This article is about graduate employment, unemployment and underemployment. It looks at the development of employability skills inuniversity education as a response to evidence of the unemployment and underemployment of new graduates and assesses the impact of that response. The article then offers another approach to graduate employability based on the behaviour of graduate employers as reflected in data on graduate employment. The approach focuses on the development of students' willingness and ability to learn in employment. The article concludes by showing that this approach can reconcile the development of graduate employability with the traditional concerns of university education and with the preparation of students for lifelong learning. (Contains 2 tables.)