Brexit negotiations and the new US president didn't just lead the news in 2017 - they also had ramifications for the global and UK economies. But what will influence the graduate labour market in 2018?
Brexit
In 2017, graduate recruiters cited Brexit as the biggest issue they faced. A year on it has been downgraded to eighth place.1 However, employers remain concerned about the uncertainty and lack of information surrounding what will happen when Britain exits the European Union (EU) on 19 March 2019.2
As recently as the 9th February, Michael Barnier, the EU's chief Brexit negotiator, reiterated that a transitional period post Brexit is 'not a given'. With this lack of certainty and with many possible outcomes in play, businesses are being forced to prepare for a ‘no deal’ scenario. This often involves moving their headquarters or significant parts of their production line abroad.
Due to the length of time such measures would take to implement, many companies have already begun enacting their no deal scenarios. By the end of March 2018, if there is not greater certainty in the Brexit negotiations, 60.1% of UK businesses will either start or have already started implementing their contingency plans.
Brexit will have a negative impact on the UK economy in 2018. Shortly, we will begin to know how much.
Automation
The impact of automation is growing. The latest UK budget pledged over £75million into artificial intelligence (AI) research and implementation.3 Globally, digital technologies have the potential to add $14.2 trillion to the world economy over the next 15 years.4
We are in the midst of the fourth industrial revolution.
Automation of any form represents opportunity through disruption. With experts saying:
- 9% of jobs across the 21 Organisation for Economic Co-operation and Development (OECD) countries are automatable (OECD, 2016)
- 30% of existing UK jobs could face automation in the next 15 years (PWC, 2017)
- 50% of today's work activities could be automated by 2055 (Mckinsey Global Institute, 2017)
- 57% of jobs in the OECD are susceptible to automation over the next decade or two (Frey and Osborne, 2013).
Whilst we do not yet know the extent of this disruption, what these experts agree on is that it will occur.
Every industry will be subject to change. However, some industries will feel it more than others. Manufacturing, which employed 4.5% of new graduates last year, is particularly susceptible.5
Automation should improve wages and create new job opportunities. However, it will do so at a cost. Adzuna found that the primary cause of decline in 13 of the 20 fastest declining occupations was automation.6
Graduates must work with their university to develop the skills needed to stay afloat amid this sea of industrial disruption.
Soft skill shortages
There is both a technical and soft skill shortage in the graduate labour market. The PWC Annual Global CEO 2017 survey shows that 38% of CEOs were 'extremely concerned' about their ability to find people with key skills, up seven percentage points from last year.7
Looking specifically at graduates, there are severe soft skill shortages. The 2017 ISE Annual Survey shows that only:
- 4% of graduates were capable of managing up
- 10% were capable of dealing with conflict
- 11% were capable of negotiating/influencing
- 15% possessed commercial awareness
- 20% were capable of business communication
- 29% were self-aware.
In an evolving economy, graduates will not always have the technical skills required of them, so it is vital that they have the requisite soft skills that enable them to tackle a variety of challenges and upskill.
With automation expected to play a leading role in business development, it is also pivotal that graduates are trained to fill the gaps that technology cannot. Robots can't train entry-level employees or manage individuals on a personal basis.8
With this in mind, graduates must not lose sight of their interpersonal skills in their pursuit of technical knowledge.
Graduate job-seeking behaviour
There has been a marked increase in the number of graduates finding a job via either university resources or recruitment services in the last four years, the Destination of Leavers from Higher Education (DLHE) survey 2017 shows.9
Graduates are taking advantage of the resources available to them, but they are being selective in what they use. There has been almost no change in the percentage of graduates finding jobs through employers' websites.
Of all the methods used by graduates to find jobs, newspapers and magazines experienced the greatest percentage point fall over this four-year period.
The response with the second biggest drop was 'already worked there'. This, combined with a more proactive approach by graduates, suggests that they are increasingly unlikely to accept the first offer that they receive.
Graduates are instead leveraging their work experience to secure other roles. The recent Institute of Student Employers (ISE) report could also be evidence of this, having found that 15% of graduate job offers are either declined or reneged on.10
For more information, see how graduates look for jobs.
Notes
1 The ISE 2017 Annual Survey, ISE, 2017.
2 How businesses are preparing for Brexit, CBI, 2018.
3 Autumn Budget 2017, HM Treasury, 2017.
4 The Growth Game-Changer: How the Industrial Internet of Things can drive progress and prosperity, Accenture, 2015.
5 Will robots steal our jobs? The potential impact of automation on the UK and other major economies, PWC, 2017; The future of employment: how susceptible are jobs to computerisation?, Carl Benedikt Frey and Michael A. Osbourne, 2013; Made Smarter Review, Department for Business, Energy & Industrial Strategy, 2017; DLHE, 2017.
6 The Start of the Curve: Quantifying the impact of job automation, Adzuna, 2017.
7 PwC 21st Annual Global CEO survey, PwC, 2018.
8 Why Soft Skills Will Help You Get The Job And The Promotion, Forbes, 2017; The Soft Skills Job Seekers Need Now, iCIMS, 2017.
9 Destinations of Leavers from Higher Education (DLHE) 2015/16, HESA, 2017.
10 The ISE 2017 Annual Survey, ISE, 2017.
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