Are the world’s best brains gainfully employed? Ask the barista with a PhD. Or the well-qualified international graduate with a Business Analytics Master’s Degree working in a series of unfulfilling part-time internships. Or the engineering graduate who is rejected by an applicant tracking system for a spelling error on her CV. I think we all know the answer: there are many, many well-qualified people around the world who are unable to find work, or create their own venture, or join a start-up commensurate with their innate brainpower and skills.
We see this evidence everywhere:
- In educational leader South Korea, 30% of university graduates are estimated to be underemployed, with 90% of those measured in this underemployed state for over two years.
- In both the US and Europe, this National Bureau of Economic Research produces underemployment data in twenty-five countries and concludes that underemployment “remains elevated” across the board.
- An estimated 43% of recent US college graduates are deemed underemployed largely due to vocationally-oriented majors and mismatches with labor demand.
- Australia, one of the most economically “lucky” countries is now reporting underemployment as the new normal with male underemployment of 6.5% and female 10.5%, particularly among younger workers where full-time employment is weak.
- A full 90% of Africa’s labor markets, largely informal, are estimated to be underemployed (based on 2015 data) due to lagging human capital, education and market demand.
- In Brazil, 25% of the workforce is either unemployed or underemployed, including those highly trained.
- India lacks public data on underemployment but it is widely reported that the country faces both unemployment and underemployment, including for many of its university graduates, where for some “unemployment is a luxury.”
Finally, and more anecdotally, there is significant observed underemployment at the graduate level in the US, although more comprehensive survey measures are not readily available (I run one of the largest PhD career platforms and can report that our internal data reveals the underemployment problem every day).
What accounts for this underemployment?
Certainly people with a ton of education can lack initiative, confidence or social capital. Some lack training for particular work. Some don’t even know what transferable skills they have or refuse to look outside of their academic silos for opportunities beyond their field. Then there are recruiters and HR people who often need to be convinced that a PhD in anthropology is not “too qualified” to work as a marketing manager at Uber. There are structural impediments such as international graduates who lack long-term work visas in their adopted country of study and have limited employment mobility elsewhere. Or local economies that are unable to absorb highly skilled labor. There is also the sheer madness–and eventual frustration–of posting 249 resumes on LinkedIn and getting no reply, which can lead easily to lower expectations. Finally, oversupply in the post-graduate factory can drive its own job scarcity.
Whatever the reason, the solutions currently available to highly trained post-graduates—AI, skills matching, recruitment platforms, applicant tracking systems, real-time job data, upskilling labs, career coaching, and better public policy—are only beginning to chip away at the problem. Meanwhile university post-graduate enrollments continue to expand (Master’s degrees becoming the “new Bachelor’s degree” and in some cases a PhDs becoming the “new Master’s degree”) while tuition and the opportunity cost of multi-year study for post-graduates continues to increase, as do student expectations for improved employment prospects.
Opportunity Cost at the Top of the Pyramid
Figures 1 and 2 below provide some illustration of the addressable post-graduate market globally, and the emerging pipeline at the top end of the market with roughly 2.5 million PhDs.
- If we combine PhD and Master’s level enrollments, the average global penetration rate (graduate students as % total tertiary enrollments) is 12.2%. For comparison, the US and UK have a slightly higher penetration rates of 12.2% and 15.5%, respectively, with the most top-heavy post-graduate markets being Germany (39.1%) and France (37.8%). Conversely, China remains far below the global advanced degree benchmark with a 5.8% penetration rate suggesting significant scope for future growth compared to India (at 13.3%).
- Enrollment at the Master’s and Professional Degree level reached 24.2 million students by 2017, or nearly 10 times the size of the global PhD cohort. India accounted for almost 17.5% of total global Master’s enrollments, far above other leading Master’s student markets such as the US (10.5%), China (9.2%) and Russia (5.1%).
Growth in total degrees continue to rise across the forecast period.
- Given the surge in Bachelor’s degrees over the past decade, we will almost certainly see higher demand for post-graduate degrees around the world over the next decade–in fact, one estimate suggests 3.06 billion people with a post-secondary education compared to an estimated 840 million in 2020 (see Figure 3).
- These students will expect full employment.
What are the emerging solutions?
A Marriage of Edtech, CareerTech and HRTech
- Use of job analytics platforms to better inform curriculum-to-work pathways across international markets.
- More intuitive assessments and recruitment platforms rather than old-school job boards.
- Active industry participation and tools delivered beyond undergraduate levels and into the humanities/social sciences.
- Micro-internships for Master’s and PhDs.
Expanding career mobility options, “advanced degree passports” and tools on a global scale. While the international student market has achieved high mobility–with over 5 million students studying outside of their home country–the international graduate employment market has not. Visa constraints are only part of the problem. Not every graduate wants or will gain a pathway to work and citizenship. In the US helping international graduate students with their career options is particularly hard for universities to achieve. They don’t have deep knowledge of jobs and careers in a student’s home market, and, even if they did, are not particularly well-equipped to focus specifically on international student career needs. Creating a open network of skill validation and recruiting across countries, and internships that facilitate this, would help.
Where to invest?
- Specific employer recruitment resources focused on global opportunities/activities for graduate students.
- Universities integration with platforms to facilitate networking and employment back home or in 3rd party countries (such as what cTurtle is doing in Asia).
- International internships in student origin countries to ensure local knowledge is not lost.
- Creation of an “advanced degree passport” for specific degree holders with opt-in countries drawing from a global pool of talent.
Securing employer validation of advanced degree credentials and transferable skills. University career centers and related service provider spend a lot of time and effort helping graduate students understand, develop and project their transferable skills to potential employers. But many employers still struggle to understand the vast array of learned skills that, say, an English or Anthropology PhD might provide to the workplace (how about research design and methods, communication and writing acumen, critical thinking, collaborative skills, long-term project management to name a few?). Specifically, hiring entities need to get beyond job descriptions and toward active validation of advanced degree skills. Companies like Credly have done this for the general working population and across many countries in partnership with IBM. We need a specific focus at the top of the pyramid where higher-order skills can be validated, tracked and and well-utilized.
- Deeper global industry/employer validation of advanced degree and higher-order skills.
- Transferable skills framework for advanced degree holders in partnership with employers.
- Virtual MA/PhD platforms to facilitate validation, networking, recruitment and readiness on a global scale.
Prioritizing social and commercial entrepreneurship training. Entrepreneurship skills are not just about building the next Google. They are about establishing a mindset to thrive in the future world of work, from finding a job to building a lifetime of many jobs. They apply to the lone PhD candidate exploring new research areas and finding academic backers, the scientist running a lab and searching for federal or start-up funding, or the public policy graduate that wants to tackle climate change through AI. In the US, start-ups have fed employment for skilled and unskilled labor but recent figures suggest slowing entrepreneurship within the start-up ecosystem. This does not bode well for employment and innovation, and limits an important potential pathway for graduate students.
- Entrepreneurship programs that are embedded more directly with graduate academic work.
- Tailored entrepreneurship programs focused on the liberal arts and non-STEM fields.
- Platforms that more effectively match post-graduate entrepreneurs with venture and work opportunities on a global scale.
This is a long to-do list. But if you think pressure on recent university graduates, and their stakeholders (parents, universities, student loan creditors) is going to diminish in a world with many more Masters and PhDs, higher tuition and opportunity costs of study, and the advance of robots into skilled work, think again.
The future of underemployment is here.
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