Graduate labour market update: 20 February

From international student destinations and financial returns on HE and FE, to Australian Graduate Outcomes - Charlie Ball covers key recent developments in the labour market

The first quarterly estimate of UK real GDP from the Office for National Statistics (ONS) shows there was no growth in the fourth quarter of 2022.

This means that in technical terms the UK is not currently in recession. In output terms, the services sector slowed to flat output on the quarter driven by falls in the education, and transport and storage sub-sectors. Growth of 0.3% in construction was offset by a 0.2% fall in the production sector in Q4 2022.

The UK employment rate was estimated at 75.6% in October to December 2022, 0.2 percentage points higher than the previous three-month period.

• The increase in employment over the latest three-month period was driven by part-time workers.
  The most timely estimate of payrolled employees for January 2023 shows another monthly increase, up 102,000 on the revised December 2022 figures, to 30.0 million.
• Flows estimates between July to September 2022 and October to December 2022 show that there was a record-high net flow out of economic inactivity, driven by people moving from economic inactivity to employment.
• In November 2022 to January 2023, the estimated number of vacancies fell by 76,000 on the quarter to 1,134,000, the seventh consecutive quarterly fall since May to July 2022. The fall in the number of vacancies reflects uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment.
• Total actual weekly hours worked decreased on the quarter by 2.9 million, and are still below pre-pandemic levels.

The most recent Scottish data is here:

• Over the quarter to December the unemployment rate decreased, while the employment rate increased and the inactivity rate decreased.
• The estimated unemployment rate in Scotland was 3.3%, down 0.5 percentage points since December 2019 to February 2020 (pre- pandemic) and down 0.2 percentage points over the quarter. Scotland's unemployment rate was below the UK rate of 3.7%.
• The estimated employment rate in Scotland was 76.6%, up 1.2 percentage points since pre-pandemic and up 1.3 percentage points over the quarter. Scotland's employment rate was above the UK rate of 75.6%.

Welsh data is here too:

• The Welsh employment rate stood at 71.8%, with 1,435,000 people working in Wales, down 12,000 on the previous quarter.
• 52,000 people were unemployed, down 3,000 on the previous quarter.
• For October to December 2022 the economic inactivity rate for people aged 16 to 64 in Wales was 25.5%, higher than 24.9% in the previous quarter (July to September 2022). This is an increase of 10,000 people to 487,000.

Northern Irish data is here:

• The number of employees receiving pay through HMRC PAYE in Northern Ireland in January 2023 was 785,400, an increase of 0.1% over the month and an increase of 2.0% over the year.
• Earnings from the HMRC PAYE indicated that Northern Irish employees had a median monthly pay of £2,012 in January 2023, an increase of £4 (0.2%) over the month and an increase of £76 (3.9%) over the year.
• In January 2023, the seasonally adjusted number of people on the claimant count was 35,900 (3.8% of the workforce), a decrease of 1.0% from the previous month's revised figure. The January 2023 claimant count remains 20.5% higher than the pre-pandemic count in March 2020.
• There were 260 redundancies confirmed in January 2023, taking the rolling 12-month total to 970. Although this is an increase when compared to recent rolling 12-month totals, it is still one of the lowest 12-month totals in the time series. There were 440 proposed redundancies notified to the Department in January 2023, bringing the rolling 12-month proposed redundancies total to 1,960.

And data for the regions is also available:

• For the three months ending December 2022, the highest employment rate estimate in the UK was in the South West (80.3%) and the lowest was in the North East (71.0%). Scotland (76.6%) saw a record-high employment rate.
• For the three months ending December 2022, the highest unemployment rate estimates in the UK were in the North East and London (4.5%) and the lowest was in the South West (2.1%).
• The East of England had the largest increase in the unemployment rate compared with the same period last year, increasing by 0.5 percentage points, with the North East seeing the largest decrease of 1.1 percentage points.
• For the three months ending December 2022, the highest economic inactivity rate estimate in the UK was in Northern Ireland (26.3%) and the lowest was in the South West (18.0%).
• The number of payrolled employees continued to rise in all regions on the month to January 2023, with the strongest increases in the East of England, London and the South East.

The number of online job ads rose in the week to 11 February:

• The total number of online job adverts increased by 3% on 10 February 2023 compared with the previous week, with growth in 18 of the 28 job categories, falls in six categories, and four remaining unchanged. The 'transport, logistics and warehouse' job category saw the largest increase, growing by 31% in the latest week and was followed by 'other or general' and 'energy or oil and gas' with increases of 7% and 5%, respectively.
• The total number of online job adverts was also 20% lower than the level seen in the equivalent period of 2022.

The ONS have released an analysis of jobs vacancy data from 2017 onwards:

• There were nearly 1.5 million estimated open adverts as a daily average during December 2022, according to ONS analysis of Textkernel data on online job advert volumes.
• Demand for other management, policy, and governance professions, such as project managers and assistant managers, declined by the most adverts between December 2021 and December 2022 (by 58,470 fewer postings). This reflects a 55.9% decline in total UK adverts in that time.
• Almost a quarter of adverts were either looking for healthcare or information and communication technology types of jobs (termed 'professions'). These jobs are almost entirely graduate level. The healthcare profession category had the largest share of adverts, at 12.7% of the total. At the most detailed profession level, the two categories with the largest number of adverts also fell within healthcare. In December 2022, there were 31,870 adverts for support workers and 21,170 adverts for nurses. In December 2022, adverts for healthcare jobs were the most common across the UK, as well as for 88.8% of local authorities. Most of the other 11.2% had higher demand for information and communication technology professions.
• There were a further 9.7% of adverts from information and communication technology professions. At the most detailed profession category within those types of jobs, software engineers had the largest share, with 15,690 adverts, as of December 2022.
• In December 2022, over a third of UK online job adverts were for jobs located in London or the South East. One fifth of jobs were in London (note that this is slightly lower than the proportion of graduates who work in London).
• Outside London, six local authorities (Manchester, Birmingham, Bristol, Leeds, Glasgow, and Liverpool) had the greatest share of online job adverts in December 2022. They also had the highest increase in their share of total adverts over the previous year.

The ONS has also released Census data looking at the qualifications of the workforce:

• 42% of workers or jobseekers in England and Wales had a higher education qualification. In London, the figure was higher, at 57%. This is in line with the data Jisc usually uses for this measure from the Annual Population Survey - and is a timely reminder that most people in the UK have not and will not attend university.
• Outside of London, Wales and the regions of England had similarly qualified labour forces. At a regional level there was no clear north-south divide in qualification levels.

This is a very interesting and highly interactive piece that is well worth exploring.

AGCAS have produced a timely and interesting report on international student destinations:

• Of the 345 survey responses analysed, 85% had a Graduate route visa and 15% had a Skilled Worker visa.
• 63% of respondents had studied a postgraduate taught qualification, 23% an undergraduate degree level and 10% a research postgraduate qualification.
• 60% were employed full-time. But 26% were unemployed at the time of the survey.
• 72% of those employed via the Graduate route were in a professional level job.
• 42% of graduates applied for over 50 roles since leaving university.
• 79% of international graduates received support from their university careers service.
• 58% of international graduates suggested that their expectations of post-study work visas were being met, 18% were undecided, and 24% did not think their expectations were being met.

Lightcast have released a labour market summary for January. Recruitment demand remains strong. There were 1.1 million new postings and 2.9 million active job postings in  January 2023, compared to 920,000 and 2.6 million in December 2022. This represents a year-on-year increase, with new job postings in January 2023 up 15% on January 2022, equating to around 150,000 extra vacancies.

In January, advertised salaries fell, with the median advertised salary for all roles being £31,200, down from just below £33,000 in December 2022. This decline has been driven by a drop in median advertised salaries for graduate and managerial roles, which were down from £40,100 in December to £39,400 in January, whilst non-graduate roles remained largely unchanged at just over £25,000.

The Recruitment & Employment Confederation (REC) has found businesses more cautious in hiring this January:

• Permanent hiring fell again in January but looks to be plateauing. Temporary hiring increased though.
• Candidate supply continued to fall but also shows sign of bottoming out.
• The reduction in permanent staff appointments was broad-based across England, with the Midlands seeing by far the steepest rate of decline.
• Steep increases in temp billings were seen in the North of England and London, while a mild expansion was recorded in the South of England. The Midlands bucked the overall trend and registered a modest fall.
• Rates of vacancy growth in the private sector continued to exceed those seen for the public sector at the start of 2023.The strongest upturn in demand was signalled for private sector permanent staff, while the softest was seen for permanent workers in the public sector.

The CIPD's new Labour Market Outlook is now available:

• The net employment balance - which measures the difference between employers expecting to increase staff levels and those expecting to decrease staff levels in the next three months - remained positive at +28, meaning that employers plan to increase staff numbers in the three months to March 2023. This continues to exceed pre-pandemic levels.
• 57% of employers have hard-to-fill vacancies, and 29% anticipate significant problems in filling hard-to-fill vacancies over the next six months. Existing hard-to-fill vacancies are most common in primary and utilities (82%), healthcare (78%) and education (77%). Of employers with hard-to-fill vacancies, 40% had skills shortage vacancies, whereby applicants for advertised roles lack the technical skills required.
• The top response to addressing hard-to-fill vacancies has been to upskill existing staff (47%), followed by raising pay (43%) and increasing the duties of existing staff (36%). Of those employers who have or plan to raise pay in response to hard-to-fill vacancies, 57% plan to achieve this by raising prices rather than lowering profits and absorbing costs (47%). Redundancy intentions remain low but are increasing slightly.
• 17% of employers are planning to make redundancies in the three months to March 2023. This is still down on pre-pandemic levels, indicating the tightness of the labour market despite uncertain economic circumstances.

The Social Mobility Commission have produced a mammoth report on the financial returns to higher and further education qualifications. This is an interesting and thoughtful paper (to give you an idea of the care that has gone into this, there are four pages of caveats about the assumptions, methodology and source data). A very broad summary would be:

• On average, those who study qualifications in HE or FE earn more compared to those who do not.
• This persists even when accounting for an individual's personal characteristics, suggesting that on average studying a qualification in HE or FE is associated with a positive value-add in earnings.
• In FE, studying a qualification higher than someone's current level is associated with higher future earnings. This may imply that working your way up the FE qualification ladder can boost earnings.
• In HE, there is a lot of variation in value-add across subjects, with science, technology, engineering, and maths (STEM) subjects, law and economics generally being associated with higher earnings. In FE, it is harder to draw conclusions, but subjects such as business administration and engineering have a high value-add for women and men respectively.
• In HE, students from disadvantaged backgrounds are disproportionately less likely to attend universities or study subjects associated with higher earnings when compared to their wealthier peers with similar grades.
• There is little very new or surprising in the report but it is valuable as a summary of current thinking on the topic and as a nuanced and balanced discussion of the pros and cons of this approach towards the value of education.
• The Irish HEA published a report on the findings of graduate outcomes by socio-economic group:
• Overall, almost one in five graduates from the class of 2020 were from affluent backgrounds while fewer than one in ten were from disadvantaged backgrounds.
• On average female graduates were less affluent than males, albeit the gap was relatively small between the two groups (2.1 versus 2.5). This holds true for those graduating with an undergraduate and a postgraduate degree.
• One in four social sciences, journalism and information graduates were from affluent backgrounds. In contrast, there was an equal proportion of services graduates from disadvantaged/marginally below average backgrounds as there was from affluent/marginally above average backgrounds. At 14%, services had the highest share of graduates from disadvantaged backgrounds.
• Overall, 67% of graduates were in full-time employment nine months after graduation with a further 6% in part-time employment. Little variation between DIS groups in terms of employment levels is observed. At 17%, affluent graduates have the highest proportion pursuing further studies, compared to 15% across all DIS groups and just 13% for disadvantaged graduates - this gap is smaller than in the UK . Disadvantaged graduates report the largest share of unemployed graduates (9%), while affluent graduates report the lowest share (6%) - similar to the situation in the UK.
• Human Health and Social Work Activities was the largest sector of employment (17%) followed by Education (16%) and Financial, Insurance and Real Estate Activities (13%). A relatively large proportion of affluent graduate's work in Financial, Insurance and Real Estate Activities (17%) and ICT (9%) compared to the overall average.
• 56% of working graduates reported working in professional occupations (rather lower than in the UK). The share of affluent graduates working in professional occupations was largest at 60% and lowest for disadvantaged graduates at 51%.
• This difference is largely explained by the fact that a larger share of disadvantaged graduates work in Sales and Customer Service (10%) and Caring, Leisure and Other Service occupations (7%) than the overall average.

This is a very interesting report, and highlights some interesting similarities and differences between the graduate labour markets in Ireland and the UK.

Graduate Outcomes data is here! Ok, this time it's for Australia - but this is the survey most similar to the UK's and so is of particular interest:

• After declining in 2020, the Australian undergraduate labour market began to stabilise in 2021 and saw continued recovery through 2022, increasing by 9.6 percentage points. Additionally, full-time employment rates have recovered for both postgraduate coursework and postgraduate research graduates, increasing by 4.5 and 7.0 percentage points respectively.
• The gender pay gap remains, particularly for postgraduate coursework, although it is less pronounced for undergraduate and postgraduate research graduate salaries.
• 69% of graduates were working in a professional level occupation (similar to the UK figures) - this is up slightly on last year.
• The proportion of undergraduates working in a job not fully utilising their skills or education declined by one percentage point between 2021 and 2022 to 28.3%.
• The proportion of undergraduates reporting their course prepared them 'well' or 'very well' for their current job in 2022 was comparable to 2021 at 74.8%.
• In 2022, undergraduate further study rates decreased by 2.5 percentage points to 18.6%, suggesting that, like the UK, these rates decline as the jobs market improves.
• Results for postgraduate coursework and research graduates remained stable.

And HESA have been examining parental education data in our statistics. This is a great look at some very useful data, well worth a read for an interesting set of insights into a knotty data question.

Written by

Charlie Ball

Head of labour market intelligence

Jisc