Background to the Research

• Rapid expansion in the UK's graduate labour market over the last two decades has not been accompanied by an equivalent growth in post-graduate employment. Commentators estimate a level of graduate under-employment of between 11% and 40%. Policy makers have sought to address this problem through programmes designed chiefly to abolish skill shortages, but which have a secondary aim of ensuring high quality graduate level employment.
• NI programmes, such as the Rapid Advancement Programme in IT and a graduate into business initiative, tend to be competence based (combining classroom education with substantial periods of industrial placement) and delivered by private sector training providers. This paper evaluates the extent to which graduate under-employment was reduced as a result of participation in a graduate into business programme.
  

Research Approach

• Data were collected during July/August 2000 on the educational background and labour market experience of people who had contact with the graduate into business programme. The sample consisted of 199 applicants to the 1997 programme, of whom 149 received training between June 1997 and February 1998 and had subsequently been active in the labour market for at least two and a half years. Data were collected on a control group of 50 applicants to the programme in 1997, who despite meeting the criteria, did not gain a place due to excessive demand for the course.
  

Profile of the sample

• The age range of the sample was between 23 and 30 years, 60% of the sample were female. Only a quarter of females were aged over 26 years compared to 40% of males. Catholics accounted for 40% of the sample.
• Of the 149 programme respondents, 77% had attended universities in NI, 20% in Great Britain and the rest had attended higher education institutions in the Republic of Ireland.
• Nearly all the respondents had primary degrees and 15% also held post graduate qualifications. Almost two thirds of the total sample came from Business, Social Science or Arts backgrounds. Despite the programme being designed to equip students with Business and Management skills, over a quarter of the cohort were Business Studies graduates.

The Impact of Training on Labour Market Outcomes

• Of the 120 students who successfully completed the programme and were in full-time employment at the time of the survey, over 90% had found jobs within 6 months of leaving the programme. Around three-quarters of the sample have remained in the first position taken up after training and a quarter had moved on to a second job. Approximately 30% work within the Finance/IT industries, 20% in Manufacturing industries. The remaining 50% were evenly distributed throughout the economy.
• Seventy-six per cent of respondents who provided job titles were classified within the traditional professional SOC grouping 1 to 3. The other 24% were employed in SOC grouping 4 to 9 (these would normally be considered non-graduate positions). Almost 15% of the cohort were employed in Clerical/Secretarial posts and a further tenth in non-professional positions within the retail sector.
• Higher proportions of Social Science and Arts graduates thought themselves to be in non-graduate employment relative to the SOC results.
• Twenty-six per cent of those entering their first employment after training felt that they were overeducated for the position, this fell to 20% for current employment.
• In relation to first employment, 12% felt their current position could have been gained with GCSEs or no qualifications and 12% felt that A-Levels or vocational qualifications would have sufficed, these proportions fell slightly for current employment.
• The proportion of programme leavers entering the non-professional SOC groups is lower than that of their counterparts entering the labour market directly from university.
• The results demonstrate that participation in this kind of post-graduate training does not in itself ensure an improved labour market outcome. A positive impact only occurs when participants obtain jobs through placement or through the training provider's recruitment agency. This implies that only the 40% of the sample that found employment through the initiative gained a detectable advantage from the programme. The 60% who did not find a job through the programme (either placement or recruitment) recorded worse labour market outcomes than their counterparts who entered the labour market through a conventional postgraduate programme.
• The programmes success lies in its ability to place students in graduate level posts, therefore the main role of this type of initiative may be to act as a specialist graduate recruitment agency.
• The relative success of Arts and Social Science graduates in the programme, compared to those with a Business Studies backgrounds, would suggest some indirect benefit from the training element of the programme.
• The key competencies of participants seemed to improve markedly as a direct result of training, however, the impact of this improvement on the incidences of graduate under-utilisation were largely consequential and indirect. This is not surprising as there seems to be a surplus of graduates with Business and Management qualifications.

Conclusions

• There is some evidence to suggest that there are some advantages to be gained by students from diversifying their skill base on leaving university. However, rather than Business and Management Skills, it might be better to provide participants with additional skills on other disciplines where surplus is not such a problem.
• Government should realise that current educational policy is likely to lead to greater graduate under-employment and a more coherent policy response to the issue is needed.