There is much to celebrate in both our university and business sectors, as the Government’s industrial strategy white paper highlights.

We have a Higher Education system of international repute which continues to produce higher-level skills and to deliver a graduate earning premium and, set alongside this, a labour market that continues to create new graduate-level jobs.

And at the intersection, as the State of the Relationship captures so well, our universities and businesses are collaborating in innovative ways and in greater frequency to target skills needs in particular sectors and regions.

The success of these collaborations will generate a highly skilled workforce that can achieve a highly productive economy and public services – the virtuous goal at the heart of the industrial strategy.

The Office for Students, the new Higher Education regulator in England, is named in the industrial strategy and will be expecting universities to build yet more sustained and in-depth collaboration with employers not just to equip students with what they need to succeed in the labour market, but also to create opportunities for mature students, and to help employers capitalise on graduate talent and skills to improve their productivity.

It’s clear from the industrial strategy that there are multiple challenges we need to address if we are going to achieve that virtuous goal and many of them about skills and talent.

Skills challenges

The industrial strategy highlights that technical education is an underused and undervalued part of our skills system – perhaps our missing link to greater productivity. With reforms to the apprenticeship system ongoing and T-levels set to be introduced from 2020, the OfS aims to enable a genuinely informed choice of academic and technical routes into HE for students from all backgrounds and at different points in their lives.

Despite many targeted interventions over several years, some STEM skills remain an acute challenge for businesses to recruit. The Wakeham and Shadbolt reviews, commissioned by the Government in 2015 to examine graduate employability in STEM subjects, highlighted how graduates from those disciplines associated with the fastest rate of technological change face the greatest obstacles to employment.

Demand for STEM-related occupations is projected to grow at double the rate of other sectors, and a lack of diversity throughout the STEM talent pipeline risks exacerbating skills shortages. This is an issue that the HE sector as employers also needs to confront.

The OfS will be working with UKRI throughout this year to determine the priorities for the research talent pipeline and how we improve equality and diversity in the research workforce today, and in the future.

Add to this a fundamental shift in the world of work and the nature of the labour market, driven by the fourth industrial revolution and influenced by Britain’s imminent exit from the EU, and there is clearly more to understand and more to do.

Talent solutions

These challenges – spanning provision, sector and place – increasingly call upon collaborative solutions, with universities, businesses and others working in partnership to create effective talent pipelines.

The post-18 education and funding review is shining a light on the importance of flexibility and choice for both learners and employers. There are good examples of provision that is more responsive to learner needs and employer requirements with the expansion of higher and degree apprenticeships, accelerated degrees, new models of placement provision and work-based learning. This close collaborative working between HE providers and employers also has positive effects on mainstream teaching provision and knowledge exchange.

Other sector-specific collaborations focus on bringing together established providers and employers. The Institute of Coding launched this year – a national consortium of more than 25 universities, 60 national and international businesses, SMEs and others led by the University of Bath – aiming to use innovative, industry-focused higher education models to rapidly drive up digital skills for upskillers, apprentices and traditional students.

Positive outcomes

The first objective for OfS, as set out in the Regulatory Framework, is that all students from all backgrounds should be supported to access, succeed in and progress from HE, particularly the most disadvantaged. Students value their experience of higher education in its own terms, but they also want it to be a route into highly skilled and rewarding jobs.

In practice we have some distance to go if we are to achieve this. Employment prospects are affected by where and what you study and how you perform, but they are also affected by the time, resources and contacts needed to gain the experience and know-how you need to navigate the jobs market. For students from the most underrepresented group, the proportion of graduates entering professional jobs is five percentage points lower than expected given their qualifications.

Everyone should have the opportunity to build a good life for themselves and unlock their potential, regardless of their background or where they live. We are paying close attention to regional disparities in education and skills levels and we want a clearer picture of the interplay between regional employer demand for graduates, graduate mobility and graduate outcomes.

Graduate mobility is often far more limited than many people perceive. Only 18% of 2017’s graduates moved away to study and then moved again for their first employment, and this challenges the perception that most graduates are highly mobile. The brunt of this is being felt by employers with unfilled graduate vacancies in certain locations.

The OfS business plan acknowledges all of these challenges and identifies the areas for immediate action. We are looking to meet these challenges with solutions based on provision, sector and place, and the industrial strategy calls for the OfS to encourage even greater collaboration between universities and business.

Whether you are an employer or part of the higher education system, it seems clear that combining our efforts on skills and talent challenges is the right step forward – and not just to achieve our respective ambitions, but also, to make a positive move towards closing the skills gap and national prosperity.


Nicola Turner is Head of Skills for the Office for Students

This article first appeared in the 2018 State of the Relationship report, commissioned by Research England and compiled and published by NCUB.