If UCAS’ projections are realised with the number of higher education applicants increasing from over 700,000 in 2021 to around a million by 2030, one of the obvious consequences is that we will see significantly more graduates entering the workforce than today. This raises a number of important questions about the graduate labour market, such as whether the level of employer demand will be there to sustain this level of increased supply; which occupations will be most in-demand; and what graduate-level skills employers will be looking for.
In one sense, these are impossible questions, since there is no crystal ball which will give us the answers. However, by looking at past and current trends for graduate jobs, we can glean a number of clues about where things are headed, thereby giving ourselves some sort of guide to what the future might hold. The purpose of this essay is to do just that, taking a data-driven approach to these questions, and so shedding some light on what the future is likely to bring.
We can begin by looking at how the overall number of graduate-level occupations has changed over the last decade, particularly compared to non-graduate jobs. Our definition of graduate occupations is those within Standard Occupation Classifications (SOC) 2 and 3, which are Professional Occupations and Associate Professional and Technical Occupations, but we have not included 1-digit SOC level jobs — Managers, Directors and Senior Officials — since these tend to be jobs which people work their way up to, rather than ones which recent graduates can enter.
The chart below shows that the total number of jobs in the UK grew from 28.6 million in 2012 to 31.6 million in 2022, an increase of 10.2%. Although in absolute terms the greatest rise was in non-graduate jobs, proportionately graduate jobs grew at a faster rate (11.9% compared to 9.0%), such that the total share of graduate jobs in the labour market grew from 37.8% in 2012, to 38.4% in 2022. Based on this data for the past decade, we have also included a projection out to 2030, which shows that if trends continue, graduate jobs are set to continue to rise by around another 200,000, with growth again outstripping that for non-graduate jobs (1.72% compared to 1.69%).
Having seen that the total number of graduate-level jobs has increased over the past decade, this leads to a follow-on question: what sort of jobs are in high demand? Using Lightcast’s Job Posting Analytics data to identify employer demand for graduate occupations, we can answer this question both in terms of absolute numbers over the last 12 months and growth over the last five years.
As we might perhaps expect, the data shows that many of the current in-demand graduate occupations are IT roles, such as Software Developer/Engineer (almost 495,000 online job postings over the last year), Data/Data Mining Analyst (149,000), and Computer Support Specialist (127,000). However, demand for more ‘traditional occupations’, such as Lawyer (166,000) and Accountant (164,000), is also significant.
In terms of growth in online postings for graduate occupations over the past five years, the picture is especially interesting. Although the highest growth has been for Sales Representative (1,050% growth) and Data Engineer (450%), with the exception of Video Game Designer (230%) the rest of the top ten is dominated not by IT jobs, but by social positions such as Prison Officer (340%), Community Health Worker (280%), Probation Officer (280%), Youth and Community Workers (200%), and Academic/Guidance Counsellor (190%).
Whereas the traditional focus of labour market demand for graduates has been on the qualifications they have, in recent years the language of employers has increasingly shifted to focus much more on skills. Universities have rightly invested in supporting 21st century skills development, and demand for these skills is almost ubiquitous across the labour market, but the differentiators that enable graduates to access different areas of the labour market are often specialised skills.
We can also look at how specialised skills demand has changed over the past five years, in order to give us a sense of which skills are growing and becoming more important in the graduate labour market. Here, we find the top skills dominated by IT and computing, with the likes of Kubernetes (820% increase in postings over five years), Power BI (465%), and Cyber Security (173%) all having seen strong growth. There are, however, a number of non-IT skills that have also seen strong growth in demand, such as Midwifery (228%), Psychology (98%), and Mental Health (98%).
Having brought some data to bear on these three questions, what are the lessons that can be learned?
Firstly, our trend-based projections indicate that demand for graduate-level jobs is likely to grow over the next few years, which is clearly a positive finding given the expected rise in applicants to universities and the subsequent increase in graduates looking to enter the workforce.
Secondly, although here we’ve only been able to show a snapshot of in-demand and high growth graduate occupations, clearly the more universities can understand about which occupations are being sought-after by employers, the more evidence they have to inform their provision.
The most crucial takeaway from all this, however, is the need to better understand which skills are in-demand, and which are growing. From the perspective of the individual student, it is about knowing which skills are likely to make them more employable. From the perspective of the university, it is about discerning which skills could be incorporated into their courses and wraparound support, ultimately to help their students to be better prepared for future employment.
There is a saying that to be forewarned is to be forearmed, and although we can’t know for certain the answers to questions such as whether there will be sufficient employer demand to sustain the million graduates in 2030, or what employer skills demand might look like then, what we can do is use a data-driven approach to better understand which skills employers are currently seeking, and which skills are growing in importance. This is our best guide to the future, and the best preparation for Tomorrow’s Skills in 2030 and beyond.
Executive Vice President of Global Business Unit, Lightcast
Andy Durman leads the expansion of Lightcast’s global business, with a current focus on the UK, Europe and APAC. With a wealth of experience as a market intelligence professional, and a particular expertise in labour market and demographic analysis within the higher and further education sectors, Andy is passionate about bringing innovative labour market analytics solutions to help education providers, economic planners and employers better understand the labour market they are focused on, so that they - and the communities they serve - can make much more informed decisions relating to the world of work.