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As graduate numbers grow, a hard truth: Not all degrees are equal

TODAY reports: Anecdotal evidence from interviews with graduates and human resource experts shows that even though large numbers of graduates are able to land jobs, some are underemployed, be it by choice or circumstance.

SINGAPORE: After graduating with a second-class upper degree in human resource management, Mr Tan, 30, took some time to land a full-time job and he is currently doing administrative work - buying office supplies and processing claims. “I wished that we were taught more skills in university instead,” he said.

Another graduate, Mr Tang, 27, who has a chemistry degree, has been working in an admin support temporary position for the past 18 months. “Unlike our parents’ time, it seems like there are many people holding a degree now but the fact is there are many jobs out there that do not require a degree holder to do the work.”

On the other hand, there are graduates who have, by their own volition, ventured into careers that have little to do with what they had studied for in university. A PhD holder in biomedical sciences, Dr Christopher Yang, was a research fellow at the National University of Singapore’s Yong Loo Lin School of Medicine when he made the switch into the financial sector four years ago.

The 41-year-old said his biomedical career was going well, having received a grant to advance immunology research. But a series of circumstances - including the outlook of the industry, and the birth of his fourth child - led to him making the career switch. “I had to seriously think about my career path and prospects,” said Dr Yang, who is now an accredited financial adviser.

In Asia, Taiwan and South Korea have been experiencing an oversupply of graduates, with double-digit youth unemployment rates. In contrast, Singapore enjoys close to full employment, and more than 80 per cent of graduates from publicly-funded universities and the more-established private institutions are able to find jobs within six months of graduation.

Nevertheless, policymakers are keeping a close eye on the situation. Anecdotal evidence from interviews with graduates and human resource experts shows that even though large numbers of graduates are able to land jobs, some are underemployed, be it by choice or circumstance.

Underemployment occurs when highly-skilled people work in low-paying or low-skilled jobs, as well as when part-time workers prefer to be employed full-time.

Internationally, underemployment is hard to define because of the subjectivity involved — such as a worker’s preference and whether qualifications equate to skills and performance.

In October 1998, following an international conference among labour statisticians, the Organisation for Economic Co-operation and Development decided to adopt “time-related underemployment” as the universal indicator for objective comparison across countries.

Singapore’s Ministry of Manpower (MOM) uses the same indicator, which measures the proportion of part-time workers who desire to work more. Over the years, the overall proportion of underemployed graduates has stayed low, hovering around 2 per cent and reaching a three-year low last year. However, the underemployment rates for the arts as well as community, social and personal services (other than those categorised as health and social services) stood at 9.3 and 6.4 per cent, respectively.

Still, the overall underemployment rate here is significantly lower than in other developed countries. In the United Kingdom, for instance, one in 10 people are considered underemployed as of last year. In the United States, the proportion is 15 per cent as of March.

Last year, then-Manpower Minister Tan Chuan-Jin flagged the issue as one to watch: “While we are not facing the unemployment and underemployment problems in other countries, we will not be immune to these trends … The proportion of degree holders in our workforce has been increasing.”

He added: “The market has begun to differentiate between degrees that carry their full worth in knowledge and skills, and those that are essentially paper qualifications. We should, therefore, encourage our young to pursue their interests and go for substance when considering their education and career paths”.

Agreeing, Mizuho Bank senior economist Vishnu Varathan said that, over time, the situation could be exacerbated by the exit from the workforce of baby boomers holding high-value-added jobs. With economic restructuring and as part of the evolution of the labour market, Mr Varathan said: “Not all of these jobs will be recycled back to the younger generation.”

He noted that while attractive salaries - as a result of the tight labour market - could keep part-time workers content for now, the current level of wages for part-timers might not be sustainable in the long-term.

DIFFICULTIES IN MEASURING UNDEREMPLOYMENT

In order to ensure Singapore keeps a lid on the situation, Nee Soon GRC Member of Parliament Patrick Tay, who is part of the labour movement, has repeatedly raised the issue of underemployment in Parliament.

Speaking to TODAY, he said the Government should re-examine the conceptual definition of underemployment and how it is measured. He suggested conducting a comprehensive survey for the various industry sectors to understand the required worker competencies or skills for specific jobs and whether the people holding these jobs are over-qualified.

“There is currently a lack of data and a survey will help us assess the real extent of the underemployment problem,” he said.

Human resource expert Linda Teo, who is country manager of ManpowerGroup Singapore, also stressed the need to analyse data on the pool of underemployed workers. She said: “Could it be a case where their qualifications are no longer relevant? Or that the affected workers have not upgraded themselves and kept up with the challenges in the industry?”

Nanyang Technological University (NTU) economist Walter Theseira pointed out that underemployment is a growing area of research in many countries, given that the number of people around the world with advanced qualifications is higher than ever before.

But he noted that it would require extensive efforts to conduct a study on what is essentially a grey area. It would involve, for example, looking at each job and its role and getting experts to determine the type of qualifications required. “What do you call the right level of education for a job? Workers can make up for a lack of formal qualifications with experience and other skills, so the right level of education may differ from person to person,” he said.

Mr Varathan agreed that such an endeavour would be fraught with difficulties. Assumptions have to be made, including assuming that qualifications equate to job capabilities, he said. Also, “there is always the possibility that people think they are underpaid for a job”, he quipped.

To better understand the underemployment situation, he proposed using productivity figures alongside unemployment data to determine if the labour force is being tapped to its full potential.

In response to TODAY’s queries, MOM said that due to the subjectivity involved, there was no internationally established method for measuring non-time-related underemployment. Its spokesperson pointed out that MOM also tracks labour utilisation and employment outcomes, and that information on employment by occupation and education qualifications is collated and made available publicly.

Nevertheless, the ministry acknowledged the spike in the number of degree holders here as well as the “increasing access to private educational institutions or alternative routes that offer degrees of varying quality”.

Its spokesperson said: “We need to help individuals equip themselves with the skills needed to take on the quality jobs of today and tomorrow.”

To this end, the SkillsFuture Council, chaired by Deputy Prime Minister Tharman Shanmugaratnam, was launched in September last year to spearhead efforts to develop an integrated system of education, training and career progression for Singaporeans. “Overall, we have to create a culture where workers are motivated and able to continually acquire relevant skills and experience that will help them advance in their careers,” the MOM spokesperson said. “This includes degree holders, who must also take ownership of their individual career and training development throughout their lives.”

EMPLOYEES MUST BE SKILLED IN MULTIPLE DISCIPLINES

The MOM’s labour force report last year showed that the proportion of degree holders rose by 10 percentage points over a decade to 32 per cent last year. In particular, degree holders made up more than half of local workers aged 25 to 39 last year.

The report also showed that degree holders with qualifications in education (0.7 per cent), health sciences (1.7 per cent) and engineering sciences (2.8 per cent) had the lowest unemployment rates as of June last year, and were well below the average for all residents (3.7 per cent).

At the other end, graduates of the fine and applied arts (6.2 per cent), mass communication and information science (6 per cent), and humanities and social sciences (5.3 per cent) had higher unemployment rates than the norm.

Over the past year, Will (not his real name), 29, had sent out more 100 applications, but the sociology undergraduate - who will be graduating this year - has yet to secure a full-time job. He enrolled in a part-time degree course offered by a private university three years ago, spending S$23,000 on fees in a bid to boost his employability. “I thought getting a degree would help me move up the career ladder, but it did not,” he said.

But he is in the minority, though there are concerns among policymakers about students spending much time and effort in getting private degrees, only to realise later that their degrees are irrelevant to the job market.

Graduate unemployment here remains low. As of June last year, the graduate unemployment rate was 3.9 per cent, marginally up from 3.6 per cent in 2013.

Human resource experts advised Singaporeans to be more selective in the type of degrees that they pursue. Increasingly, employees have to diversify their skills sets to stay relevant to the labour market, they said.

NTU’s Assistant Professor Theseira noted that while everyone might aim to attain a degree, “not all degrees are created equally”. Mr Varathan pointed to the increasing number of degree holders in regional countries who could provide stiff competition in the job market here. Having working experience alongside qualifications will also start to gain traction among employers, he said.

ManpowerGroup’s Ms Teo urged industries and universities to put in more effort to address misconceptions about unpopular jobs.

“Getting students to explore a wide spectrum of careers and piquing their interest in lesser-known but very viable career alternatives can go a long way in nipping underemployment in the bud,” she said.

Mr Adrian Tan, director of Career Ladder, a career consulting firm, recounted meeting mid-career professionals such as engineers who had to take on entry-level roles after their expertise became obsolete. He said that in the future, employees have to be skilled in multiple disciplines and should find opportunities to apply these new skills even outside of work. “The old career expectation is no longer relevant. You can’t depend on your qualifications and expect your career journey (to be) catered to until your retirement,” he added.

Paradoxically, it is partly this desire to develop himself and pick up new skills that saw Dr Yang take the leap into a second career that has little to do with his degree in biomedical sciences.

He recalled how he had taken a 50 per cent pay cut when he first became a financial adviser and had to pound the streets, approaching strangers as he looked for potential clients. He has few regrets leaving the biomedical sciences industry. Now, he is able to provide for his family and his flexible work schedule allows him to spend more time with his children.

Experts noted that, increasingly, workers - especially younger ones - may opt for jobs for which they are over-qualified, in the name of pursuing their passion, greater work-life balance or other intangibles. For instance, Gen Y employees tend to prefer to work in well-known companies and have “low reliance on monetary benefits”, observed Mr Mark Hall, vice-president of staffing agency Kelly Services.


CORRECTION: An earlier version of this story reported underemployment rates for the social service sector at 6.4 per cent. This is incorrect. The figure refers to underemployment rate for “other community, social and personal services”, which does not include the social services sector. An earlier version of this report also said that the proportion of degree holders grew by more than 10 per cent over a decade. This is incorrect. The proportion grew by 10 percentage points over a decade. TODAY apologises for the errors.