05The nature of the new graduate workforce

The ability of a place to attract degree holders from other parts of the country depends on the economic opportunities that it provides for highly-skilled workers. This section looks at the characteristics of the new graduate labour market in Birmingham.

Birmingham’s new graduate labour force is dominated by ‘home-grown’ graduates

Figure 19 brings together all the graduates who decided to work in Birmingham on graduation to provide an overview of the nature of the graduate workforce. The largest share is represented by ‘home-grown’ graduates. This is higher than the figure for the UK as a whole and the second highest share among UK cities, after Middlesbrough.

It has a lower share of high-achievers

Figure 20 shows that in terms of the class of degree achieved, the composition of Birmingham’s graduate workforce is different from that of the UK as a whole. The share of new graduates working in Birmingham with a First or Upper Second Class degree from a Russell Group University – 13 per cent – was lower than the national average – 16 per cent. Birmingham also had a higher share of working new graduates with a Lower Second, Third or Pass from a non-Russell University. This seems to be linked to the ‘home-grown’ element discussed before: when we look at the class of degree achieved for this group, more than two fifths had a lower second, third or pass from a non-Russell Group University.

Graduate job opportunities are the main factor in attracting new graduates

Graduates working in Birmingham earn on average £21,750 and this is below the mean UK graduate wage of £23,100. But while wages can play a role in the graduates’ decision of where to work, research shows that it is the job opportunities and career progression that matter the most: cities that gained the largest number of graduates were the ones with a high share of KIBS jobs.⁴ So this figure should not have much impact on the city’s ability to attract graduate workers.

Where there may be more of an issue is in the types of jobs available. Looking at the industry breakdown shows that 55 per cent of all new graduates working in Birmingham were employed in publicly funded jobs and this is higher than for the UK – 46 per cent (see Figure 21). In contrast, the share of new graduates working in KIBS – 12 per cent – is lower than the national average of 15 per cent.

And better job opportunities seems to be the reason why many graduates leave Birmingham after graduation. When we look at the sector breakdown of Birmingham’s graduates who left after university the share of new graduates working elsewhere in KIBS is higher than that of those who work in Birmingham, as shown in Figure 22.

If the number of new graduate opportunities in KIBS is to increase in Birmingham, it’s likely that the city centre will play a central role. In terms of all new graduate jobs, the B15 postcode (which is home to the University of Birmingham and the Queen Elizabeth hospital), was home to the highest share of all new graduate jobs. But the B1 and B3 postcodes were home to more than a third of all KIBS jobs. This reflects the trend seen in recent years of an increasing concentration of KIBS jobs both in Birmingham city centre and other successful city centres in Britain in recent years.⁵

This has occurred because of the particular benefits that city centres offer – namely access to large numbers of skilled workers and other higher-skilled businesses, be they clients, collaborators or competitors. As the UK continues to specialise in these types of activity, city centres are likely to play an ever larger role in the national economy.

Summary

Looking at the new graduates working in Birmingham reveals that:

• The largest share of the new graduate workforce in the city is home-grown: people who were originally from the city, decided to stay for university and then for work.
• The city has a lower share of high-achievers (those with a First or Upper Class degree) than the rest of the UK and this is related to the underperformance of its home-grown graduates.
• The majority of the new graduates in Birmingham are employed in publicly funded services and the share of this is considerably higher than in rest of the country.