Graduate labour market update: a long view of the pandemic effect

Charlie Ball takes an in-depth look at a study of the impact of COVID-19 on educational inequality, wellbeing and social mobility, before providing a summary of the latest developments in the UK labour market

Data has been released from the second wave of the COSMO study. COSMO is a national youth cohort study which is examining the short, medium and long-term impacts of the pandemic on educational inequality, wellbeing and social mobility. The first wave was funded by UK Research and Innovation (UKRI) as part of its COVID-19 rapid response fund, and the second wave is funded by the UKRI Economic and Social Research Council.

The first wave of the study, which started in autumn 2021, recruited a representative sample of over 13,000 young people across England who were due to take their GCSEs in 2021, asking them about their experiences of the pandemic, as well as their future hopes and plans. The study will follow them through the rest of their education and into the workplace. Wave two of the study launched in October 2022, when the cohort was in Year 13, or equivalent.

The Sutton Trust have a Youth Panel, a group of students from across the country who were in year 10 at the start of the pandemic, and who are applicants to Sutton Trust programmes who have faced disadvantages and barriers of various kinds.

The COSMO cohort's plans for higher education is one of the focuses of this analysis.

In a direct comparison with the Next Steps cohort, a previous longitudinal study group who completed their A levels in 2008, the COSMO cohort at the same age is over ten percentage points more likely to have applied to or be considering applying to university, with 68% from COSMO versus 57% from Next Steps.

Socio-economic background plays a role in university aspirations. Those facing disadvantages are less likely to have applied or intend to apply to university. Working-class families show lower rates of application compared to families with managerial or professional backgrounds (57% vs 77%). Additionally, families who used a food bank in the last year were 21 percentage points less likely to have applied or expect to apply to university (48% vs 69% for non-food bank users).

Those from families who used a food bank in the last year were 13 percentage points less likely to list a Russell Group institution as their preferred university to attend (37% vs 50% for those from families that had not used a food bank). Those who were privately educated were much more likely to want to go to a Russell Group university, compared to those who attended a state school or college (80% compared to 46%).

Differences are also observed among students attending different types of post-16 institutions. Privately educated students are more likely to have applied to or plan to apply to university, with a 96% rate, in contrast to a 74% rate for those from state schools or colleges.

73% agreed that getting a degree leads to better-paid jobs later in life, less than half (48%) viewed taking up student loans to go to university as a good investment.

These attitudes varied by young people's socio-economic background. Compared to those from working class families, young people with professional and managerial parents were more likely to say that doing a degree leads to better paid jobs (80% vs 71%) and taking up student loans to go to university is a good investment (55% vs 43%).

Unsurprisingly, young people who held positive attitudes on the value of HE were more likely either to have applied to or plan to apply to university, compared to their peers who held negative views or stated that they did not know. For example, young people who view student loans as a good investment were more likely to either have applied to or plan to apply to university, compared to those who disagree on this (85% vs 46%) and those who said they don't know (62%).

Among young people in the COSMO cohort who have applied to or intend to apply to university, 20% are planning to live at home during term time if they are accepted into their preferred university. An additional 14% of this group have not yet made a decision regarding their living arrangements.

For those planning to live at home, their reasons vary. 46% state that their primary motivation is to stay close to their families. Around 19% cite proximity to their preferred university as the main reason, while a similar percentage (18%) mention financial constraints preventing them from living away from home.

Those who attended a state school or college were 17 percentage points more likely to plan to live at home when they go to university, compared to their privately educated peers (21% vs 4%).

The decision to live at home is influenced by financial challenges. Young people from families that have used a food bank in the past year are more likely to plan on living at home (31% compared to 19% for those who haven't used a food bank). Similarly, those from families that are behind on housing payments are also more likely to plan on living at home (33% compared to 17%).

When asked about their reasons for not wanting to apply to HE, more than one-fifth (22%) stated that they did not intend to apply to university because they could not afford to go. This proportion is higher for some groups than others, with differences especially by family background.

Young people from working class families were eight percentage points more likely to report this reason, compared to those with professional and managerial parents (27% vs 19%). The gap is larger still by whether young people's families have suffered from food poverty in the past year. Those from families who had used a food bank in the that time were 20 percentage points more likely to report not being able to afford to go as a barrier to applying, compared to those from families who had not (39% vs 19%).

Alongside this, there are also qualitative findings from the Sutton Trust's panel, in the Stories From The Class of 23 report:

• The major areas in which socio-economic background drove differences in young people's experiences were the quality of and access to education. Quality was defined by staff turnover, lack of teachers and generally poor quality of (online) teaching, whereas access to education was limited or enabled on the basis of technological access.
• Differences in socio-economic backgrounds were also associated with a varying consistency of motivation and the varying degree in the perceived importance of hard work.
• Experiences of the COVID pandemic were mainly shaped by the quality of and access to education, as well as differences between state and private education.
• Regardless of socio-economic background, young high attainers also shared similarities such as the importance of relationships with parents, teachers and friends as well as an intrinsic motivation to perform well at school.
• They also shared the importance of disruptive life events such as COVID-19 or experiences of bullying and its detrimental effect on motivation, mental health & wellbeing.
• Inequalities stemming from (mental) health, sexuality, gender or race could be intertwined or go across socio-economic backgrounds.
• Across socio-economic backgrounds, high attainers were guided by their personal interests in their future plans.

New data on homeworking

In late July 2023, 21% of businesses reported that they were using, or intending to use, increased homeworking as a permanent business model, data from the Office for National Statistics showed. This has remained broadly stable since late March 2023, although appears to be ticking up slightly since a low in May. Reduced overheads were reported as the main reason for using this model, at 51%, followed closely by improved staff well-being (47%) and increased productivity (42%). The next most cited main reason was 'reduced carbon emissions', at 32% of businesses.

However, when all reasons (not just the main reason) were cited, 78% said homeworking improved staff wellbeing, 48% said it provided benefits in terms of being able to recruit more widely within the UK (this reason is more important outside London), 43% said improved productivity and 34% said reduced carbon emissions.

Businesses who did not intend to introduce increased homeworking mainly said it was not appropriate for them (77%), with 21% saying it had a negative impact on working culture and another 21% saying it was difficult to manage staff remotely.

Meanwhile, ACAS have found that cost of living pressures have led to increasing homeworking. 36% of employers stated that they'd seen increased homeworking amongst their employees compared to last year.

Qualification levels by industry

There was a very interesting data release from the Census on the level of qualification in different industries and by geography. A lot has been written about this already - here's David Kernohan's take at Wonkhe, which I don't propose to replicate. But there's a lot in this data that could be useful:

• Each sector was issued with a qualification index score, representing the spread of all known qualification levels across all workers in the sector. A higher index score (maximum of 4) indicates the spread is towards the more advanced qualifications, and a lower index score (minimum of 0) shows the spread is towards lower qualification levels. The index score for all workers in the whole of England and Wales is 2.83.
• The sector with the most highly qualified workforce is professional, scientific and technical activities with a score of 3.49, closely followed by the information and communication sector (3.41).
• The professional, scientific and technical activities sector employs a slightly higher proportion of staff with higher education qualifications than the information and communication sector (70.2% compared with 64.8%), though both sectors employ similarly low (approximately 15.0%) proportions of staff with their highest qualification at school level (GCSEs and equivalent) and below.
• These sectors employ similar proportions of their workforce in professional and associate professional roles (60.4% and 63.9% respectively), which are the occupation groups that most commonly require higher qualification levels. The types of employment opportunities for highly qualified staff within these sectors are very different.
• Occupations in computer science (such as programmers and software development professionals) and creative communications and broadcasting (such as arts officers, producers and directors) are common in the information and communication sectors.
• In the professional, scientific and technical activities sector, the two most common occupations for highly qualified staff are in legal (solicitors and lawyers) and accountancy roles. This sector also employs a wide variety of other professions including engineers, veterinarians and research scientists.
• In contrast, the sector that has the lowest qualified workforce is transport and storage, with a score of 2.23, closely followed by agriculture, forestry and fishing (2.28). Both sectors employ similar proportions of their workforce with higher education qualifications (23.5% for transport and storage and 24.0% for agriculture, forestry and fishing) with opportunities for highly qualified staff comparatively limited as these sectors respectively employ only 10.2% and 6.4% of their staff in professional or associate professional roles.
• This approach doesn't just examine what proportion of jobs have degrees or equivalent, but the opportunities available within those sectors and is an interesting lens to look at opportunities.
• The sectors that have a very high variation within them are mining and quarrying, manufacturing, administrative and support service activities, and transport and storage.
• Apart from mining and quarrying, these are all relatively low qualified sectors, which have one or more individual industries within them that employ substantially more highly qualified workers.
• Many of the largest differences between industries within the sectors are a result of an industry employing a much higher proportion of its workers with higher education qualifications (Level 4 and above) than the rest of the sector. For example, 65.8% of workers in the pharmaceutical industry hold higher education qualifications, over double that of the manufacturing sector as a whole (32.4%). In fact, this is higher than for all other sectors except for the professional, scientific and technical activities sector.
• Two other manufacturing industries that employ substantially more highly qualified staff than the sector as a whole are the manufacture of computer, electrical and optical products industry, and the manufacture of other transport equipment. In these industries, 46.0% and 44.3% of their staff respectively hold higher education qualifications. The other transport equipment industry also employs a higher percentage (24.0%) of their staff with Level 3 qualifications (A levels and equivalents) than in the whole of the manufacturing sector (19.0%).
• There are also some great interactive tools, and a section on geographies with a tool that allows you to examine individual sectors across the UK which I heartily recommend.

National Student Survey results

FE Week has analysed the National Student Survey (NSS) and examined the differences between the view of degree apprenticeship students and full-time degree students on the quality of their courses:

• A higher percentage of full-time students gave positive responses on 18 survey questions compared to apprentices.
• A significant gap exists in course organisation satisfaction: 57% of degree apprentices found their courses well-organised, whereas 72.4% of full-time students did.
• Degree apprentices were more critical about communication of course changes, with 65.2% satisfied, while 74.5% of full-time students were content.
• A smaller proportion of degree apprentices (78.2%) found their courses regularly intellectually stimulating, contrasting with 84% of full-time students.
• Degree apprentices were less certain about having the opportunity to deeply explore ideas and concepts. 77.4% of apprentices claimed this compared to 82.6% of full-time students.
• A lower percentage of degree apprentices (56.8%) believed their course feedback was acted upon, whereas 61.8% of full-time students thought the same.
• But apprentices were more complimentary than full-time students when it came to receiving assessment feedback on time, with a five-percentage point gap between their rating of 84.6% and the 79.6% registered by full-time students.
• Degree apprentices were also more satisfied than their full-time counterparts with marking and assessment; 83.5% of degree apprentices said marking and assessment of their course was 'fair' compared to 79.8% cent of full-time students.

Economy and job vacancies overview

Monthly real gross domestic (GDP) is estimated to have grown by 0.5% in June 2023, following a fall of 0.1% in May 2023, figures from the ONS showed.

• A range of businesses cited the additional bank holiday in May as a reason for increased output in June 2023 compared with May 2023.
• Production output grew by 1.8% in June 2023 after a fall of 0.6% in May 2023, unrevised from the previous publication. This sector was the main contributor to the growth in monthly GDP in June.
• The construction sector grew by 1.6% in June 2023, following a fall of 0.3% in May 2023, revised down from a fall of 0.2% in the previous publication.
• Services output was up 0.2% in June 2023, after showing no growth in May 2023, unrevised from the previous publication. Output in consumer-facing services grew by 0.5% in June 2023, following an unrevised fall of 0.2% in May 2023.

The estimate of UK payrolled employees for July 2023 shows a monthly increase, up 97,000 on the revised June 2023 figure, to 30.2 million:

• The unemployment rate for April to June 2023 increased by 0.3 percentage points on the quarter to 4.2%. The increase in unemployment was driven by people unemployed for up to six months, so a move into relatively short term unemployment.
• The economic inactivity rate decreased by 0.1 percentage points on the quarter, to 20.9% in April to June 2023. This was largely driven by those inactive because they are looking after family or home. Meanwhile, those inactive because of long-term sickness increased to a record high.
• Flows estimates show that, between January to March 2023 and April to June 2023, the net movement from employment to economic inactivity was the largest since October to December 2020. This was driven by fewer people moving from economic inactivity into employment. Those moving out of economic inactivity largely moved into unemployment, with the largest net movement from economic inactivity into unemployment since July to September 2020. This suggests it is taking longer for those leaving economic inactivity to find jobs in this period compared with recent periods.
• Job-to-job flows have fallen from their recent peak. While they continue to be driven by resignations and so are voluntary, job-to-job flows because of redundancies have increased to the highest level since October to December 2022.
• The number of full-time employees decreased during the latest quarter but is still above pre-coronavirus pandemic levels. Part-time employees had generally been decreasing since the beginning of 2022, however, they saw an increase during the latest quarter. The number of self-employed workers fell in the first year of the coronavirus pandemic, and both full-time and part-time self-employed workers decreased in the latest quarter.
• Total actual weekly hours worked in the UK have been generally increasing since the relaxation of COVID-19 lockdown measures. In the latest quarter, total actual weekly hours worked decreased by 5.6 million hours to 1.05 billion hours in April to June 2023. This is 5.8 million hours below pre-coronavirus pandemic levels. The decrease in the latest quarter was driven by both men and women. The total weekly hours worked by women is above pre-coronavirus pandemic levels, while the total actual weekly hours worked by men remains below pre-coronavirus pandemic levels.

The number of vacancies in May to July 2023 was 1,020,000, a decrease of 66,000 from February to April 2023:

• In May to July 2023 the number of vacancies fell by 6.0% from the previous quarter, with decreases in 13 of the 18 industry sectors. The industries showing the largest falls were professional, scientific and technical activities and administrative and support service activities which fell by 13.2% and 12.7%, respectively. The sectors showing the strongest growth were real estate activities and electricity, gas, steam and air conditioning supply growing by 17.4% and 11.9% respectively.
• When comparing May to July 2023 with the same time last year, total vacancies decreased by 256,000 (20%). The largest falls were in accommodation and food service activities and professional, scientific and technical activities, which were down by 47,000 and 38,000 respectively. However, despite persistent falls in the number of vacancies over the last year, the total number of vacancies remain 219,000 above January to March 2020 pre-coronavirus levels, with human health and social work activities showing the largest increase, at 46,000.
• In April to June 2023 the number of unemployed people per vacancy was 1.4, up from 1.2 the previous quarter. This is still low by historic standards but is another point of data pointing to a loosening of the labour market.

In May to July 2023, every business size band saw a fall in the number of vacancies when compared with the previous quarter. The chart below shows the number of current vacancies per 100 employees by industry:

Industry,Vacancies per 100 employees
Retail,2.9
Wholesale,2.6
Motor trades,4.3
Total services,3.3
Other service activities,3.8
Arts entertainment and recreation,3.7
Human health and social work activities,4.2
Education,2.5
Public admin and defence compulsory social security,2.7
Administrative and support services activities,2.3
Professional scientific and technical activities,3.4
Real estate activities,2.5
Financial and insurance activities,3.4
Information and communication,3.3
Accommodation and food services activities,5.1
Transport and storage,2.3
Wholesale and retail trade repair of motor vehicles and motor cycles,3
Construction,2.6
Water supply sewarage waste and remediation activities,3.1
Electricity gas steam and air conditioning supply,5
Manufacturing,2.9
Mining and quarrying,3.6
All vacancies,3.2

The latest Scottish data is here:

• The estimated unemployment rate (16 and over) in Scotland was 4.0%, up 0.2 percentage points since December 2019 to February 2020 and up 0.9 percentage points over the quarter. Scotland's unemployment rate was below the UK rate of 4.2%.
• The estimated employment rate in Scotland was 74.2%, down 1.1 percentage points since December 2019 to February 2020 and down 1.1 percentage points over the quarter. Scotland's employment rate was below the UK rate of 75.7%.

Data for Wales is available too:

• The employment rate in Wales was 72.7%. This is up 1.2 percentage points on the quarter and unchanged on the year.
• Early estimates for July 2023 indicate that the number of paid employees in Wales has increased by 4,000 (0.3%) over the month to 1.32 million.
• At a UK level, early estimates for July 2023 showed a monthly increase of 97,200 (0.3%).

Northern Irish data is here:

• The number of employees receiving pay through HMRC PAYE in NI in July 2023 was 793,000, an increase of 0.4% over the month and an increase of 1.9% over the year.
• In July 2023, the seasonally adjusted number of people on the claimant count was 37,000 (3.8% of the workforce), an increase of 1.7% from the previous month's revised figure. The July 2023 claimant count remains 23.8% higher than the pre-pandemic count in March 2020.
• NISRA, acting on behalf of the Department for the Economy, received confirmation that 40 redundancies occurred in July 2023. Over the year August 2022 to July 2023, 1,340 redundancies were confirmed, 11.3% more than in the previous 12 months. There were 250 proposed redundancies in July 2023, taking the annual total to 4,370.

And data from the regions is here:

• For the three months ending June 2023, the highest employment rate estimate in the UK was for the South East (79.1%) and the lowest was for Northern Ireland (71.4%).
• The North East saw the largest increase in the employment rate compared with the same period last year, increasing by 3.3 percentage points, with Scotland seeing the largest decrease of 1.2 percentage points.
• For the three months ending June 2023, the highest unemployment rate estimate in the UK was for the West Midlands (5.2%) and the lowest was for Northern Ireland (2.7%).
• For the 12 months ending March 2023, average weekly hours worked ranged from 33.5 hours worked in London to 30.8 hours worked in the North East; most regions saw an increase in the average weekly hours worked compared with the same period last year, with the North West seeing the largest increase of 0.7 hours.
• Compared with the same period last year, total weekly hours worked increased in most regions of the UK; London had the most hours worked at 162 million hours per week, while the North West saw the largest increase in total hours worked, up 3.6 million hours; Wales was the only region to see a decrease in total hours worked, down 0.9 million hours.

The total number of online job adverts increased by 1% on 11 August 2023 when compared with the previous week, but was 5% below the level seen in the equivalent period of last year:

• In the latest week, there were increases in 16 of the 28 online job categories, while five were unchanged and seven decreased. The 'admin, clerical and secretarial' and 'scientific/QA' categories saw the biggest increases, both rising by 4%. The legal category saw the largest week-on-week decrease, falling by 8%.
• 21 of the 28 online job categories stood below their level a year ago. Total online job adverts have been relatively stable for the past six months, particularly when compared with the same period in 2022.
• Calculated as a rolling four-week average, the number of potential redundancies reported in the week to 6 August 2023 was 39% above the level in the equivalent week of 2022. The number of employers proposing redundancies was 29% above the level in the equivalent week of 2022.

The CIPD have issued their most recent quarterly Labour Market Outlook. This is based on a sample of 2,003 senior HR professionals and decision-makers in the UK. Fieldwork was undertaken between 9 June and 5 July 2023 by YouGov and weighted:

• The net employment balance remains stable at +28, indicating a positive outlook for hiring. Employment intentions in the private sector are steady at +32, while they've fallen in the public sector (from +16 to +11) and risen in the voluntary sector (from +22 to +34). Sectors with the highest net employment balances are construction, transport, storage, and healthcare (+44, +41, +38). About 19% of employers plan to make redundancies in the upcoming three months.
• 44% of surveyed employers struggle to fill vacancies, with the public sector having the highest rate at 50%, followed by the voluntary sector (46%) and the private sector (43%). Education has the most challenging time with 56% hard-to-fill vacancies.
• Over the next six months, 27% of employers anticipate significant hiring problems, while 36% foresee minor challenges.
• 49% of employers respond to hard-to-fill vacancies by upskilling existing staff. Many have raised wages (44%) and increased existing staff's duties (35%) in the past six months. The public sector (58%) focuses more on upskilling, while private sector employers increase duties (32%) and raise wages (50%) to a greater extent.
• 24% plan to address hard-to-fill vacancies through increased automation, compared to 18% who have done so in the past six months.
• This is a very interesting report packed with good data and is well worth a read.

Written by

Charlie Ball

Head of labour market intelligence

Jisc