High percentages of students in their final year of study are planning to seek employment in industries where there are already too many workers and not enough jobs.
The Government says their expectations need to be adjusted if we want to avoid growing the demand for skilled workers in areas such as engineering and IT.
Direction shouldn't be left up to the "all-knowing career advisers" to influence students and their families, according to the Minister for Tertiary Education, skills and employment, Steven Joyce.
The Graduate Longitudinal Study asked students from New Zealand's eight universities what areas they would seek employment in if doing so within the next two years.
The top two industries were education and training, 21.9 per cent, and health care and medical, 16 per cent - areas where there is a strong demand for skilled workers, according to Immigration New Zealand's Long Term Skill Shortage List.
But also in the top 10 were marketing and communications, 8.8 per cent, environment and conservation, 7.5 per cent, community services and development, 7.4 per cent, and the arts, 6.8 per cent - fields where there is an abundance of talent but not enough jobs. "We have to adjust some of those expectations and aspirations," Mr Joyce said.
"Frankly, that's not just a Government thing, that's a societal thing."
Engineering, an area crying out for more workers as Christchurch undergoes a city rebuild and other regions undergo major projects, only had 4.4 per cent interest.
IT, hospitality, farming and transport also sparked lesser interest but were industries featured on the Government skills shortage list.
Professor Richie Poulton, lead researcher on the study, said the same students would be surveyed next year - two years after graduation - to see whether they were employed in their field of study. They would be followed up in five and 10 years' time.
The study replaced data collected by Universities New Zealand - Te Pokai Tara - which is responsible for university programmes - after it stopped collecting employment outcomes for recent graduates in 2008 because of low response rates.
It is carried out by the National Centre for Lifecourse Research, a multi-university group headquartered at the University of Otago, and commissioned by Universities NZ with funding from the Government's Tertiary Education Commission.
Most universities spoken to by the Herald said they did not hold data on student employment outcomes after graduation.
But the Auckland University of Technology said it had been conducting its own survey since the 2008 information stopped being collected. Bachelors programmes with employment rates of more than 88 per cent six months after graduation included business, education, hospitality management, communication studies, midwifery, oral health, podiatry, nursing, physiotherapy, health science and occupational therapy. All respondents that qualified with a doctorate, Master of Business Administration or Master of Philosophy were employed.
Mr Joyce said the Ministry of Education was gathering information from Inland Revenue on salaries post-study and matching it with figures from tertiary institutions to measure graduate outcomes.
"I think we can do that at a discipline level across the country and I think we can also do it at an institution by institution level which will give us a signal of how well people are turning their education at that institution into income."
It would be used to help guide decisions students made on career choices. Students should be targeted from age 14 when they were first starting to think seriously about their career, rather than at school-leaving age, Mr Joyce said.
The Ministry is also reviewing careers advice given to high school students. In an Education Review Office investigation, the approach of 44 secondary schools to careers, information, advice, guidance and education - known as CIAGE - was examined in 44 secondary schools. Just four were found to have "high quality approaches".
"There is potential danger that we've left it too much to the all-knowing careers adviser at school to be the single influence, or the main influence around students and their families," Mr Joyce said.
"So we need to change that."
Business owners needed to take initiative and investigate how they can steer school leavers toward careers in their industry, he said.
"I've certainly said to industry players 'You need to think about how you can take a role in where kids are going. You're the best place to tell young people what the opportunities are and how exciting your businesses are and you've got the most to gain from it, so don't stand back'."
A number of businesses were already working with universities to tailor their courses so students had the right skills to walk into a career within their industry.
Wellington special effects and prop company Weta Workshop, famed for it's work with the Lord of the Rings trilogy, and game developer Sidhe were working with Victoria University around it's digital design course.
Fisher & Paykel Healthcare were working with Auckland University on its degree for the development of medical devices and technologies.
The Natural History Unit in Dunedin worked with Otago University to design courses to get graduates into the NHU and software company Orion Health was working with Canterbury University around IT. Industry body DairyNZ was touring provincial primary schools speaking to pupils about careers in the agricultural sector.
Mr Joyce said: "It's not just 'We need more of your graduates'. But also 'Are we shaping the degrees and the post-grads to actually be able to walk in work-ready to some of these employers that need a pipeline of stuff coming though."'
He had talked to about 200 businesses over the past nine months and the IT and engineering industries stood out as sectors in need of workers.
After the technology bubble burst in 2000, there was a decline in student numbers and the sector never fully recovered, he said.
Anne Taylor, from the Careers and Transition Education Association, which supports careers advisers in schools, said partnerships had been getting stronger through the Government's Gateway programme which allows students in years 11, 12 and 13 to carry out workplace learning while continuing their education.
"I believe it's a partnership and we need to have really clear communication between all those areas to help guide our young people, and we need to do that with the support of our local community industry people and our families. We definitely need to be big pictures stuff."
She refuted Mr Joyce's comment about careers advisers.
"I think we need to be positive, I wouldn't comment on something that he's said that could be negative at all.
"It's probably an off-the-cuff comment I wouldn't give the time of day to. I think what's happening is very positive out there."
She encouraged students considering fields of study that didn't always translate into jobs to do their research.
"I say to students 'Have plan A and plan B. Live your dream, but there's a reality check as well ... Why not push your boundaries and go for both? Extend yourself and do as much as you can and then you've got more choices. Have a look at the economy. If it's money you're after, is it going to suit your lifestyle? If you can get a job, is that going to give you the lifestyle you want?"'
Associate Professor Jan Crosthwaite, the Dean of the University of Auckland's Faculty of Arts, said arts graduates had many transferable skills. "Studying for a BA degree gives students skills in analysing problems, understanding different perspectives, reasoning to the best solution, and presenting this to others. We focus on giving students the skills to find and assess information, using subjects in which students are interested for their own sake as well.
"Students develop skills that are adaptable to a wide range of vocations."
By contrast, degrees in a specific field often required regular up-skilling, she said. Completing a conjoint degree, such as a BA with a law or commerce degree was becoming increasingly popular.
She said several arts graduates from the university had achieved high levels of success.
Felicity Barnes, a history lecturer in the same department, said the industry should not be ignored by Government when it came to funding. And students should not be discouraged from arts courses.
"It's true there is a lot of emphasis on quite industry-specific sets of skills these days, and arts can seem like a generic degree. But that is the wrong perspective. The world of work is changing very rapidly, and what arts students bring with them is a set of transportable and transferable skills. Critical thinking, analysis, writing ability, presentation skills are needed in most workplaces, and they don't date. And that's what art students learn - along with their specialist knowledge of course.
"And I'd say it's not only workplaces that miss this - though the smart ones don't - but the Government. Underfunding arts sends the wrong message. To compete successfully in the global economy, we need the widest possible skill set. Valuing one sort of knowledge over another will not achieve this. What Government thought, 20 years ago, that film production might be one of our strongest new industries?"