'Crash' looms as graduate supply overtakes demand

The UK could be heading for a "car crash" because employer demand for graduates is not keeping pace with the rising numbers in higher education, a senior economist has warned.

Mike Campbell, director of research and policy at the UK Commission on Employment and Skills (UKCES), said that while demand for high-level skills was still greater than the existing supply, the gap was small when compared with other countries.

"There is some evidence that we are heading for a car crash if we are not more careful about the expansion of higher education in the future," he told Times Higher Education.

The commission's Ambition 2020 report on skills, published in May, states that the number of high-skill jobs in the UK is growing more slowly than in other member countries of the Organisation for Economic Co-operation and Development.

The commission, set up by the Government last year in response to the Leitch report on skills, found evidence that many employers are pursuing low-risk, low-return business strategies that do not require higher-level skills. A considerable proportion of the workforce has degree-level qualifications; however, many highly educated workers are in jobs that do not require graduate-level skills and knowledge.

Addressing the mismatch "isn't just about total numbers of graduates", Professor Campbell said.

"It's about being more careful about the connection between the skills graduates have and the opportunities that are available in the long term," he explained.

Immigration authorities hold lists of "shortage occupations" in which there is an insufficient pool of workers within the UK to meet demand.

The professor suggested that variable tuition fees could be used to encourage students to meet this demand and also study in areas of potentially rapid growth, such as the creative, digital and low-carbon sectors.

"The Government could subsidise universities or have a system where more bursaries are available in those subjects," he added.

But job prospects for degree-holders are linked to more than just the subject studied, Professor Campbell said. "It also has to do with the nature of the pedagogy and whether graduates have skills employers want, such as oral and written communication," he said.

The Government has already confirmed that its forthcoming higher education framework will examine the issue of "shaping learner demand" and how public-funding mechanisms can be used to support those subject areas most geared to future economic needs.

The UKCES report also finds evidence that many graduates lack the generic "employability" skills that business needs and that employers have to spend considerable sums on new recruits before they start to see returns on their investments.

"The ability to write a briefing - two sides of A4, say - summarising a longer report is a typical task a new graduate employee might be asked to do," Professor Campbell said.

"The ability to do that isn't universally available among graduates."

melanie.newman@tsleducation.com.