It’s harder than ever for university graduates to gain full-time employment. And it’s simply unfair, as many have done, to blame ‘lazy millennials’ for this. It’s also simplistic to point the finger at universities for not keeping up with the pace or to suggest that employers are being too picky.
The world is moving faster than ever before and if students are to thrive in the workforce, the education system that supports them needs to adapt.
Greater numbers,
declining outcomes
In the 1970s, less than 200,000 students¹ were enrolled in Australian universities and their prospects for secure employment after graduation were excellent. Establishing a good career and buying a home was all but guaranteed.
Fast forward to 2017 where more than a million Australians are studying at university², but their outcomes are very different. With 37% of 25-34 year olds in Australia now holding a bachelor degree or higher³, competition is fierce and proportionally fewer people are finding employment after completing higher education.
A 2014 study by the National Institute of Labour Studies at Flinders University showed new graduates of Australian universities faced the toughest labour market on record. Between 2008 and 2014, the proportion that were in full-time employment dropped from 56.4% to 41.7%4.
The financial outcomes for a university education aren’t stacking up so well, either. Skilling Australia Foundation revealed that TAFE students, who are predominantly on vocational courses, enjoy starting salaries worth around AU$2,000 more than their university educated contemporaries5.
The findings of the Melbourne Institute’s HILDA Survey, released this month, also show that recent graduates are paid less than they were a decade ago6.
The changing landscape
of employment
A few decades ago, we couldn’t have imagined a world where technology would be such a powerful force. But the digital revolution and the incessant rise of new and emerging technologies means that many jobs of today will not be around tomorrow.
PwC’s 2015 report A smart move revealed that 44% of Australian jobs are at risk from digitisation over the next 20 years – particularly professions such as accounting and financial administration (teachers, on the other hand, are judged to be on relatively safe ground).
Another estimate, cited by the World Economic Forum in its 2016 report The Future of Work, is that “65% of children entering primary school today will ultimately end up working in completely new job types that don’t yet exist.”7
The good news is that new jobs will be created. But what sorts of skills will these roles require? And what sort of people will work in them?
Skills or
experience?
What’s undeniable is the demand for graduates with a STEM (science, technology, engineering and mathematics) background. Research indicates that 75% of the fastest growing occupations now require these skills, yet in 2012 only 16% of Australian higher education students graduated in STEM-related subjects (Singapore’s figure, by contrast, was 52%).
The challenge goes deeper than just what’s on the curriculum, though.
As roles continue to evolve, a static bank of knowledge won’t serve students well throughout their careers – working lives that, in many countries, will extend as retirement ages increase. Rather, it’s the types of thinking these disciplines demand that will be crucial.
At the head of the tech pack, some companies are now recruiting individuals as much for their behaviours as their expert knowledge. According to Business Insider Australia, for example, employees at global software giant Atlassian should have strong technical skills, but they must be problem-solving team players that seek feedback and operate with integrity8. This is borne out by PwC’s latest CEO Survey, which shows that problem solving and adaptability are considered the two most sought-after traits of recruits.
Race you
to the job
There’s also a huge opportunity here for innovative and flexible learning models that support the changing needs of business and students. In the UK, where an undergraduate course typically takes at least three years, universities can now offer intensive two-year degrees. Not only do the lower overall living costs make it cheaper to obtain the qualification, but candidates join the workforce sooner9.
Indeed, why should degrees be studied in one go, anyway? Can the relationship with students not extend across a lifetime, allowing them to return to upskill at any point in their career? We’re already seeing this shift. Just over 40% of students are aged 25 or above10; this more mature student landscape is a result of individuals returning to campus to develop further skillsets.
A more suitable model of education might be to evolve from a ‘study first, work afterwards’ approach to a lifelong, subscription-based system of learning.
Another way to ensure that courses are relevant to today’s business needs is to bring the workplace to the students. Replacing information-based learning with challenge-based learning, Team Academy is a Finnish institution offering degrees that are wholly entrepreneurial.
Driven by its philosophy ‘Learning to work entails working to learn’, in their first fortnight students are tasked with building real businesses that will generate income. The idea is not only to acquire practical skills in finance, marketing and strategy, but develop the capacity to leverage creativity and work with others.
The value
of a degree
Some of us may recall university as a time for exploring independence, building social networks and (for some10 at least), having fun living away from home for the first time. But as fees go up, higher education is increasingly seen as a major financial investment. This means that students are seeking a return on that investment and weighing up future employability as a deciding factor when selecting courses.
Consequently, at the other end of the journey, many universities are also doing their bit to improve their student’s ’employability edge’.
Monash University offers an online tool, Student Futures, developed by our team here at PwC, which helps students identify and develop their employability skills during their time at the university11. It was set up in response to feedback from employers that candidates were struggling to articulate the value of the skills they learnt as undergraduates. Student Futures, which maps those skills to nine key ‘employability’ categories, seeks to encourage students to think about positioning themselves for today’s job market through the recruitment lens.
The role of industry
in education
It can’t be left to the higher education sector alone to predict and respond to future employment. Industry has a part to play, too.
Stanford d.school, based at Stanford University in the US, invites partners from non-profit, corporate and government organisations to develop projects for its students that address real-world challenges.
Here in Australia, the University of Canberra recently teamed up with PwC to offer a six-month industry based program that will give participants the same professional experience as graduate trainees.
“When students engage with industry throughout their studies, everyone benefits,” said Professor Lawrence Pratchett of the Faculty of Business, Government and Law. “Students [on this program] learn by applying theories and concepts in the workplace as well as developing essential employability skills, networks and a deeper understanding of their professions, while the organisations they work with benefit from the students’ fresh approach and innovation.”12
Reassessing the
education model
With so much uncertainty around the shape of future jobs, academic qualifications alone aren’t enough to ensure career success. Employment goal posts may have moved, but this is no different to any other revolution.
Merely updating the curriculum to reflect the latest job requirements is a game of catch-up. In the true spirit of disruption, universities need to address the very model that current education systems are built on. This requires reassessing the whole value chain, from entering university, to teaching and learning, research, and industry and community engagement.
Today’s students aren’t the only ones faced with reimagining their place in a world of brilliant invention – the institutions built to guide them there must do the same, too.
Learn more about how the workforce might be shaped in the coming decade. Click here to download PwC’s August 2017 report, Workforce of the future, The competing forces shaping 2030.
