More UK graduates ending up in low-skilled work, HR body warns

Chartered Institute of Personnel and Development calls for a rethink to skills policy, including apprenticeships, following new findings on graduate employment

November 4, 2022
Overqualified worker
Source: iStock

The UK’s professional body for human resources has warned that too many university graduates are overqualified for their current jobs.

The Chartered Institute of Personnel and Development (CIPD) found that the proportion of graduates in low-skilled industries has grown since it last explored the issue in 2015.

Reflecting on the findings, published in its report What Is the Scale and Impact of Graduate Overqualification in the UK?, the CIPD called for a rethink of skills policy.

It wants an urgent overhaul of how young people are given advice on careers and apprenticeships – the latter also long championed by Robert Halfon, the newly appointed education minister.

The report analysed ONS Labour Force Survey data from 1992 and 2022, as well as the CIPD’s latest Good Work Index survey data, to investigate how graduate outcomes have changed over the past 30 years. The survey, conducted earlier this year, draws on a “representative sample” of more than 6,000 UK workers.

The CIPD said the proportion of graduates in jobs considered low or medium-skilled has doubled over the three decades, with these overqualified graduates experiencing lower levels of job and life satisfaction, less enthusiasm about their work and more desire to quit than their peers whose jobs align with their qualifications. Only 54 per cent of overqualified graduates reported satisfaction with their current jobs, compared with 72 per cent of well-matched graduates.

Lizzie Crowley, senior policy adviser at the CIPD, said: “While graduate-level qualifications are undoubtedly essential in many roles and industries, the significant growth of graduates in non-graduate jobs is damaging for individuals, employers and the economy.

“A growing number of graduates are stuck in low-skilled jobs, while employers find it harder to motivate and retain overqualified graduates, undermining workplace productivity.”

The CIPD also blames successive governments for “failing to create nearly enough of the high-skill, high-wage jobs that the country needs”, having focused instead “on boosting the supply of higher-level qualifications to the labour market”.

To remedy this, it suggests a “fundamental rethink on UK skills policy as part of a new focus on industrial strategy”.

The CIPD repeated a call for reform of the apprenticeship levy, which it had first raised a year ago. This, it says, would “incentivise employers to provide more apprenticeships for young people so they have a genuine alternative to university”.

Its analysis found a marked increase in the proportion of graduates in administrative and clerical/service roles since 1992, with their percentage in national government administrative occupations rising from 7 per cent to 42 per cent.

Graduate employment as security guards, bar staff, care workers and retail assistants followed similar patterns.

The future looks bleak for those who feel overqualified in the workplace, with 25 per cent feeling likely, or very likely, to quit within the next year. This figure stood at just 17 per cent for well-matched graduates.

On pay, the CIPD report found that 45 per cent of overqualified graduates feel theirs to be inappropriate, compared with 28 per cent of those considered well-matched.

In addition, overqualification rates remain relatively stable across most age bands, implying that a poor initial match when entering the labour market has long-term impacts on individuals’ career and income.

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