One in eight graduates unemployed because of the pandemic, official figures show

Experts warn university leavers taking non-graduate roles could lock people with lower-level qualifications out of the UK labour market

Nearly one in eight graduates was unemployed in the third quarter of 2020 – almost double the average rate for this group over the past three years – according to figures from the Office for National Statistics (ONS). 

The ONS data found that while the unemployment rate for all graduates tended to be below the national population, averaging 3 per cent between 2017 and 2020, the rate for recent graduates was more than double, averaging 6.3 per cent over the same period, and peaked at 12 per cent by the third quarter of 2020.

This suggested that recent graduates were one of the groups hardest hit by the pandemic, the ONS said.

Lorna Carter-Blake, managing director of DA Training and Consultancy, said the data showed the “devastating toll of the pandemic on recent graduates trying to enter the workforce”, adding that recruitment opportunities, regardless of qualifications, were few and far between.

“However good the degree you have, conditions in the labour market at present are brutal, and recent graduates, it’s increasingly clear, have a mountain to climb,” she said.

However, it was not all bad news for university leavers. The ONS figures showed the proportion of graduates in positions they were overqualified for had fallen 5 percentage points to 25.5 per cent between 2019 and the third quarter of 2020 – which the ONS noted was unusual as skills mismatches usually increase during recessionary periods.

While this was positive for graduates, Lizzie Crowley, skills policy adviser at the CIPD, said the news that one in four graduates were in non-graduate roles risked “locking people who have lower-level qualifications out of the labour market”.

“Employers should be looking beyond qualifications when they are seeking to recruit individuals into their organisations; looking at a broader understanding of skills and experience and not overinflating qualification requirements for the role,” she said.

Crowley added that while it was potentially not ideal for graduates to be forced to accept jobs they were overqualified for, they were still relatively better protected in the labour market than lesser-qualified workers. “Even if graduates aren’t necessarily getting their career destination of choice, the prospective benefits of being in any kind of employment versus unemployment are huge,” she said.

The ONS said the reduction of skills mismatches could be because of significant reallocation of workers during the pandemic, as graduates have moved out of professions badly hit by the crisis, such as tourism and hospitality, which have a higher proportion of overqualified graduates.

Graduates experienced the highest level of occupational change during the initial phase of the crisis (between the first two quarters of 2020), when 8 per cent of graduates changed occupations, compared with 6.8 per cent in 2017.

The ONS figures found employment rates for recent graduates were still comparatively higher than young people with lower-level qualifications, with the unemployment rate for 16 to 24-year-olds standing at 14.2 per cent and 13.6 per cent in the second and third quarters of 2020 respectively.

It also found that current graduates have benefited from remote working, as more than 70 per cent are employed in occupations that have been able to expand and recruit more graduates, such as associate professional and technical occupations. Additionally, nearly 70 per cent of professional occupations reported working from home, which meant high-skilled workers were able to continue working throughout the crisis, compared to only 5.4 per cent of machine operative professionals able to work from home.