Over a third (36%) of UK graduates are overqualified for their roles, with a rising proportion ending up stuck in low-skilled jobs, according to new research from the CIPD, whose new report What is the scale and impact of graduate overqualification in the UK? looks at how graduate outcomes have changed over the past 30 years, and the job quality of overqualified graduates.

The research highlights that the proportion of graduates in low/medium-skilled jobs has doubled over the past three decades and finds overqualified graduates have lower levels of job and life satisfaction, are less enthusiastic about their work and are more likely to want to quit, compared to well-matched graduates.

In response, the report concludes there is a need for a major rethink on skills policy, including improvements to the quality of careers advice and guidance in schools. It also calls for reform of the Apprenticeship Levy, to incentivise employers to provide more apprenticeships to young people, and for a renewed focus on the development of an industrial strategy to create more high-skilled jobs.

According to a Gallup poll, only 13% of employees worldwide are engaged at work. In other words, about one in eight workers are psychologically committed to their jobs and likely to be making positive contributions to their organisations. If there is the opportunity to do so, employees should be allowed to develop their skills and abilities, and take on more responsibility if they want it. This could take the form of structured training or mentoring, or could be as simple and cost-effective as bringing staff members to cross-department meetings, or work events they wouldn’t normally attend. Employees often crave autonomy and independence in decision-making, so provide more authority for the employee to self-manage and make decisions.

The survey and analysis of official statistics found:

• A notable increase in the proportion of graduates working in administrative and clerical/service occupations since 1992, including a rise in graduates working as bank or post office clerks (3-30%) and as personal assistants and other secretaries (4-22%). It also shows an increase in graduates working as bar staff (3-19%) and security guards (2-24%) over the same period.
• Overqualified graduates have lower job and life satisfaction. Just over half (54%) of overqualified graduates report being either very satisfied or satisfied with their current jobs, compared to nearly three-quarters (72%) of well-matched graduates.
• In all, 56% of overqualified graduates say they are satisfied with their lives compared to 69% of well-matched graduates.
• A quarter (25%) of graduates who feel overqualified say that they are likely, or very likely, to quit their job voluntarily in the next 12 months, compared to 17% of well-matched graduates.
• Almost half (45%) of overqualified graduates feel they don’t get paid appropriately, compared to 28% of well-matched graduates. 30% of overqualified graduates earn less than £20,000 per annum, versus 8% of well-matched graduates.

Overqualification rates remain relatively stable across most age bands, suggesting that a poor initial match when entering the labour market can have long-term impacts on an individual’s career and income. The CIPD’s report suggests that taking employment in non-graduate roles is not a temporary or short-term phase for many graduates.

Lizzie Crowley, senior policy adviser at the CIPD, said:

“While graduate-level qualifications are undoubtedly essential in many roles and industries, the significant growth of graduates in non-graduate jobs is damaging for individuals, employers and the economy. A growing number of graduates are stuck in low-skilled jobs, while employers find it harder to motivate and retain overqualified graduates, undermining workplace productivity. Successive Governments’ focus on boosting the supply of higher-level qualifications to the labour market has failed to create nearly enough of the high-skill, high-wage jobs that the country needs. There needs to be a fundamental rethink on UK skills policy as part of a new focus on industrial strategy, to create more high-skilled and quality jobs across the economy.

“In particular we need better careers advice and guidance in schools so young people can make more informed choices about what to study, whether they should go to university or seek an apprenticeship or a vocational qualification. There is also an urgent need to reform the Apprenticeship Levy, to incentivise employers to provide more apprenticeships for young people so they have a genuine alternative to university.”