Addressing the Graduate Skills Gap

Addressing the Graduate Skills Gap

Under the Morrison government’s 2020 higher education funding scheme, universities will receive funding based on their performance across four new performance measures, the most highly weighted of which is ‘graduate employment outcomes’, which is measured by the proportion of graduates who are able to find employment after they have finished their degrees.

Now more than ever, it is crucial for Australian universities to produce high quality employable graduates with the necessary skills to navigate the increasingly competitive and turbulent employment market.

Analysing data collected across three QS surveys run in 2019:

We see that many graduates are not meeting the expectations of their employers – evidence of a ‘skills gap’ which could impact graduate employability.

While addressing and reducing the skill gap is crucial and an essential component to maximising graduate employability, there’s a need to first understand the rapidly changing employment landscape.

What is the ‘global skills gap’?

The ‘global skills gap’ refers to a globally-observed discrepancy between the skills expected of graduates by their employers, and those graduates’ capacity to demonstrate them in the workplace.

Why is it important to address?

At least 475 million new jobs need to be created to absorb the 73 million youth that are unemployed. In addition to the challenges from the ‘global skills gap’, competitive markets, technological disruption and globalisation of the workforce are making the job market harder for new graduates to navigate.

Competition is Fierce

With an influx in the number of international students heading to Australia to pursue a higher education, it has become increasingly difficult and competitive to find a job.

Over the last 4 years, Australia has seen a 61% increase in tertiary education enrolments by international students. The number of international students with temporary graduate visas have also increased from 71,000 in June 2018 to 92,000 in June 2019.

However, many of these graduates are not working full-time, and were not necessarily working in their field of study. This doesn’t just apply to international students though. Since the Global Financial Crisis, it has also taken longer for domestic graduates to gain employment.

Technological Advancements

Technology is expected to massively disrupt the nature of employment. According to the Productivity Commission, over 40% of current employment is at risk of being digitally disrupted by automation over the next 10-15 years.

With the rise of artificial intelligence and robotics, these algorithms can eliminate the most mundane tasks, freeing employees to think more strategically. However, the growing ability for machines to think, reason, and intelligently interact with the world has the potential to encroach on jobs of all types.

Many employees are already aware of this threat, and a recent study by Ernst & Young suggests that over a third of Australian employees believe that technology will reduce their job opportunities in the future.

Modern Globalised Workforce

The Australian workforce has become increasingly educated, with the number of bachelor’s degrees growing by 23% between 2011 and 2016, and postgraduate degrees growing by 46%.

With a greater pool of potential employees, there’s also more competition among local applicants. Businesses are also increasingly taking advantage of outsourcing, offshoring and work sponsorships to expand their pool of potential employees as wide as possible.

What next?

In a job market full of challenges, it is imperative that higher education professionals help to address and reduce this issue or risk their graduates being ‘left behind’ or overlooked.

On this count, there is cause for optimism –  Australian Universities perform particularly well in the QS Graduate Employability Rankings, and rival those of any other country in their ability to produce employable graduates.

QS Enrolment Solutions recently undertook research to answer the following key questions and examine the relationship between graduate skills and employer expectations amid today’s uncertain landscape:

  • What skills do international students think employers want?
  • What skills do employers actually wantfrom graduates?
  • Where are graduates of Australian universities falling short?
  • How competitive is Australia at producing employable graduates?

Our key findings will help to provide an in-depth exploration of what skills and behaviours graduates need to develop as well as explore the importance of a symbiotic relationship between employers and universities.

Keep an eye out for our next blog post (late Oct 2019) which will delve into the research findings and provide real facts, practicable insights, and actionable recommendations from our market research team. A detailed whitepaper will also be released in the coming weeks.



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