Graduate ‘brain drain’ – is regional economic growth the solution?

college graduates groupBy Heather Cameron

With the economic performance of cities and regions increasingly reliant on the skills of their workforce, the longstanding issue of graduate ‘brain drain’ to London and the south is something that needs to be addressed.

Although students attend many of the universities spread across the country, a significant number of graduates flock towards the capital at the end of their studies. According to a recent report from Centre for Cities, this deprives other cities of skilled workers and essentially damages the overall economy.

The evidence

A quarter of all new graduates in 2014 and 2015 were found to have moved to work in London within the six months of finishing their degree. And the highest achievers make up a significant proportion. While London accounts for around 19% of all jobs, of the graduates that moved city six months after graduation London employed 22% of all working new graduates, and 38% of those with a first or upper second class degree from a Russell Group university.

Although most cities experience an overall graduate gain, cities outside London don’t retain the majority of students that move to their city to study – the ‘bouncers’ that drive the brain drain overall, overshadowing any gain:

  • Manchester lost 67% of these students upon graduation;
  • Birmingham lost 76%; and
  • Southampton lost 86%.

Other figures show that 310,000 graduates have left the north in the past decade, contributing to a net average deficit of 7,500 highly qualified workers leaving annually, or 75,500 over a decade.

Northern regions have to some extent offset the effect of local brain drain by attracting enough highly qualified foreign workers to fill the gap. But with reductions in immigration, these regions could be left lacking.

Given the UK’s current position regarding the EU, concerns have also been raised over whether Britain faces a further brain drain of academics to Europe, following Brexit. A recent survey highlighted that 42% of academics said they are more likely to consider leaving Britain after the vote to leave.

Why?

While it may seem plausible to assume that higher salaries are the reason for this brain drain, it appears that the main pull for graduates is the availability of jobs and career progression, which London’s vast labour market offers.

However, as recent research from Homes for the North has identified, these are not the only reasons. It highlights the importance of additional non-work drivers of graduate location decisions, including the cost and quality of housing, quality of local amenities and the prospect of home ownership.

Of the graduates polled, 80% said the quality of housing was important, while more than 60% said the cost of housing was important. The quality of green spaces and local amenities was also deemed important by over 60% of graduates.

What can be done to redress the balance?

There have been numerous graduate retention initiatives at the local and regional level aimed at tackling the uneven distribution of graduates, such as graduate wage subsidies and local graduate job matching.  But it seems little has improved. The Centre for Cities research argues that these alone will not tackle the root cause of the graduate brain drain.

It suggests that cities themselves have a vital role to play in ensuring the local job market offers an appropriate number of graduate job opportunities that will allow them to both retain graduates and attract graduates from elsewhere. Policy should therefore broaden its focus to improve local economies by investing in transport, housing and enterprise, rather than focusing solely on graduate retention and attraction policies.

The chief executive of the Centre for Cities commented that the government’s new economic and industrial strategy should be used to strengthen existing devolution deals for city-regions such as Greater Manchester, extending their scope to grow.

Indeed, the industrial strategy green paper, published in January, clearly places emphasis on addressing the economic imbalances across the UK through a number of measures, such as working with local areas to close the skills gap, including new schemes to support the retention and attraction of graduates. However, the strategy has been criticised for providing little clarity on how regional rebalancing and sectoral deals will work in practice.

Final thoughts

While it appears clear that cities outside London need to improve their graduate offer with better job prospects, the evidence on graduate migration suggests it is more complex than this.

As has been argued, the provision of good quality affordable housing could play a role alongside high-skilled job creation and opportunities. With the cost of living in London so expensive, this would make sense, particularly as the average graduate salary in London is not that much higher than the average across other UK cities.


Follow us on Twitter to see what developments in public and social policy are interesting our research team. 

Rise of the Datavores … showing no fear of data, it takes skills

Datavores infographicPrevious work by NESTA highlighted companies with apparently no fear of data. They called them ‘datavores’. When making decisions about how to grow their sales, they rely on data and analysis over experience and intuition.

Does being data active have an impact?

According to a new NESTA report published this week Skills of the datavores: talent and the data revolution, those organisations which are more ‘data-active’ perform better than those that are not, as the infographic above illustrates:

  • Datavores are 10% more productive
  • But, only 18% of companies are datavores
  • If all “dataphobes” became “datavores” it would add a 3% uplift in productivity
  • Data-driven firms are 40% more likely to launch new products and services.

What does a skilled data workforce look like?

The research suggests that the biggest issue facing the industry is the lack of skilled data analysts/scientists, where demand has grown 41%. Businesses are using a combination of actions to solve this lack of supply of skilled people, including off-shoring the roles, recruiting best fit and using a combination of inhouse, on the job and external training to grow their own.

Many organisations are also developing inter-disciplinary teams to create a data literate workforce because the skills needed within a data scientist are so rare; as the report says, as rare as “unicorns”. Our own experience of recruiting a data scientist would support this.

The workforce which is emerging is one focussed on adaption and flexibility, based on data sciences across the board, such as qualitative researchers, mathematicians, statisticians, developers and business analysts. Within this mix of skills, the new workforce also needs to have a creative flair and business knowledge that enables them to use the data in the organisation’s best interest and to add value.

What does it mean for skills suppliers?

As an emerging profession, it is difficult to pin down the exact skills an employer needs which in turn makes it difficult for schools, colleges and universities to supply the right type of education. The accompanying policy briefing from NESTA and Universities UK, Analytic Britain: securing the right skills for the data-driven economy, makes a number of recommendations, highlighted in the infographic above, many of which focus on the skills suppliers.

Universities are both a supplier and user of these skills and have a unique opportunity to really enage with the market. The focus on metrics in both the proposed Teaching Excellence Framework and Research Excellence Framework means that universities themselves are in need of the same skills and have an opportunity to supply based on experience.

For universities these recommendations have a number of impacts, and data issues are increasingly at the forefront of policy thinking. Universities UK has reviewed how data analytics are taught across disciplines and reflects on the shortage of academic staff who are confident in teaching data analytics in this way and the varying skills of students entering higher education.

The pervasive nature of the data revolution explains why a variety of disciplines and skills are being brought together. No one can argue against the need for more and better data to improve policy making and business planning. Plenty of data is now being captured but not used, and in the words of John Lennon “you say you want a revolution” and “we all want to change the world” … data is changing our world significantly but are you equipped for it?


The Idox Information Service can help you access further information on the use of data science, and the skills needed. To find out more on how to become a member, contact us.

Download the Datavores Infographic.

Further reading on the topics covered in this blog and infographic*:

Skills of the datavores: talent and the data revolution

Are you a Datavore? Insights on the use of online customer data in decision-making

UK data capability strategy: seizing the data opportunity

Information economy strategy

Inside the Datavores: how data and online analytics affect business performance

Employer insights: skills survey 2015

Big data analytics: assessment of demand for labour and skills 2013–2020

UK corporate perspectives: new technologies – where next?

*Some resources may only be available to members of the Idox Information Service

Higher apprenticeships – the way forward?

apprentices in workshopBy Heather Cameron

With the mounting costs associated with higher education study, it isn’t any wonder that young people are looking for alternative routes to their chosen career.

A recent survey has found that 4 in 10 of the first students to pay the higher tuition fees of up to £9,000 per year, say university is not good value.

Opinion varied between students doing different types of courses however. Two-thirds of those studying science, technology, maths and engineering – where a lot of practical teaching and staff time is required – said their courses had been good value.

It would seem that employers are also looking for more than just academic qualifications. It has always been something of a catch-22 situation for graduates who can’t get a job because they don’t have the required work experience, despite having relevant qualifications.

A recent study by the Institute for Public Policy and Research revealed that graduates and A-level students are three times more likely to be jobless a year after finishing their courses than apprentices. It also found that unemployment rates have risen at all levels of education, except within apprenticeships.

Higher apprenticeships

According to a study by ICM Research in 2013, those with a higher, degree-level, apprenticeship were rated by employers as the most employable, ahead of those who had university degrees. The top six qualifications rated the most valuable were:

  • Higher Apprenticeship
  • University degree
  • Advanced Apprenticeship
  • Intermediate Apprenticeship
  • Level 3 vocational qualification
  • A-Levels

Indeed, the many benefits to businesses of higher apprenticeships have been recently highlighted. They enable employers to gain links with universities and colleges which can help them to develop learning programmes based on the skills they need. The National Apprenticeship Service says that higher apprenticeships are critical to the economy as they:

  • respond to employers’ higher level skill needs;
  • support business growth;
  • meet individuals’ career aspirations;
  • and enhance opportunities for social mobility.

Higher apprenticeships, created in 2009, offer a work-based learning programme which includes the achievement of academic and vocational qualifications and learning from level 4 up to bachelor’s and master’s degrees at levels 6 and 7 respectively. Degree apprenticeships are the latest model to be developed as part of the higher apprenticeship.

Research by the Centre for Economics and Business Research (CEBR) has estimated that the lifetime benefit of undertaking an intermediate apprenticeship is extra earnings of between £48,000 and £74,000, and an advanced apprenticeship between £77,000 and £117,000.

This figure rises to over £150,000 for a higher apprenticeship, comparable to university graduates.

Roll out and take-up

In 2011 the government announced a £25 million fund to support up to 10,000 advanced and higher apprenticeships in order to help businesses, particularly small and medium sized enterprises (SMEs), gain the high level skills they need to grow.

The Higher Apprenticeship Fund (HAF) aimed to develop a range of higher level apprenticeships, and fund 20,000 apprentices by 2015. The fund was awarded to 29 higher apprenticeship projects, in sectors including accountancy, engineering and law. The government has announced an additional £40m to fund places up until July 2015, and an extra £20m to fund the higher educational element to the end of March 2016.

Following the introduction of the fund, the number of higher apprenticeship starts rose by 68% in 2011/12. There were almost 10,000 starts during 2012/13, representing growth of 165% on the previous year.

In the last academic year over 9,000 people started a higher apprenticeship, with numbers continuing to grow.

Role of universities in providing vocational education

With the growth in higher apprenticeships, universities and other higher education institutions (HEIs) have an important role to play in this provision. The 2015/16 academic year is the first time that there will be a substantial group of HEIs in the apprenticeships delivery network.

A collection of recent think pieces have made a strong case for greater vocational education through universities and colleges. One contributor notes that governments around the world widely accept that vocational education is the way to meet growing industry needs and fill identified skills gaps. But policy makers in the UK are faced with the obstacle of an old-fashioned education system.

It is clear that the traditional form of higher education is not going to supply businesses with the higher level skills needed for economic growth. According to research by the UK Commission for Employment and Skills (UKCES), by 2022, two million more jobs will require higher level skills. More than one in five of all vacancies are ‘skills shortage’ vacancies – where employers cannot find people with the skills and qualifications needed.

The research highlights the importance of collaborations between employers and universities in the supply of highly skilled people to meet this demand. It argues that universities and employers need to be innovative, and engaged in promoting different and non-traditional routes into higher skill roles.

Good practice evidence of such collaboration already exists in the UK, as showcased by the 12 case studies, which explore the reasons for and benefits of collaboration in six industrial sectors – Advanced Manufacturing, Construction, Creative and Digital, Energy, IT and Life Sciences.

Across a wide range of collaboration with employers, universities contributed more than £3.5 billion to the UK economy in 2012/13, a 5% increase from the previous year. Significant volumes of courses and continuing professional development (CPD) are also provided by UK HEIs directly to employers, with £423 million worth of business completed in 2012/13, of which £19 million was with SMEs.

Nevertheless, there is still much room for improvement. Policy makers, HEIs and businesses all need to work together if the drive towards higher level vocational education is to succeed.


The Idox Information Service can give you access to a wealth of further information on vocational education – to find out more on how to become a member, contact us.

Further reading

Polytechnics-plus: releasing the potential of colleges, IN Graduate Market Trends, Spring 2015, pp12-13

Higher apprenticeships better than university, IN Workplace Learning and Skills Bulletin, No 120 14 Jul 2014, pp2-3

Economic impact of apprenticeships: a Cebr report for the Skills Funding Agency. Centre for Economics and Business Research (2014)

Improving employability skills, enriching our economy: case study report. National Foundation for Educational Research (2014)

Tomorrow’s growth: new routes to higher skills. Confederation of British Industry (2013)

The potential for higher apprenticeships: research report. Learning and Skills Improvement Service (2013)

Some resources may only be available to members of the Idox Information Service

A story with a happy ending? The UK labour market and the future of skills

Skills, Knowledge, Abilities

by Laura Dobie

Last week the UK Commission for Employment and Skills published The Labour Market Story, a series of reports exploring how the UK labour market is working following recession. In this article, we take a closer look at the results and key findings.

The reports reviewed research from the UKCES, other UK organisations and international sources to investigate:

The research revealed that while the UK economy is returning to sustained recovery, this has taken longer than before. There has been sustained growth in self-employment, and a rise in precarious forms of work, such as casual and short term work, and zero hours contracts. Youth unemployment is four times the rate for those aged 24 to 64.

There has been a long term reduction in administrative and secretarial work in many industries, typical middle level jobs, which has led to increasing polarisation in the labour market. Those with higher skills and qualifications are more likely to remain in employment and have considerably greater earnings prospects, highlighting the importance of skills in individuals’ labour market outcomes.

Continue reading

The barrier that could put the brake on growth

skills gap

by James Carson

As the UK economy shows signs of recovery from the longest and deepest recession since the 1930s, more employers are starting to think once again about recruiting new staff. But many are finding it hard to fill vacancies because of a shortfall in skills.

The latest survey of employers by the UK Commission for Employment and Skills (UKCES) has found that nearly a quarter of UK vacancies went unfilled because of a shortage of much-needed skills. Continue reading