Growth of graduates in low-skilled work suggests a fundamental rethink of skills policy is needed

What we found

While degree-level qualifications are important for individuals, business and the economy, the research found that the growth in the number of graduates has outstripped the creation of highly skilled jobs. This means that more and more graduates have found themselves working in jobs that, in previous generations, would have been filled by non-graduates. The proportion of graduates in low/medium skill roles double over the course of the last three decades, increasing from 10% in 1992 to 20% by 2022. 

To shine a light on this issue in more detail we examined the proportion of graduates in a selected number of job roles and found that:  

• In 1992, just 7% of bookkeepers, payroll managers, wage clerks, and national government administrative occupations were graduates. Thirty years later, the figures stand at 44% and 42% respectively.  
• The graduate share for bank and post office clerks and personal assistants and other secretaries has also increased dramatically from 3% and 4% in 1992 to figures of 30% and 22%.  
• Large increases in the graduate share have also been seen for security guards (2% to 24%), bar staff (3% to 19%), waitresses (2% to 17%), and sales and retail assistants (2% to 14%). 

The research also uncovered the job quality experience of graduates who feel that they are overqualified for their jobs and revealed: 

• Just over half (54%) of overqualified graduates report being either very satisfied or satisfied with their current jobs, compared to nearly three-quarters (72%) of well-matched graduates.  
• In all, 56% of overqualified graduates say they are satisfied with their lives compared to 69% of well-matched graduates. 
• A quarter (25%) of graduates who feel overqualified say that they are likely, or very likely, to quit their job voluntarily in the next 12 months, compared to 17% of well-matched graduates. 
• Overqualified graduates have lower earnings, 30% of overqualified graduates earn less than £20,000 per annum, versus 8% of well-matched graduates. 

The research also suggests that being overqualified is not a temporary or short-term phase for many graduates, with rates of overqualification remaining relatively stable across most age bands and job tenure. This suggests that a poor initial match when entering the labour market can have long-term impacts on an individual’s career and income. 

What are the policy implications? 

Since the 1990s, skills policy in the UK has been focused almost exclusively on increasing the supply of skills. The assumption being that increases in the number of highly qualified worker would, in turn, generate the creation of more highly skilled jobs and increased in productivity. This has failed in an approach,  the UK now boasts one of the most highly qualified economies in the world but the productivity gap remains. Alongside, high fees and rising student debt, particularly in the English context there is clearly a need to rethink skills policy.

While it is encouraging that the Government has recognised the need for rebalancing the education system away from universities and towards vocational and technical education, further action is required across a number of fronts. This includes:

• the need for better careers advice and guidance
• a rethinking about employers’ incentives to invest in their people and diversity career pathways
• increasing access to apprenticeships for young people
• a renewed focus on industrial strategy and inclusive growth to support the creation of high-quality job opportunities.

What is the role for employers? 

And employers also have a critical role to play. They can act to reduce the level of overqualification by rethinking entry requirements to roles when recruiting, rather than screening by qualifications, making recruitment practices more transparent and inclusive. They can also act to improve the job quality experience of overqualified graduates. 

The job quality experiences of those graduates who feel overqualified for their roles are considerably poorer than for those graduates who feel their qualifications match their roles. This has an impact on job satisfaction, performance, and individual wellbeing, which, in turn, is linked to organisational productivity. Focusing on job design, skills development and career advancements can help mitigate some of these negative impacts.