Underemployed and overqualified

Student oversupplies and a tighter job market have affected employment prospects for emerging graduates, writes Toli Papadopoulos.

University, a place to further ones knowledge, but does it open doors to employment?

Dr Veronica Sheen is a research associate on employment at the Monash University School of Social Sciences. She says that finding work after graduating is increasingly becoming difficult.

“When all of us grew up we thought that getting a good education would result in being employed within a corporation or organisation. The fact is I don’t know that’s how it is anymore,” she says.

Twenty-six-year-old Bradley Woolstencroft graduated from his Bachelor of Management and Law with honours two years ago. He is now a qualified legal practitioner. Yet in spite of this, Mr Woolstencroft has been unable to find a job.

“I’ve had interviews with some pretty big law firms as well as companies such as Woolworths and Fujitsu, but haven’t been successful in finding work,” he says.

Matthew Long, 26, also had difficulty obtaining work after completing his degree in chemical engineering in 2010. He currently considers himself underemployed.

“I think my degree outweighs the role I’m in currently. I spent over a year looking for work and after being rejected from the big companies like Rio Tinto, the job hunt became a bit disheartening,” he says.

Recent reports by the Foundation for Young Australians found that 26 per cent of Australian higher education graduates are underutilised immediately after course completion and 15 per cent three years later.

And it seems these figures are on the rise. In 2013, the amount of graduates in immediate full time employment decreased by 4.8 per cent when compared to the previous year.

But is the job market to blame or are graduates unprepared to enter the workforce?

Statistics compiled by Graduate Careers Australia indicate companies are increasingly taking on board less graduates. Out of 484 employers surveyed, 19.3 per cent did not recruit any graduates as part of their 2013 intake, an increase of 6.8 per cent from the previous year.

As can be expected, many graduates often end up working in menial jobs with little or no relevance to their chosen field.

Thomas Mcleish, 21, graduated from his Economics and Finance degree half way through last year. He is currently employed at a coffee shop.

“I’ve been doing some bookwork there to try and gain experience but I’ve had to spend a majority of time on the café floor. It’s not ideal,” he says.

Bruce Guthrie, the director of Graduate Careers Australia believes that there are a limited number of positions available for certain industries.

“There are quite a few graduates that don’t get the jobs they aspire to. That could be because there are not enough of those jobs to go around.

For example, the numbers of archaeology positions in the country are limited and that goes for a wide range of other fields. People can be underemployed due to their own judgements,” he says.

The job market and state of the economy also play a role.

Over one-third of 484 employers surveyed by Graduate Career’s Australia indicated that ‘economic conditions’ was the key issue affecting the total amount of graduates hired. The second reason was ‘budgetary conditions’. Quality and experience of graduates was also listed as a reason, but less likely to be an inhibiting factor.

According to Mr Guthrie, the issue is symptomatic of a weak economy.

“A lot of graduates are underemployed because there are no other options.

I would say this is due to the state of the economy and it’s stopping them from getting the job they would normally fall into,” he says.

As a result, the competition amongst graduates has increased. In 2007, 62.4 per cent of employers surveyed indicated they had difficulty sourcing and recruiting graduates in their particular discipline. This has since decreased to 32.6 per cent in 2013.

“There has certainly been more competition over the last few years. What we’re seeing here is a change in the labour market in terms of demand for new graduates,” says Mr Guthrie.

“Until we see a little more confidence in the local economy, the changes will likely affect the current cohort of graduates.”

And it seems job seekers have been affected as employers become increasingly cautious to take on graduates in full time positions.

Research by Mission Australia found that of 200 employers surveyed last year, a majority were looking to take on graduates in casual positions.

Statistics by the Foundation for Young Australians indicate that casual workers currently represent approximately 25 per cent of the workforce.

But does a lack of demand for jobs result in fewer enrolments in university courses? Figures show that despite decreases in employment rates, participation in education is on the rise.

According to the Australian Bureau of Statistics, between 2005 and 2010, the number of students in higher education rose by approximately 25 per cent from 957,000 to 1.2 million.

The FYA found that overall participation in tertiary education for 20-24 year olds has increased from 24.7 per cent in 2002 to 31.5 per cent in 2012.

Furthermore, the proportion of Bachelor degree graduates under 24 going on to further full time study decreased from 2002-2009 by 7 per cent. The figure has since increased from 21.9 per cent to 24.8 per cent in 2012.

Mr Guthrie says an increase in supply has had an adverse effect on employment.

“Following government reports we’ve seen an increase in university graduates coinciding with a decrease in the number of graduates being hired.

It’s one of those pinches we get in terms of supply and demand that is quite unfavourable to graduates,” he says.

The Australian government recently conducted an inquiry into the university ‘demand driven system’, a policy that allows universities to adjust enrolments based on demand for courses.

Prior to this, the government was allowed to place a cap on the number of enrolments that universities could give to students.

Dubbed the ‘Kemp Norton review’, the inquiry moved to keep the ‘demand driven system’ and made a number of recommendations, including extending the system to diplomas and TAFE’s.

The implementation of the demand driven system has led to an increase in student places, from 469,000 places in 2009 to an estimated 577,000 in 2013. In some cases, entry level requirements for courses were lowered.

And while more people in education can be seen as a positive, recent survey data shows that employment rates for a number of industries are declining.

Jenny Lambert is the director of education, employment and training at the Australian Chamber of Commerce and Industry. The ACCI believes the issue of youth unemployment requires urgent attention.

Ms Lambert says the increase in university graduates is concerning.

“We did a submission to the Kemp Norton review and our biggest concern was skills utilisation and whether the labour market will soak up the larger amount of students coming out of university,” she says.

She says it was too early for the government to review the demand driven system.

“The biggest problem with the review is it’s too early to tell whether reform is required.

We wanted the government to wait a year or two until those affected had graduated. This would’ve determined whether the outcome required a change in policy,” she says.

Law is just one of the industries experiencing oversupplies. The amount of new graduates has more than doubled in the last decade. In 2001, over 6,000 graduates had completed some form of under-graduate or post-graduate qualification. Today, the figure is just over 12,000.

As a result, employment rates have fallen by over 10 per cent, with 30 per cent of graduates surveyed in 2012 not working in the legal field.

Just ask Brad Woolstencroft, who currently works at Woolworths as a supervisor. He says that an oversupply of legal graduates has affected his employment prospects.

“When I began my law degree I didn’t think it was going to be this difficult to get a job but I soon discovered there was an oversupply of junior lawyers and law graduates,” he says.

“I’ve studied for almost six years and at almost every job interview I’m told I’m a good candidate but not what they’re looking for.”

Teaching is also a concern, with the Victorian education department employing half of its teaching graduates in 2012, with about 2,500 left looking for a job.

Furthermore, about 40,000 teachers in NSW and 16,000 in Queensland are on departmental waiting lists for a permanent job.

Mr Guthrie says that law students and teachers face challenges in finding employment.

“Teachers face a bit of difficulty in finding their first full time role.

A lot of people don’t go into law as there is a limited demand for jobs,” he says.

Ms Lambert is less hopeful, noting there are a limited amount of jobs currently available for teachers.

“In theory all the labour forecasts are showing the growth in jobs will be in health and education because of the aging workforce and the number of extra people doing education.

But we know in practice there is not enough graduate places available for nurses and teachers at the moment,” she says.

So should a reduction in demand result in less supply? Mr Guthrie argues that supply should always exceed demand.

“While there may be a problem of graduates coming out of university unable to find work that doesn’t mean you should cut off the supply.

“People still need to study and it may be there is a sudden turnaround in the economy and you don’t want to have a notably reduced amount of people studying,” he says.

Of course, it’s difficult to predict when this may occur and some experts have accepted the job market is entering uncertain times.

“There are a lot of changes happening at the moment and we don’t fully know what’s going on,” Dr Sheen says.

But how can graduates get ahead in an increasingly competitive market? Dr Sheen says that graduates need to utilise multiple skills.

“One specific area is not going to cut it anymore. Young people should try and make it across a couple of other areas.

Learning skills in multimedia for example would assist journalists in finding a job now that the industry is moving digital,” she says.

And although multiple skills can assist job seekers, it seems a high number of graduates are either working for free or unemployed.

According to the ABS, since 2008, the long-term jobless rate among those aged under 24 has tripled, equating to more than 250,000 unemployed.

Many interns find they are not being paid. A recent report released last year by the University of South Australia concluded that “an oversupply of qualified graduates” was a key factor to interns not receiving remuneration for their work.

Ms Lambert says that students should be cautious in choosing what they study.

“While it is true that students should study what they’re interested in they also need to go where the jobs are.

At the end of the day many people are not sure what they want to do and they should and could take better advantage of where the jobs will be in the future,” she says.

But what can graduates do to maximise their work opportunities?

Ms Lambert stresses the importance of getting students into work placements. Recently, the ACCI called on both the federal and state governments to tackle the issue.

“We’ve been working with Universities Australia to get universities to include more on the job experience built into courses.

Law graduate Brad Woolstencroft says that universities need to offer more work experience for courses such as his.

“There are not enough programs for graduates of business and law students like there are for medicine, education and nursing where the placements are already provided,” he says.

So where does the future lie for students transitioning from education to work? Ms Lambert says that better government policy is required.

“In a tighter job market it becomes harder to compete and employers aren’t just looking for the skills but also experience.

The future of work depends on a combination of good government policy which at the moment is a bit piecemeal and a better culture of work experience opportunities.”

 

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