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Graduate unemployment rate lowest in 39 years

The graduate unemployment rate is at its lowest level in 39 years, a new analysis has revealed.

A report by Prospects, the graduate careers advice charity, shows that the unemployment rate for graduates six months after leaving university fell to 5.1 per cent this year – the lowest since 1979 when it was 4.9 per cent.

Employment increased from 74.2 per cent to 76.6 per cent (184,295) as 4,540 more graduates found jobs compared to last year. The proportion of graduates in professional-level roles also rose, from 71.4 per cent to 73.9 per cent, an increase of 7,895.

The What do graduates do? 2018 report shows a robust graduate labour market and suggests that skills shortages across many industries may have helped job prospects.

There were increases in students entering professional jobs across all degree subjects. More graduates qualified in high demand subjects, such as IT, engineering, accountancy and marketing, and went on to secure vocationally linked roles.

Maths graduates are increasingly taking up opportunities in IT and engineering, rather than the more typical business services roles. There were also more physics graduates working in IT. Marketing has proved much more popular this year among geography and English graduates.

The skills shortage also appears to have pushed up salaries with the average starting salary for graduates increasing from £21,776 to £22,399 this year. All regions saw a rise, with the Midlands, East of England and Northern Ireland seeing the largest percentage increases.

Charlie Ball, head of higher education intelligence at Prospects, said: "Skills shortages have been a feature of the graduate labour market since the recovery from the last recession. There are signs that this may have helped to fuel a modest rise in salaries as well as job prospects."

While there were more graduates on permanent, full-time contracts after six months (61.8 per cent) and fixed-term contracts of at least 12 months held steady, there were increasing numbers on zero hours contracts – up to 4 per cent of those employed, from 3.6 per cent last year.

Retail employs the highest number of graduates in non-graduate roles. While 12.8 per cent of graduates went to work in retail, around two-thirds of them were in jobs below professional level.

"There are longstanding and persistent concerns about skills mismatch and underutilisation of many graduates who aren't getting the opportunity to use their talent effectively,” said Ball. “As employers have persistent difficulty recruiting the graduates they require, we need to do more to bring capable graduates who cannot find suitable work together with the employers that are looking for them.”

He also suggested that the growth in zero hours contracts should be monitored.

 

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