engineering sector, like Derby, Lancashire and Warwickshire may find that a demand for engineers boosts the local economy.
Has anyone read Monday’s excellent Cities Outlook 2015 report from Centre for Cities? It highlights a lot of the social and economic disparities between cities and how recession has affected, and often exacerbated them. This may complicate local efforts to retain graduates and I know a number of LEPs and similar groups are looking at retention as part of their strategies.
Outside those areas, graduates looking for work may not find a great deal, particularly if public sector employment continues to fall, and particularly if they are restricted in the kinds of jobs they can look for. So although the graduate jobs market is likely to be a little better than in 2014, that doesn’t mean all parts of the country will share the wealth equally.

23. Graduates don’t just go straight into work.23

24. What Do Graduates Study?
Other study could include those studying for another degree.
Those studying for a Masters is declining as the job market picks back up.
Data from HESA Destinations of Leavers from Higher Education Survey 2012/13

25. Let’s talk about now 25

26. What is the current state of the graduate jobs market?
Recovering, slowly and patchily (some areas better than others, e.g. the South East)
Some sectors and regions recovering faster and more vigorously
Not, in general, back to where we were pre-recession
More certainty returning post-election
More certainty returning post-election – now that businesses know the agenda they can be more certain in what the future holds which is good for employment.

27. A Note On The General Election
What can we expect in The Future – in 9 months or so, in fact
Mass surveillance – Smith and Boyle at Bell Labs, partnering Stanford, the CCD – tremendous example of business/university collaborations
Flat-screen TVs – reliant on technology pioneered, at least in part, at the University of ….. HULL! The late George William Gray CBE, liquid crystal pioneer
Automatic clothes – a variant on smart fabrics and wearable computers, big drive in recent years by smart graduates to push this work forward. Let’s gloss over Google Glass coming off sale in the UK as it’s awkward
Flying cars – still under development, quite a few innovative US engineering consortia actively working on this.
The abolition of lawyers – problematic, this one. Would make quite a mess of the finances of a lot of leading universities.
Anyway, all this has a serious point.
No, it doesn’t really, it was an excuse for a series of jokes. But it does demonstrate how it’s possible to make some quite good predictions about the future even with minimal research. We can’t really predict the future, but we can speculate.
Shamefully, Back To The Future Part 2 makes no real effort to consider the graduate employment market, so it falls to me.

28. The election
Business had been uncertain about the result and braced for a minority Government
A majority Government seems to have reassured business– with likely effects on confidence and hiring
Public sector recruitment is likely to continue to weaken
EU referendum will be disruptive whilst it goes on – businesses will want to stay in the EU.
The Bank of England reduced the growth expectation by half last week and regarding wages, inflation is, at least at the moment, very low, and that might reduce pressure on wages - and business has become quite used to a long period of low wage rises, so there is likely to be choppy waters ahead.

29. An improving economy - Employer hiring intentions
Hiring intentions of employers last week – note that business and consumer services are on the rise again, but manufacturing is levelling off (0 is no increase in headcount)
From the Bank of England Agents’ Summary of Business Conditions March 2015

30. Skills shortages Increased demand for skills leads to shortage.
Clear signs of skills shortages in professional occupations
IT (across the board)
Engineering
Financial services (particularly those with a little experience)
Middle management
More expected to emerge as economy grows
There are clear signs of skills shortage in the graduate jobs market. It’s been noted not just by the AGR last week, but by the CBI, the UKCES, the Bank of England, the Institute of Chartered Accountants in England and Wales, Engineering UK, Thales, all sorts of groups and organisations.
It’s particularly pronounced in engineering and parts of financial services, and the ONS have noted that some professional level roles are seeing wage rises above inflation, although they’ve done their very best to bury the data completely by putting it on their website.
This suggests we might start to see increased starting salaries and pay rises for graduates – at least those in jobs that are in demand, and the new High Fliers survey provides evidence that the process is starting.
Yes, inflation is, at least at the moment, very low, and that might reduce pressure on wages - and business has become quite used to a long period of low wage rises. The travails of the oil industry But the skills shortage issue may win out and I suspect we’ll see modest growth in graduate wages - and even starting salaries – this year.
We’re looking at graduates skills shortages in conjunction with UKCES and are expecting to have something out by the end of next month. There are some interesting things emerging. It’s no surprise to hear we’re short of nurses, programmers and development engineers. But we also seem to be seeing emerging shortages of workers in HR, in business sales, in marketing and in nursery nursing.
We have no shortage of librarians, occupational therapists, tax specialists or HR MANAGERS. Have HR staff been stealthily promoting themselves? It would be good to know.

31. Wages
Wages have been kept largely steady for a number of years (likely to remain for another year)
Increased economic confidence boosts capacity to offer wage rises – but also expectation of rises.
ONS data suggests wage pressure for many professional qualifications is increasing.

32. Employee mobility and retention
Increased employee confidence leads to them being more likely to consider moving jobs.
Impact on employee retention.
Increased rates of employee turnover being reported.
Competition for talent likely to intensify.
People are on the move more.
Work experience is increasingly important as businesses prefer loyalty and want to see return on their investment in people.

33. Work experience Employers prefer graduates to have work experience
This doesn’t mean they have to have worked without pay
Most graduates do not have to take unpaid work to get a job
But working unpaid is more common in certain industries, eg media, environment, PR, fashion, and seems more common in London
Some employers are starting to consider recruiting only from graduates who have already done work experience with them.

34. The future?
Increased demand for highly skilled, flexible and adaptable workforce – less skilled and adaptable workers will be more seriously disadvantaged
New technologies will emerge, and numeracy is likely to be a key skill in the workplace
Work experience will be increasingly prized by employers 34

35. The future?
Many future graduates will come to work in jobs we don’t yet have names for, for companies that don’t yet exist, using technology that hasn’t yet been invented.
A degree will help them to adapt to new workplaces.
It will get harder to get well-paid jobs with good career prospects without first getting a degree.
Technology is likely to have a big impact. 35

36. Is it worth going to university
Graduates can probably look forward to a job and a decent career – better than they would if they didn’t go
There’s no guarantees, though
London has a very strong jobs market, but it’s quite concentrated and there are a lot of graduates out of work there
There are jobs in other parts of the country, but they tend to be in large cities and not all locations will have the full range of graduate options
There are jobs in other parts of the country, but they tend to be in large cities and not all locations will have the full range of graduate options -
Comment: with places which offer limited opportunities for graduates people don’t always come back to where they are from. For example, students from Warrington may find more away from home. Graduates tend to try to stay close to where they have studied in the first instance, the second most popular option is to move home to find work, or possibly return to a pre-university job, and then people move to larger cities, such as London, Manchester, Edinburgh, Belfast, depending on where they are based geographically. 36

37. Is it worth going to university
Some professions, especially in science, health, technology or business, may need postgraduate degrees, so don’t assume it’s three years at university and then out
Get work experience of some kind as soon as possible. Some are better than others, but anything is better than none.
Little evidence of that we have too many graduates, or that we’re going to get to a point where we have too many – but we might not have the perfect balance of subjects. 37

38. Any questions? Dr Charlie Ball Head of HE Intelligence
Graduate Prospects