Grab a graduate

London is full of European graduates doing admin jobs, so an HR director told me a few weeks ago. It’s a theme I’ve heard a lot over the past couple of years. Bright young Europeans are coming to the UK and doing jobs for which they are overqualified. This not surprising, given the economic problems in some EU countries but that’s not the whole story. Working in London is good for the CV and helps people get better jobs when they go back home. One Spanish graduate told me that working in the UK is almost a pre-requisite for getting a good job in Spain. If you haven’t worked abroad, she said, employers think less of you. A stint in London, then, is almost becoming an extension of a young person’s education.

So much for the anecdotes, though. Is there any evidence behind this?

I spotted this chart in last week’s OECD report on immigration.

Screen Shot 2015-07-06 at 11.23.03

Since the recession, the UK’s over-qualification rate among non-native highly educated workers has risen by one of the highest rates in the OECD. This suggests that a lot of well-educated people have found work in the UK but in relatively low skill jobs.

A recent report on skills by the Institute for Public Policy Research (IPPR) found that, during the last decade, the number of highly qualified workers in Europe rose faster than the number of highly skilled jobs.

Screen Shot 2015-07-06 at 17.26.47

It also found that, compared to the rest of Europe, the UK had a relatively high number of graduates overqualified for the work they were doing.

Screen Shot 2015-07-06 at 17.15.54

Last year, research by the CIPD found that over half the graduates from the old Eastern Bloc countries were employed in low-to-middle skill work.

Screen Shot 2015-07-07 at 10.05.07

It also pointed out that EU migrants are concentrated in the 25-34 age band. In other words, most come to the UK when they already have some work experience. Graduates from the EU arrive here work-ready with good qualifications and, usually, excellent English.

Most of the employers surveyed in the CIPD study said that they did not recruit migrant workers as a way of paying lower wages or avoiding training investment. Nevertheless, the report concludes that the increase in the number of graduates from the EU has made competition harder for Britain’s youngsters.

[T]he evidence in this report suggests that, particularly in low-skilled jobs, the availability of EU migrants, especially those from EU8 nations, has added to the competition facing young UK-born workers.

This report shows that EU8 migrants are disproportionately represented in low-skilled jobs and are likely to have more employment experience and to be better qualified than young UK-born workers going for the same type of employment.

The competition for jobs in the low-skilled segment of the labour market has been amplified by the squeeze in the number of mid-level-skilled jobs that exist in the UK.

At a Resolution Foundation event earlier this year, Andrea Salvatori presented some findings from his work on job polarisation. He looked at the change in the composition of occupational groups over the past 3 decades. There are more graduates doing middle skill jobs now than there were 30 years ago while “non-graduates have also seen a major shift in the distribution of their employment from middling to bottom occupations.”

polarisation-event-slide-pack-21-638

Not only are there fewer mid-level jobs but a lot of those that used to be done by non-graduates are now filled by people with degrees. Those without degrees are finding the competition tough. As Tony Dolphin pointed out last year, it is becoming very difficult for people without qualifications to maintain their position on the skill ladder.

Mid-skilled workers who lose their jobs initially try to find a comparable job that makes full use of their talents. Some succeed but, because of the shrinking number of mid-skilled jobs, many do not. They do not have the qualifications to move up the skills ladder, so eventually they are forced to move down it and compete for low-skilled jobs.

For young people with little work experience, it’s even harder. This comment in the CIPD report is telling:

Some employers expect oven-ready young people who leave school pre-equipped with the self-management and employability skills to immediately succeed in the workplace.

Or, as one HR manager told me recently, “You can get graduates with excellent English and 2 years work experience willing to do clerical jobs. And they’re good at them. What’s not to like?”

There’s a lot not to like, says the CIPD:

Put simply, we have too many low-road employers in the UK, competing on low cost and not enough who are building competitive advantage through enhanced leadership and management capability, effective work organisation, job design and smart learning and development interventions.

A couple of months ago, I wrote about some remarks Alison Wolf made about the impact of immigration on training, noting that the decline in training investment coincided with the rise in immigration. According to the most recent UKCES data, training spend per employee and per person trained is now lower in real terms than it was in 2005. Maybe she’s onto something. After all, why go to the bother of training people when you can just grab a work-ready graduate?

This entry was posted in Uncategorized. Bookmark the permalink.

6 Responses to Grab a graduate

  1. sdbast says:

    Reblogged this on sdbast.

  2. metatone says:

    I think it’s crucial to understand that it’s not just “more competition” for British youngsters, but effectively locking them out of the job market for the long term. If you can’t get an entry level job while you’re young enough, you’re pretty much sunk in terms of future employment.

  3. jayprich says:

    The free flow of labour has that consequence. Our economy is relatively attractive at the moment but in more normal times this would be cast as a stabilising movement to mitigate inflation despite our floating currency. By the same mechanism the debt overhang and consequent deflationary pressure on the continent is being exported. Imagine if we were also in the Euro .. at least the strong pound and high living costs take some of the same economic strain.

  4. Keith says:

    Do these “oven-ready young people” taste good when cooked? Now there is a new way to make the unemployment stats look better!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s