HR experts react to government plans to defund ‘rip-off’ degrees

Earlier this week, the government announced a possible cap on the number of students who study so-called “rip-off” university degrees that it claims are leaving some students dissatisfied.

Under the plans, the Office for Students (OfS) will restrict the number of students joining courses that do not lead to what it terms “good jobs”. Some foundational courses, including business, will also be reduced by just under £4,000 per year.

The government claims this will help young people choose an alternative path “that is right for them”, such as an apprenticeship. Opponents argue the measures could suppress social mobility by limiting the number of employees coming from diverse academic backgrounds.

Below, we hear from hiring experts to examine what the plans might mean for the UK labour market.

What is a rip-off degree?

Whitehall has steered clear of actually naming the degree courses that, in their view, are leaving students short-changed. However, it’s likely the limits will be imposed on courses that have high dropout rates, or a low proportion of new graduates entering the workforce.

According to the latest data from the Higher Education Statistics Agency (HESA), there were four degree types where fewer than half of graduates from the academic year 2020/21 had entered full-time employment after leaving university. These were:

In terms of ‘high-value’ degrees, data from the LEO suggested that medicine and dentistry graduates had a median graduate earning of £52,900 five years after leaving university. Performing arts stood at £21,200.

HESA data from March 2019 also revealed the five courses with the highest non-continuation rate among first degree entrants:

• Computer science: 9.8%
• Business and administrative studies: 7.4%
• Engineering and technology: 7.2%
• Mass communications and documentation: 7.2%
• Creative arts & design: 7.2%

In comparison, medicine and dentistry and veterinary science students had the lowest non-continuation rate at 1.5%.

In a government press release, Prime Minister Rishi Sunak said: “Too many young people are being sold a false dream and end up doing a poor quality course at the taxpayers’ expense that doesn’t offer the prospect of a decent job at the end.

“That is why we are taking action to crack down on rip-off university courses [and] help more young people to choose the path that is right to help them reach their potential.”

“Differing perspectives and values are vital to business”

For now, it remains unclear what the cap on student numbers will look like in practice – or how the policy will differ from existing legislation.

Universities already face fines from the OFS if not enough students are in graduate jobs 15 months after finishing their degree.

Based on the HESA data, it appears that the government’s clampdown on ‘rip-off’ degrees is a calculated attempt to shift students towards subjects that are STEM (Scientific, Technical, Engineering, or Mathematical).

The UK has set itself a target of becoming a “science and technology superpower by 2030”. By capping the number of students who can enter sectors like the creative arts, the government is essentially prioritising STEM courses. These, they claim, will develop the skills necessary to support productivity and economic growth.

Undoubtedly, UK companies are struggling to source STEM-skilled workers. Rapid technological advancement post-COVID, such as the emergence of AI, has helped to widen the gap between the digital roles being advertised, and the current workforce’s abilities.

Many SMEs report that the digital skills gap is now threatening their growth plans. But will narrowing down the number of available spots on a course really make the industry less appealing to a young person looking to study at university?

Amy Foster says no. Foster, who is chief talent officer and partner at business consultancy firm, Rockborne, praises the government’s intention to improve the quality of degrees. However, she argues scrapping courses is not the solution.

“Non-STEM graduates have a huge amount to offer, particularly to the tech sector,” she states. “Consider the core skills needed to be a data or tech professional and these will be covered in other degrees, such as humanities.”

It’s certainly true that a STEM degree isn’t necessary to succeed in the business world. In 2018, a British Academy Project found that 58% of CEOs from FTSE 100 companies had studied arts, humanities and social subjects. 19% of these businesses are also STEM.

In Foster’s view, lowering the number of graduates from arts-based degrees might therefore lead to a homogenised workforce, where individual strengths and potential is unrealised. “Differing perspectives and values are vital to the success of a business,” she affirms.

What is the soft skills gap?

Kirsty Barden is Head of Business Development at Management Development Services, the UK’s foremost provider of management training for the food industry. Barden is concerned that the government proposals will only make it more difficult for companies to recruit talent.

“In the last 37 years, we’ve seen graduates from diverse disciplines like music production, anthropology, and even fashion thrive in the agri-food sector,” Barden tells Startups. “Reducing these courses may limit the breadth and diversity of skills entering our industry.”

Rather than fixing the talent shortage, diverting young people towards identical career paths could therefore end up creating another skills-related challenge for SMEs to combat: the soft skills gap.

Soft skills are personal attributes. They come from a person’s experience and background, making them much harder to teach than technical, role-specific skills.

Shortages of soft skills is already a very real obstacle for today’s companies. A recent survey of 1,000 UK business owners found that, on average, employers regret making three hires a year due to the number of ill-trained new recruits entering the workforce.

According to the report, 50% identified poor communication and team working as the most common characteristics they saw in a bad hire.

University isn’t just about getting good grades in certain subjects. Important soft skills gained while studying include networking, time management, and collaboration – all of which are abilities that can be essential during a person’s career.

“It’s common to base hiring decisions on which university someone went to or if they studied a particular subject,” says Foster. “But history has taught us that the best employees will not all come from the same background.

“By keeping an open mind about the subjects that applicants have studied at university, and instead focussing on the skills they’ve developed or the value a candidate can bring, organisations are likely to gain a greater range of experiences and perspectives.”

“Providing new pathways into the workforce”

Alongside the potential problems, the proposals also present an opportunity for businesses to reevaluate their recruitment strategy. By assessing their new hire checklist, bosses can ask whether hiring managers might overemphasise a degree during the hiring process.

In the past, big name employers including the civil service have traditionally specified that applicants needed a 2.1 degree from a Russell Group university to work at the organisation.

Sadly, the practice persists. Research from Multiverse shows that the majority of respondents still ask job seekers to list a degree on applications. That’s despite the same report finding that 70% of leaders think uni leavers are underprepared for the workforce.

Still, there are signs the sands are shifting. Earlier this year, PwC scrapped demands for a 2:1 degree from applicants. Is this a sign that recruiters are rejecting the idea of a degree as a passport into corporate work?

As well as curbing the number of spots open on low-value courses, the government also intends to lower the maximum fee that universities can charge for classroom-based, foundation courses from £9,250 to £5,760.

Brendan Wincott is managing director of Guardian Support, an HR consultancy firm. Wincott hopes that these plans will help to open up new routes into the workforce for young people.

“These plans are about removing courses that saddle students with debt, and instead providing genuine pathways into work,” he assesses. “Recruitment could be positively affected.”

Positive news for apprenticeships

Wincott specifically points to an upswing in apprenticeships as a potential positive outcome under the government’s plans. Data indicates that apprentices have contributed over half a billion pounds in cost savings for SMEs.

Largely, this is due to lowered staff turnover. 93% of trainees remain at a company once qualified, on average, saving thousands in avoided hiring and onboarding fees.

Apprenticeship schemes can hardly be labelled ‘low-value’. Those who finish a degree (which take three to six years to complete, depending on the course level) receive a qualification equivalent to a full undergraduate or master’s degree.

This learning can be tailored to plug relevant skills and knowledge gaps within the business. Such bespoke training also simplifies the talent pipeline in businesses, like succession planning.

Plus, trainees – regardless of whether their course is STEM or arts-based – will be earning money for the time and effort put into training, fixing the problem of young people feeling swindled by hefty university tuition fees.

Foster reveals that Rockborne has seen a vast increase in the diversity of people applying to its training programme, “simply by looking for raw talent and ensuring that our application process is not unnecessarily exhaustive.

“Businesses should take an open-minded approach to recruitment, by making room for other disciplines instead of restricting options,” she advises.

There are many benefits to taking on an apprentice. Learn how to navigate the process of finding, employing and managing an apprentice trainee in our full guide.