The Labour Market of the UK - Term Paper Example

OVER EDUCATION IN THE GRADUATE LABOUR MARKET Executive Summary: The problem of over-education in the education and job sector of UK is not new and has existed for long. In the current scenario, the number of graduates in the UK is increasing and so is the number of over-educated graduate workforce. The problem of over-education is not only because of the changes in the educational process, but also because of the economic conditions of the UK, since the global recession of the 2007-08. The influence of the corporate structures and the changes in the nature of their operation has also resulted in growth of over-educated workers. Observing the actions taken by the regulatory bodies and the Government of UK, it can be observed that, over-education is a long term phenomenon and is hampering the work enthusiasm of the graduates. Table of Contents Table of Contents 3 Introduction: 4 Reasons behind Over-education: 4 Impact of over-education on the job satisfaction of working graduates: 5 Over-education: short-term or long-term: 6 Implications of over-education for universities and government policy makers: 7 Conclusions and recommendations: 8 Reference List: 9 Introduction: The situation of the labour market of UK is still suffering from the after effects of the global financial meltdown. Although, the corporate sector is growing all over the world, the job market has changed in terms of demand and recruitments processes. Moreover, the educational systems are also changing and focusing on designing courses that are suited more professionally, rather than the traditional learning style (Walker and Zhu, 2005). One of the major issues in the contemporary job market scenario is over-education of the candidates and the jobs being offered. This is reducing the potential limits of the students and is also hampering their future prospects. This study is based on evaluating the influence of the graduate workers in the UK. Reasons behind Over-education: Majority of the scholars such as Walker and Zhu (2005) and Buchel, de Grip and Mertens (2003) have pointed out that, the primary factor behind the increase of over-education is the limited numbers of suitable candidates available in the job market. However, Dolton and Vignoles (2000) observed that the changes in the operational style of the corporate segment have also caused a rise in the number of over-educated employees. Most of the large scale business houses have segregated their work process into small and specific parts. This has limited the amount of skill required for employment and also reduced the scope of growth. Hence, the educational qualifications of the employees are often, more than their existing job profile. On the other hand, the limited number of jobs in the industry is also forcing the graduate candidates to work at lower level employment criteria adding to the factor of over-education among the graduates. Budria and Moro-Egido (2009) opined that, the overall increase in the cost of living has resulted in an increase in the numbers of graduates or students taking up part time jobs to meet their expenses. Considering the economic influence Dolton and Silles (2001) stated that, in the UK, retail and banking sector are among the highest recruiters which leave little option for the graduate students to follow their desired job profile. Focusing on the changes in the educational processes, most of the academic institutions are trying to design courses that are professionally appropriate for the students (Higher Education Commission, 2014). This has reduced the prospects of students doing traditional courses such as graduation, and the availability of the right nature of job for the graduates has reduced. Buchel, de Grip and Mertens (2003) observed that graduate students are having higher academic knowledge and skills in comparison to students with professional diplomas, but lack of practical education is hampering their job prospects and hence is increasing the number of over-educated graduates in the UK job market. While Dolton and Silles (2001) explained that, number of students in the UK is growing that is narrowing the job availability in the market leading to over-educated workers. Impact of over-education on the job satisfaction of working graduates: According to a survey conducted by TimesHighered (1997), 40% of the global workforce is over-educated. This population count included both male and female workers; however Buchel, de Grip and Mertens (2003) stated that, the numbers of male graduates who are over-educated are more in comparison to the number of female over-educated workers. Most of the workers working in a position lower than their education qualifications will take longer to adapt to their working conditions, and develop a collaborative relationship with their co-workers. This also hampers the job satisfaction among the employees. However, as per Coughlan (2013), graduates working in undesirable positions do not tend to stick to the jobs for a longer period as they are in continuous hunt for the appropriate opportunities for using their skills and knowledge. It can be observed that in UK, the number of graduates working in lower profile segments is increasing which argues the reverse relationship over-education and job satisfaction. Budria and Moro-Egido (2009) noted that, job satisfaction is hard to neglect considering the growing demands of the corporate firms and thus point out over-education as a reason not justified. According to Coughlan (2013), since the recession of 2007-08, the number of graduates working in lower level jobs has increased by 47%. On the contrary, The Office for National Statistics (2013) reflected that, graduates were most likely to be recruited in the current job scenario and only 4% of the graduates in the UK are unemployed. Focusing on the critical economic conditions and the tight scenario of the job market, the influence of over-education on job satisfaction can be considered as limited, but the trend of graduates leaving their jobs frequently also presents a dual picture possibility of job dissatisfaction among the over-educated graduate workers in the UK. Over-education: short-term or long-term: Over-education as a phenomenon has been termed as both short-term and long-term by scholars such as Dolton and Silles (2001) and Walker and Zhu (2005). According to McGuinness and Wooden (2009), as business sector changes its recruitment policies, the factor of over-education comes into play. For instance, in countries such as Brazil and India the growth of BPO (Business Process Outsourcing) sector created huge amount of employment opportunities but the basic educational requirements for jobs went down. On the other hand, countries such as the UK and the US who have outsourced their operations faced critical job shortness in the market as only the specialist functions remained within their control. The result was rise in demand for higher educated employees while graduates were left with no job (Budria and Moro-Egido, 2009). However, now many outsourced processes are being escorted back in UK creating job opportunity. The above stated scenario renders the impact of over-education as a short-term phenomenon. On the other hand, the number of graduate population in the UK has increased to over 12 million and is consistently rising (The Office for National Statistics, 2013). This is a long term scenario where new job segments for the graduates have to be created in order to accommodate them. The assessment of the educational institutions revealed that, practical education is being encrypted in their course modules which will help the fresh graduates in their work places. However, it can be noticed that this strategy will further increase the over-education problem for the existing graduates in the UK. In this scenario, over-education can be considered as a long-term phenomenon. Also connecting with the analysis of Budria and Moro-Egido (2009), it can be seen that the influence of over-education is mostly based on the similarity of characteristics of the workforce. Moreover, the experience and skill based knowledge of the over-educated workers are also low as existing workers with lower qualifications are occupying the better job designations. Changing this process will require a complete new start for the work structure of UK and thus, the over-education can be considered as a long-term phenomenon in case of UK graduates. Implications of over-education for universities and government policy makers: As stated above, most of the educational institutions are trying to design professional courses and incorporate them in the educational process for enhancing the scope of jobs for the graduates. However, increase in the number of over-educated graduates is also posing a threat to the reputation of the educational institutions. On the other hand, the regulatory bodies of UK education system such as The Higher Education Funding Council for England (HEFCE) have also supported the activities of the educational institutions and asked for designing more market focused courses. HEFCE also stated that, short-term professional courses will help the over-educated graduates in chasing their desired job profile and also enhance their opportunities (Higher Education Commission, 2014). Dolton and Vignoles (2000) mentioned that, over-educated graduates have a certain level of experience and including professional knowledge will help them to fulfil the criteria of the corporate sector. Walker and Zhu (2005) noticed that the admission of students in the graduate courses has increased and stated that UK has to put a limit to the number of students being enrolled in the graduate courses. The growing number of students applying for graduation from the UK universities will contribute in increasing the over-education problem and hence, make it a substitution process in the country. Conclusions and recommendations: The essentiality of controlling the number of over-educated graduate workers can be identified from the concern of the educational institutions and the instable economic condition of UK. In order to improve the condition of the over-educated employees, UK should focus on implementing their existing plan of market focused courses or real education process. On the other hand, the Government of the nation should also take steps for increasing the job availability in the market. Increasing public sector jobs in educational segment or allowing private organisations to operate in the country with specific employment clauses will help in improving the scenario. However, focusing on the gravity of the situation, UK should develop some restrictions to reduce the number of students enrolling for graduate courses in the educational institutions which will be a temporary solution. But, this will also provide time for the institutions and government of UK to take necessary steps for a permanent solution to the problem of over-education in context of the graduate workforce. Reference List: Buchel, F., de Grip, A., and Mertens, A., 2003. Over-education in Europe: Current Issues in Theory and Policy. Cheltenham: Edward Elgar Publishing. Budria, S. and Moro-Egido, A., 2009. The over-education phenomenon in Europe. Revista International De Sociologia, 67.2, 329-345. Coughlan, S., 2013. London Workforce now 60% graduates. [online] Available at < http://www.bbc.com/news/education-25002401> [Accessed 28th October 2014]. Dolton, P and Silles, M., 2001. Over-Education in the Graduate Labour Market: Some Evidence from Alumni Data. Centre for the Economics of Education. June, pp.17-27 Dolton, P. and Vignoles, A., 2000.The incidence and effects of over-education in the UK graduate labour market, Economics of Education Review 19: 179-98. Higher Education Commission. 2014. Regulating Higher Education: Protecting Students, Encouraging Innovation, Enhancing Excellence. A report by the Higher Education Commission. [online] Available at [Accessed 27th October 2014]. McGuinness, S. and Wooden, M., 2009. Overskilling, job insecurity and career mobility. Industrial Relations, 48, pp.265–86. The Office for National Statistics. 2013. Full Report - Graduates in the UK Labour Market 2013. Office for national Statistics. November, pp.3-27. TimesHighered. 1997. Is there really a problem of ‘over-education’? Available at < http://www.timeshighereducation.co.uk/news/is-there-really-a-problem-of-graduate-over-education/100716.article> [Accessed 28th October 2014]. Walker, I and Zhu, Y., 2005. The College Wage Premium, Overeducation, and the Expansion of Higher Education in the UK. Institute for the Study of Labor, 1627, pp.4-22. Read More