Does the UK really need more engineers?

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Similar levels of unemployment among non-STEM graduates suggest that a STEM degree, in itself, does not necessarily provide an advantage

The UK economy, which seems at last to be finding its feet and starting to grow, might any day be brought to its knees by a shortage of science and engineering graduates. That dire warning has been sounded repeatedly over the past few years, and anyone who follows the news would think that calamity is just around the corner.

Bleak headlines have been generated by report after report issued by major bodies such as the Social Market Foundation, the CBI and the Royal Academy of Engineering. The last of these, published in 2012, suggested that as many as 100,000 more graduates in science, technology, engineering and mathematics (STEM) subjects would be needed by 2020 as the service sector wanes while innovation and high-tech manufacturing drive growth.

It is certainly a compelling narrative, but not everyone is convinced by it. One sceptic is Robert Dingwall, part-time adviser to the School of Social Sciences at Nottingham Trent University.

“There are some local shortages, and there are some unrealistic expectations from employers; but generally speaking, there is no particular reason to think that the country is experiencing a [STEM] skills shortage,” he says.

“Clearly employers have to put some work into finding the right graduates. There is an expectation that universities will do all the work for them.”

Nigel Steele, honorary secretary of the Institute of Mathematics and its Applications, dismisses naysayers such as Dingwall as “having an axe to grind” and claims that their position “flies in the face of all the evidence”. But what is the evidence? Steele argues that the relatively high starting salaries enjoyed by STEM graduates indicate that they are in demand from employers. But Dingwall counters that the differential is not great enough to suggest a genuine mismatch of supply to demand – which is why the financial industry is still able to poach some of the best STEM graduates.

For its part, the government clearly accepts the shortage argument. Initiatives to boost the uptake of science and engineering subjects at the secondary and tertiary level are numerous and varied. In universities, some STEM disciplines are deemed by the Higher Education Funding Council for England to be “strategically important and vulnerable” subjects (“Sivs”). This denomination, introduced in 2005 and revamped in 2012 in light of the coalition’s higher education reforms, is intended to ensure the continued availability of places in subjects such as chemistry, physics and chemical engineering in the event of “market failure”. Not all Sivs are STEM subjects, but most are, and Hefce has so far spent £350 million supporting them.

Emma Smith, professor of education at the University of Leicester, cautions that if no STEM shortage exists, such initiatives “risk being counterproductive, merely increasing the number of unemployed or underemployed graduates”. She investigated the issue with Stephen Gorard, professor of education and well-being at Durham University’s School of Education. For a paper they published in the British Journal of Educational Studies in 2011, they scrutinised data on university applications and admissions and graduate destinations, and concluded that there is “insufficient evidence” of a genuine shortage.

Smith says that the arguments for a shortage “tend to be driven by the [STEM] sector”. Noting that other sectors often make similar cases, she points out that worries about a declining flow of graduates into the teaching profession just under a decade ago were found to be unwarranted.

Her findings suggest that relatively large proportions of STEM graduates are either unemployed six months after graduation or working in relatively low-skilled jobs. “Similar levels of unemployment among non-STEM graduates suggest that a STEM degree, in itself, does not necessarily provide an employment advantage, at least in terms of the early career destinations for which we have data,” she says. This raises the question of whether STEM degrees adequately prepare students for careers outside the core fields, she adds.

Nevertheless, she warns that debates about shortages are complex and difficult to untangle. That conclusion was echoed by a 2012 House of Lords inquiry into STEM subjects in higher education. It found that the lack of data on the supply and demand for STEM graduates made it “very difficult” to assess whether a deficit truly exists.

In November 2013, the UK Commission for Employment and Skills analysed the supply of and demand for STEM graduates using information from the Office for National Statistics’ Labour Force Survey. The authors, led by Derek Bosworth, associate fellow at the University of Warwick’s Institute for Employment Research, found that, overall, the core STEM sectors (excluding medicine, dentistry and related subjects) employed about 45 per cent of graduates with degrees in those fields in 2011.

But data on core STEM graduates who left university in the same year suggest a shift: only one-third worked in a core STEM job or a core STEM sector or both, compared with 45 per cent of 2001 graduates. The report suggests that this drop might be at least partly the result of a change in occupation and sector classifications, but says it could also reflect the rise of less demanding study programmes and the emergence of new subjects, such as sports science, that may not provide graduates with the skills employers want. It might also reflect a trend of STEM workers “spreading out throughout the overall workforce”, a tendency exacerbated by the recession driving graduates to take whatever jobs they can find.

Even if there had not been a recession, predictions about the supply and demand of STEM graduates for 2020 outlined in the report do not suggest that there would have been a shortage in most regions of the UK. Based on 2007 (pre-recession) figures, only Scotland and the South East of England would have suffered one.

Meanwhile, interviews conducted with employers as part of the analysis point to shortages of electronic and electrical engineers. They also reveal that recruitment for certain STEM positions relies on a small pool of universities. Some universities have cut back on equipment and laboratories, with the result that today’s graduates may have less hands-on experience than previous cohorts.

David Lynch, global head of engineering at the pharmaceutical company GlaxoSmithKline, says that last year he was unable to fill two graduate electrical engineering positions; in the previous year, he had to recruit for these jobs from overseas. He adds that the engineers required to help automate manufacturing processes are also in relatively short supply.

“For us it varies by discipline,” he says, “but certainly across the STEM subjects there are areas of shortage. It is a bit of a mix between [a lack of] calibre and availability.”

Other major STEM employers contacted by Times Higher Education paint a mixed picture. Procter & Gamble, which recruits on a rolling basis throughout the year, says that it filled the “vast majority” of graduate jobs during 2013. But it pinpoints deficits in mechanical engineering talent. Unilever, which filled all STEM jobs during its graduate recruitment round last year, says that it had about 130 applicants for every graduate STEM post. At BP, meanwhile, a whopping 11,000 graduates applied for places on its early development programme, which offered 138 graduate STEM positions and 92 STEM internships, all of which were filled.

Suzy Style, BP’s head of UK graduate recruitment, says: “Increasingly we are seeing that there are STEM graduates out there, but there are lots of other companies fishing in the same pool, trying to get the best and brightest of that group.” She adds that BP has challenges finding automotive engineers and geophysicists.

Overall data on the number of graduate jobs available in STEM areas are difficult to come by. Research conducted last year by the employment consultancy Work Communications totted up the places on all graduate schemes offered by UK employers in all sectors and found 65,000 places for the academic year 2012-13. To put that in context, 132,790 UK-domiciled students graduated with a first degree in STEM subjects in 2011-12 (the most recent year for which data are available), according to the Higher Education Statistics Agency.

Marcus Body, head of research at Work Communications, says: “As soon as you look at the numbers, it is very hard to justify [claims of] a skills shortage.” Echoing Dingwall’s point, he says that for all the talk from industry about needing and valuing STEM skills, businesses are not competing for STEM graduates on salary. Currently, he says, the top-paying graduate job is at Aldi supermarkets, which provides an annual salary of £40,000 and a fully expensed Audi A4. “No engineering company offers this,” he notes.

But the Institute of Physics’ director of education and science, Peter Main, argues that there is indeed a wage premium for STEM graduates but that it can be hard to spot. The institute learned from tracking physics graduates for five years between 2006 and 2010 that although the median starting salary for graduates after one year was only about £22,500, a year later 40 per cent of graduates were earning more than £25,000, he says. Main notes that almost no data on graduate destinations go beyond three years, and he says this is when the real physics graduate premium “kicks in”.

The institute’s study also found that more than half of all physics graduates remain in higher education one year after completing their undergraduate course. “That means that the better graduates are going off to do PhDs, so you are not really comparing like with like when you compare graduates within the first three years of employment,” Main says.

For engineering graduates, the situation is even more complex. Anecdotal reports from graduates seeking employment suggest that there are two distinct groups encountering different situations. Peter Finegold, head of education at the Institution of Mechanical Engineers, says that graduates with a first or an upper second-class degree are in high demand, but it is less clear what happens to those who graduate with lower marks.

“No one can offer a definitive explanation of what is going on,” he says. “We have a two-stage labour market at the moment, with [both] high skill demands and high unemployment.” This unusual situation suggests that “something strange is happening”, he adds. Recent discussion within the sector suggests that industry is committed to looking more broadly at the graduate crop in the future rather than “simply creaming off the best graduates”, he continues.

Year after year, employers take issue with the quality of graduates and question their readiness for work. Michael Reiss, professor of science education at the Institute of Education, University of London, notes that universities that recruit STEM graduates for doctorates also increasingly complain of a lack of “top-quality” UK graduates, which he attributes to “not enough graduates coming out of really strong STEM departments”.

But, according to Body, there is little evidence to substantiate claims that the quality of STEM graduates is declining. In his view, it is more likely that employers now expect graduates to have more skills than ever before. He adds that any perceived problems are magnified by the fact that STEM employers have a smaller pool to recruit from than other graduate recruiters such as accountancy firms, which can select from among the entire 340,000 home students who graduate from UK universities annually.

One measure that might resolve some of these issues was suggested in the House of Lords report. It called for a body to be established to gather real-time data on the supply and demand of STEM graduates and to report its findings annually to Hefce and the government. But there is no sign of that happening. Until it does, the prophets of doom are likely to continue gratifying the newspapers’ unquenchable thirst for disaster scenarios.

STEM sells: growth of study at first degree level outpaces others

The growth in the number of graduates from all STEM first degree programmes has outpaced the growth of graduates in all subjects, suggests a Times Higher Education analysis of data from the Higher Education Statistics Agency.

Including figures on the number of graduates from medicine, dentistry and veterinary science courses (omitted from the traditional definition of STEM), the number of STEM graduates increased by 81 per cent between 1994-95 and 2011-12, compared with a 64 per cent rise in the number of all graduates over the same period.

Using the traditional definition of STEM, and when the data are broken down by subject, however, there are striking differences in growth (see graph).

The number of engineering and technology graduates, for example, rose just 7 per cent between 1994-95 and 2011-12, whereas the number of graduates of subjects allied to medicine more than doubled.

While the graphic above does not separate home and international students, comparisons can be made of the number of STEM graduates as a proportion of all graduates.

For home students, growth in UK-domiciled STEM first degree awards as a proportion of all first degrees rose by 5 percentage points between 1994-95 and 2008-09, from 36 to 41 per cent.