Almost a million graduate-level jobs remained unfilled at the end of 2020, according to a report by education body Universities UK.
UUK found that there were 15 million people with degrees or equivalent qualifications working in the UK at the end of 2020, and around 16 million positions in graduate roles in managerial and professional occupations.
Its report, Busting graduate job myths, analysed publicly available figures to gauge the state of the UK’s graduate job market. It challenges some of the assumptions around graduate recruitment such as the belief degrees are of little value to employers and that there aren’t enough graduate jobs to go around.
It points to figures from the Institute of Student Employers (ISE), which show the number of graduate vacancies to be 20% higher than in 2019, before the Covid-19 pandemic, with job vacancies for graduates expected to increase by 22% in 2022 compared to 2021.
Furthermore, the number of UK workers in professional-level employment rose by 647,200 and those in other roles fell by 817,000 during the pandemic, according to the Office for National Statistics. Graduates were also less likely to be furloughed or in non-graduate jobs because of the impact of Covid-19.
UUK also looked at analysis from the Organisation for Economic Cooperation and Development (OECD), which estimates that around 14% of the UK workforce is overqualified for their current role, but almost twice that number (27.7%) are underqualified.
Artificial intelligence will increase demand for graduate roles by around 10%, particularly in healthcare, IT and marketing, according to figures UUK quotes from consulting firm PwC.
Professor Steve West, president of UUK and vice chancellor of UWE Bristol, said: “Students quite rightly want to know that going to university is worthwhile and a good investment for the future.
“Despite some questioning the value of graduate skills, this report shows that employer demand for UK graduates is significant – it has increased year-on-year and is likely to grow in the future.”
He added that a highly skilled workforce would be essential in supporting the government’s levelling-up strategy, but urged the government to “develop the right conditions for universities to fully support business growth and skills development for learners of all ages”.
“To be clear, this means that the UK government must invest in a sustainable long-term funding solution for higher education,” he said.
Alex Hall- Chen, senior policy advisor at the Institute of Directors, said higher education institutions would be an “essential component” in meeting the rapidly changing skills needs of employers in the UK.
“With employers consistently citing labour and skills shortages as a top factor having a negative impact on their business, investment in skills will be a crucial element of the UK’s continued recovery from the Covid-19 pandemic,” she said.
Stephen Isherwood, chief executive of the ISE, added: “In both the short and long-term the demand for skilled graduates is only going to increase.
“To ensure that employers can access the talent they require right across the UK economy, it is imperative that we continue to invest in graduate talent.”
UUK’s report also challenged an ongoing myth that most graduate jobs are based in London, citing figures showing that 22% of 2019 graduates were working in London six months after graduation, while 20% of people with a degree or equivalent qualification were living in London at the end of 2020.