Number of university students entering non-graduate jobs 'at saturation point'
More than half of graduates in the UK work in jobs that do not require a degree, a report has claimed, with calls for a national debate on creating more opportunities for highly skilled workers.
The number of over-qualified students graduating from university entering non-graduate jobs has reached "saturation point", the report from the Chartered Institute of Personnel and Development said.
This is leaving too many young people with an unnecessary burden of debt as they enter the workplace, warned the report, entitled Over-qualification and skills mismatch in the graduate labour market.
Just under 60% of graduates in the UK work in non-graduate jobs, it said, adding that countries with a history of strong vocational training such as Germany have only 10% or less of graduates in non-graduate positions.
The UK has a graduation rate of 54%, the second highest in the OECD area, the report said, adding that while a rise in graduates outstripping the number of high-skilled jobs available is a trend in most countries, it is "particularly pronounced in the UK".
The research supports the idea that an apprenticeship may be a better option for teenagers who have just completed GCSEs or A-levels, CIPD chief executive Peter Cheese said.
"Efforts need to be redoubled to ensure young people who are making choices after receiving their GCSE and A-level results can access good quality careers information, advice and guidance so they can make better informed decisions," he said.
"Our report highlights why young people should think carefully about opting for university when, for example, going into an apprenticeship at 16 or 18 could be a much better choice."
The CIPD said the Government should launch a review of higher education, ensure there is a focus on creating more high-skilled jobs, and continue to make more apprenticeships available.
It also called on employers not to use a degree as a screening process when recruiting for jobs that do not require a university education, and to work more closely with schools on traineeships and apprenticeships.
Parents should make sure they discuss the alternatives to university with their children, it added.
Mr Cheese said: "The assumption that we will transition to a more productive, higher value, higher skilled economy just by increasing the conveyor belt of graduates is proven to be flawed. Simply increasing the qualification level of individuals going into a job does not typically result in the skill required to do the job being enhanced - in many cases that skills premium, if it exists at all, is simply wasted.
"This situation is unsustainable given that the Government estimates that 45% of university graduates will not earn enough to repay their student loans. It's crucial we as a nation take stock now of whether our higher education system is delivering desired returns for graduates, for organisations, and society.
"Just as importantly, we need to start a national debate about how to generate more high-skilled jobs which means organisations investing more in developing their leadership and management capability, building more progression routes and improving work organisation and job design so that people's ideas and skills are used more effectively in the workplace.
"The Government needs to ensure its productivity plan includes a specific focus on creating more high-skilled jobs and work with employers, particularly SMEs (small and medium-sized enterprises), and with key stakeholders like local enterprise partnerships and business growth hubs to help build organisations' capability to achieve this."
A Department for Business, Innovation and Skills spokesman insisted the Government is doing enough for students.
"We are providing the right mix of university places and apprenticeships to ensure more people have the opportunity to advance their careers and businesses get the skills they need to grow," he said.
"Demand for higher education remains strong and graduates enjoy a pay premium that reflects their value to employers."
Sorana Vieru, NUS vice president, said the Government needs to do more to create jobs for graduates.
"With an economy in recovery the issue is too few jobs, not graduates," she added.
"The Government should be doing more to create effective graduate employment schemes that fully utilise this country's talent.
"Moreover, given the lack of higher level technical courses and youth jobs the question remains, where else can young people go to further their career prospects but higher education?"