Far from walking into a graduate job, 44.1% of university leavers from the class of 2012/13 are predicted to be unemployed or underemployed six-months after leaving full time education, according to the most recent report commissioned by AAT (Association of Accounting Technicians).
The report compiled by the Centre for Economics and Business Research (CEBR) examines university and vocational education and the routes they offer into the labour market.
The report forecasts that 36.4% of those graduating in 2012/13 who are economically active will be working in roles for which a degree is not necessary six months after leaving university.
However, they will arguably be the lucky ones with 12.1% of the class of 2012/13 predicted to still be unemployed six months following graduation. This is compared to the UK national average of 7.8%.
Those studying STEM subjects of science, technology, engineering and mathematics stand to fare better than those studying arts subjects – both in terms of employability and earning potential. Roughly half of all arts students are either out of work or in a role for which they are overqualified for six months after leaving full education – compared to just 35% of STEM graduates.
Commenting on the findings, Jane Scott Paul, Chief Executive of AAT said: “For many years, people have been encouraged to go to university thinking it’s the best way into a well-paid job. But given that graduates are struggling to find any sort of employment, this is clearly no longer the case.”
Conversely, the report reveals those with vocational qualifications managed to escape the worst effects of the financial crisis. While the unemployment rate for those with qualifications at Level 1 or below soared to 14.5% by 2011, up from 8.5% in 2006; those with a vocational qualification at Level 3 or Level 4 have much lower unemployment rates of 6.9% and 4.5% respectively.
The report also found vocational qualifications have a positive impact on earning potential – in some cases comparable to that of a university graduate. For those completing a Level 4 Higher Apprenticeship, earning potential is likely to be significant, reaching above £150,000 on average.
This compares similarly to an estimated lifetime earnings advantage that a representative graduate would enjoy compared to a non-graduate. However, in the case of an apprentice, it is likely to come at little financial cost to the individual.
Skills Minister Matthew Hancock said: “We are making sure apprenticeships are an effective path into highly paid jobs and higher level learning. This report rightly shows that the rewards - both in earnings and career progression - can exceed those of graduates.
"We are rapidly expanding the number of higher apprenticeships. Last year two thirds more young people went into careers in legal and accountancy fields, which were previously limited to those taking the academic route. But we must do more, and later this year we plan to amend regulations to allow apprentices to study up to post-graduate level for the first time."
Jane Scott Paul continued: “Given the results, we do need to question whether we are giving young people the right information. Whilst a degree can offer fantastic benefits to an individual – university should not be seen as one size fits all. There are often cheaper and faster vocational alternatives available providing equally valid routes into work. Young people must be given all the options.”