19th August 2015

Has the CIPD picked up the wrong target to shoot at?

The CIPD report out today raises some interesting questions about the role of graduates in the economy, but it settles on the wrong enemy.

The report, and the consequent headlines zoom in on oversupply of graduates, but the real issue is about stimulating jobs with higher level skills, and utilising the talent at our disposal.

The CIPD do get to that, and some of the comments from their CEO are helpful, for example where he challenges the government to do more on stimulating higher level skills roles in SMEs.

Whilst there are clearly some poor degrees, and poor universities out there, there is still a very strong case for encouraging more people to go to university. Some of the reasons are economic, as highlighted in the report, but many are social.

  • Where there is a higher proportion of graduates in an economy (be it local or national), productivity goes up
  • Where there are higher proportions of graduates in a business, there is greater innovation
  • Graduates earn more, and therefore pay more tax
  • Graduates are more socially active (voting, volunteering) according to data across the OECD
  • Graduates are less likely to be unemployed

All of these factors seem to us to demonstrate a clear value, even if we are not fully using the value, of graduates in our economy. As for the assertions about 58% not being in graduate level jobs, there is continuing huge debate about what is or is not a graduate level job. The report uses a questionable methodology to calculate the proportion of graduates in graduate level jobs. It is largely based on self reporting, which is often unreliable and takes no account of UK University Destinations data. Given the University of Warwick have had a department working on the question of ‘what is a graduate job?’ and have still not cracked it, this is always a contentious area.

There is also a slightly awkward appeal to parents to consider more strongly directing their children to university alternatives. This seems a perverse move, as many of the parents they refer to will now be graduates. Why would you want the next generation (already worse off than the last) to also be denied both the value and, let’s face it, fun of a university education if they have the grades to go? Many of the HR managers working under the membership banner of the CIPD would not dream of doing such a thing.

It seems to me that what is really at the heart of the report is a desire to boost UK productivity, something we all know is failing. The government have a policy that states their investment in graduates is in the cost of fees, and once they have graduated they are on their own. Fair enough, you might say, but for modest investment (in more schemes like RISE Sheffield for example), could see SMEs better connected with graduates, and greater value generated from all of our graduate talent.

In summary, the answer is not reducing graduate numbers, but fostering an economy that values these skills and realises how they can help businesses and places to grow.

Sources: OECD, BIS, PEW Research Centre