The report finds:

• One million more professional jobs than workers with degrees in the UK to fill them.
• Double the number of UK employees underqualified than overqualified.
• Artificial intelligence (AI) set to increase graduate demand further with healthcare, IT and marketing expected to see particularly steep rises.

ONS data reveals the number of UK workers in professional jobs has risen from 11.1 million to 15.9 million since 2004, but there remains almost one million more professional jobs than workers with degrees in the UK to fill them.

The number of graduate vacancies is now 20% higher than in 2019 before the Covid-19 pandemic, reports the Institute of Student Employers (ISE), with job vacancies for graduates expected to increase by more than a fifth (22%) in 2022 compared to 2021. 

The report shows that in 2020 the number of UK workers in professional level employment rose by 647,200 and those in other roles fell by 817,000 during the pandemic, and other ONS data reveals graduates were also less likely to be furloughed or in non-graduate jobs because of the impact of Covid-19.

Meanwhile, the Organisation for Economic Co-operation and Development (OECD) estimates that while 14% of the UK workforce is overqualified for their current role but almost twice that number, 27.7%, are underqualified - the second highest level of the entire OECD, behind Ireland.

Future demand for graduate skills looks strong - a recent analysis by PWC suggests that Artificial Intelligence will increase demand for graduates by about 10% with those in healthcare, IT, and marketing in greatest demand.

Professor Jane Robinson, Pro-Vice-Chancellor Engagement and Place, Newcastle University who co-chaired the report committee said: “Our report shows that demand for UK graduates among employers has grown each year and as we recover from the Covid-19 pandemic this is likely to continue.

“Employers and graduates recognise the skills they develop at university – in particular transferable skills such as leadership and critical thinking – are vital to help business flourish. Our highly skilled students have a positive impact on our economic, social and cultural wellbeing and are vital if we are to achieve levelling up.”

"employer demand for UK graduates is significant"

Professor Steve West CBE, President of Universities UK and Vice-Chancellor of UWE Bristol, said: “Students quite rightly want to know that going to university is worthwhile and a good investment for the future. Despite some questioning the value of graduate skills this report shows that employer demand for UK graduates is significant - it has increased year-on-year and is likely to grow in the future.

“A highly skilled workforce is essential to levelling up and creating economic and social prosperity everywhere in the UK. It is important that the UK Government develops the right conditions for universities to fully support business growth and skills development for learners of all ages. To be clear this means that the UK Government must invest in a sustainable long-term funding solution for higher education.”

Alex Hall-Chen, Senior Policy Advisor at the Institute of Directors, said: “With employers consistently citing labour and skills shortages as a top factor having a negative impact on their business, investment in skills will be a crucial element of the UK’s continued recovery from the Covid-19 pandemic.

“Demand for graduate skills among employers remains strong – particularly in transferable employability skills such as critical thinking, communication, and leadership – and the higher education sector will be an essential component in meeting the UK’s rapidly changing skills needs.”

Stephen Isherwood, Chief Executive at Institute of Student Employers, said: “In both the short and long-term the demand for skilled graduates is only going to increase. To ensure that employers can access the talent they require right across the UK economy, it is imperative that we continue to invest in graduate talent.”

The report is available on the Universities UK website.