Students are struggling financially. A 2022 survey from the Office for National Statistics found that half of students in England felt they were facing financial difficulties, and that one-quarter of students had borrowed more to cope with the cost of living crisis. In England, tuition fees for bachelor’s programmes are the highest among OECD countries.
In addition to the financial burden of a degree, students have to deal with stress about getting a job in the competitive labour market and the prospects for their future career. A report on the graduate job market found that in 2022, there were an average of 39 applications for each graduate-level vacancy.
A 2021 survey of young people found that over one-third felt uncertain about their career plans. University students found a lack of work experience to be a key obstacle in applying for jobs and close to one in two university students didn’t feel prepared for getting a job.
Working during a university degree is one way of both gaining work experience and some much-needed cash. But while many students might opt for a part-time job alongside their studies, this work experience is unlikely to be related to students’ studies or career aspirations, as it typically covers students’ short-term needs.
But a work placement – a period of employment in a relevant industry in the middle of a university course – can offer significant benefits, including finding a job aligned with their career goals after graduation.
Many UK universities offer the option between a standard three-year programme and a four-year programme with a work placement – known as a “sandwich” degree. Students who undertake a work placement complete the first two years of their programme, and spend their third year working in a relevant industry before completing their degree in the fourth year. This option gives students the opportunity to gain full-time and typically paid work experience with an organisation.
Because work placements are part of a degree programme, universities help students find an appropriate placement. Support is available from the universities’ careers services, offering advice that helps students search for the right employer and apply for jobs.
The placement year extends a student’s time at university, but they pay a reduced tuition fee for the year they are on work placement: around 20% of the standard annual fee (£1,850 for a standard fee of £9,250). And the income can make a significant difference to student finances. Our research found that the average salary for economics placements is £19,000, and there are placements that offer more than £30,000.
Students on placements develop transferable skills, such as communication, teamwork and time management, as well as industry knowledge. This may help improve their final-year academic performance when they return to study.
Benefits after graduation
Students who take a placement year also develop a professional network and obtain valuable information from employers about future jobs. This can boost their graduate employability and career success by increasing the chances of finding graduate jobs that fit their career plans. Our research found that economics graduates who did a placement were more likely to find a job that aligned with their career aspirations than graduates who did not do a placement.
There may also be earnings implications after graduation. Earlier research has shown that placement graduates in full-time employment earn on average £2,000 more than non-placement graduates. But there is substantial variation across degree subjects, for example, our recent research has shown that this value is approximately £1,300 for economics graduates. But placement students need a few years to be financially better off than non-placement graduates, as they postpone entering the graduate labour market by one year.
Despite these benefits, some students may not see a placement as a viable option. They may face pressure to finish their degree, and the extra income may not be enough to assuage their financial concerns.
Students who struggle financially are likely to take a part-time job during their studies to address their immediate needs – and the prospect of a third-year placement is unlikely to change this. Research has shown that term-time work has a negative effect on academic performance – and the impact is greater the more hours a student works.
However, working and possibly saving during a placement year could take the pressure off in the crucial final year, allowing students to focus more on their studies.
Author Bios: Panagiotis Arsenis is a Senior Lecturer in Economics at the University of Surrey and Miguel Flores is an Assistant Professor in Economics at the National College of Ireland