Graduate labour market update: analysing the 'graduate voice'

In this update Charlie Ball, Jisc's head of labour market intelligence, provides an overview of reports on student cost of living, graduates' views on whether their work is meaningful, and a 'Manifesto for Good Work'

Monthly GDP fell by 0.5% in July, according to the Office for National Statistics (ONS).

Meanwhile, the estimate of payrolled employees for August 2023 is largely unchanged on the month, down 1,000 on the revised July 2023 figure, to 30.1 million:

• There were 989,000 job vacancies in the June to August period, a decrease of 64,000 compared to March to May 2023.
• Early estimates for August 2023 indicate that median monthly pay was £2,260, an increase of 6.7% compared with the same period of the previous year. Annual growth in median pay for employees in August 2023 was highest in the other service activities sector with an increase of 8.7%, and lowest in the finance and insurance sector with an increase of 3.2% - although the latter remains the sector with the highest median pay, at £3,704 a month.
• Median monthly pay across the NUTS3 regions of the UK in August 2023 ranged from £1,920 in Leicester to £3,488 in Wandsworth.
• Inner London generally differs from Outer London, with median pay ranging from £2,229 in Enfield to £3,488 in Wandsworth. Median pay in August 2023 for London as a whole was £2,703.
• Median pay across the LAUs in August 2023 ranged from £1,883 in East Lindsey to £5,493 in City of London.
• Vacancy numbers fell by 6.0% from March to May 2023, and vacancies dropped in 13 out of 18 industry sectors.
• In June to August 2023, there were 268,000 fewer job vacancies compared to the same period a year ago. However, vacancies remained 188,000 higher than the levels seen in January to March 2020, before the COVID-19 pandemic.
• In June 2023, UK workforce jobs fell to 36.7 million. This is a fall of 153,000 since March 2023, with a record quarterly fall of 197,000 in self-employment jobs having the largest contribution. Employee jobs offset this slightly, increasing by 68,000 on the quarter, but a further fall of 25,000 across government-supported trainees and HM Forces resulted in total workforce jobs falling for the first time since December 2020. Despite the quarterly fall, workforce jobs remain 995,000 above their December 2019 pre-coronavirus (COVID-19) position.
• The total number of jobs includes both employee jobs and self-employment jobs. The former has risen every quarter since September 2020 resulting in a record high of 32.4 million and is 1.6 million above its December 2019 pre-coronavirus level. This level of growth has not been repeated in self-employment jobs, which remain 651,000 below December 2019 levels.
• Annual growth in payrolled employees in August 2023 was the highest in Coventry with a rise of 3.9%, and was lowest in Camden and City of London with a fall of 1.4%; at local administrative unit level, growth rates varied between negative 6.8% and positive 4.7%.
• The increase in payrolled employees between August 2022 and August 2023 was largest in the health and social work sector with a rise of 193,000 employees, and smallest in the wholesale and retail; repair of motor vehicles sector with a fall of 19,000.
• The trend of quarterly declines in job vacancies, which began in May to July 2022, continued in June to August 2023, with a decrease of 64,000 vacancies compared to the previous quarter. The professional, scientific, and technical activities sector had the largest drop in vacancy numbers, down by 13,000.
• In June to August 2023, compared to the same period last year, total vacancies fell by 268,000. This decline was observed in 16 out of 18 industry sectors, with accommodation and food service activities experiencing the largest decrease of 48,000 vacancies.
• Despite the declines, the total number of vacancies remained 188,000 higher than the levels seen in January to March 2020, before the COVID-19 pandemic. Human health and social work activities showed the largest increase of 45,000 vacancies, with only real estate activities below pre-COVID levels.
• In May to July 2023, there were 1.4 unemployed individuals per job vacancy, up from 1.2 in February to April 2023. While this ratio is historically low, it indicates a slight loosening of the labour market as job vacancies decreased while unemployment increased.
• Only the smallest size band of employers, from 1 to 9 employees, saw an increase in vacancies in June to August 2023, growing by 3.4%.

Data for Scotland is available here:

• In the period May to July 2023, Scotland's estimated unemployment rate for individuals aged 16 and over was 4.3%, up by 1.2 percentage points from the previous quarter and 0.6 percentage points higher than the pre-pandemic rate. This rate was in line with the UK's unemployment rate.
• The estimates for August 2023 are provisional and based on approximately 85% of available information. In July 2023, when comparing with the same period the previous year, Scotland saw a 1.3% increase (31,000 employees) in the number of payrolled employees.
• In August 2023, Scotland had 2.45 million payrolled employees, showing a 1.2% increase (30,000 employees) compared to the same month in the previous year and a 2.9% increase (69,000 employees) compared to the pre-pandemic level from February 2020.
• Since the lowest point in November 2020, when there were 80,000 fewer payrolled employees in Scotland compared to February 2020 (pre-pandemic), the number of payrolled employees has generally been on the rise. Since November 2021, Scotland's payrolled employee count has consistently exceeded the pre-coronavirus levels of February 2020.
• When comparing August 2023 to February 2020, the month just before the pandemic, Scotland experienced a 2.9% increase (69,000 employees) in payrolled employees. This growth rate was slightly lower than the 3.9% increase observed in the UK over the same period.

Next is the data for Wales:

• The employment rate in Wales was 74.0%. This is up 2.1 percentage points on the quarter and up 1.9 percentage points on the year.
• Early estimates for August 2023 indicate that the number of paid employees in Wales has decreased by 1,700 (0.1%) over the month to 1.32 million.
• The number of workforce jobs in Wales in June 2023 was 1.47 million, a decrease of 61,60 (4.0%) over the year. Since June 1999, the number of workforce jobs in Wales rose by 235,000 (19.1%). The number of workforce jobs in the UK increased over the year by 551,400 (1.5%) to 36.7 million and has increased by 7.3 million (25.1%) since June 1999.
• In August 2023, Gwynedd had the largest increase in the number of paid employees in Wales compared to the same month in the previous year, increasing by 2.8%. Cardiff was the only other Welsh region to see a rise of over 2%. The smallest increase over the same period was seen in Ceredigion (0.4%).
• There were 324,000 people employed in the public sector in Wales during June 2023, up by 7,000 (2.3%) from the same period the previous year.
• The number of self-employment jobs in Wales in June 2023 was 164,800, a decrease of 30,100 (15.4%) over the year. Since June 1999, self-employment jobs in Wales increased by 21,300 (14.9%), accounting for 11.2% of workforce jobs (compared to 11.7% in June 1999).

Northern Irish data is here:

• The number of employees receiving pay through HMRC PAYE in NI in August 2023 was 791,300, a decrease of 0.1% over the month and an increase of 1.5% over the year.
• In August 2023, the seasonally adjusted number of people on the claimant count was 36,700 (3.8% of the workforce), an increase of 0.4% from the previous month's revised figure.
• Businesses reported that employee jobs decreased over the quarter (0.2%) and increased over the year (1.7%) to 813,450 jobs in June 2023. Quarterly increases in employee jobs were seen within the manufacturing, construction and other industries sectors to June 2023, with employee jobs within the services sector decreasing over the quarter. There were increases in employee jobs over the year within the manufacturing, services and other industries sectors to June 2023, with employee jobs within the construction sector decreasing over the year.
• The total number of weekly hours worked in NI was estimated at 27.8 million hours, a decrease of 4.2% on the previous quarter and an increase of 1.5% on the equivalent period last year.

And data for UK regions is available too:

• Between March and June 2023, workforce jobs decreased in nine out of 12 regions of the UK, with London seeing the largest decrease of 72,000, while the South East increased by 71,000, Scotland by 35,000 and the North East by 12,000. London had the highest proportion of service-based jobs (92.8%), while the East Midlands had the highest proportion of production sector jobs (12.5%).
• Comparing August 2023 with the same period last year, changes in payrolled employees ranged from a 1.7% increase in London to a 1.1% increase in Yorkshire and The Humber.

Also from the ONS, the total number of online job adverts on 15 September 2023 increased by 2% compared with the previous week:

• Total online job adverts increased by 2% on 15 September 2023 compared to the previous week.
• 15 out of 28 job categories increased. Eight remained unchanged, and five categories decreased.
• The largest increases in 'Legal' and 'Other/general' (both up by 10%). The largest decrease was in 'Scientific or Quality Assurance (QA)' by 6%.
• Total online job adverts were 4% lower than the same period in 2022. 23 of 28 job categories were below their 2022 levels. 'Human resources (HR) and Recruitment' had the largest decrease (39%), followed by 'Domestic help' (38%).
• 11 out of 12 UK countries and English regions saw an increase in online job adverts from the previous week. The North East and the North West had the highest increase at 5%.
• Nine out of 12 UK countries and English regions were below their 2022 levels.
• The East Midlands and the East of England had the largest year-on-year decreases (17% and 16%, respectively).
• The North East saw the most significant increase, up by 4%.
• 26% of the workforce in businesses of more than nine employees were working from home or in a hybrid mode at the end of August, rising to 76% in IT and 59% in professional services.  There doesn't appear to be a substantial amount of change in these measures at the moment.
• 86% of businesses of all sizes, and 69% of businesses with more than nine employees maintained the same staffing levels in August. Some 4% of businesses increased headcount, 5% decreased it. Headcount was most likely to increase in health and education and most likely to fall in accommodation and food services.
• 11% of businesses were experiencing worker shortages in late August 2023, rising to 26% of businesses with more than nine workers. 45% of those businesses reported they were unable to meet demands because of the shortages.
• 23% of businesses experienced recruitment difficulties in August, with recruitment issues in Scotland and experienced least in London.

Inflation and cost of living

The ONS have also released a very interesting report on the relationship between recent wage and price increases - in other words, how wage increases may have affected inflation:

• Wage increases are largely not fuelling inflation.
• Businesses that reported difficulty filling vacancies were more likely to also raise prices, as were businesses that reported facing an increase in demand.
• In manufacturing and some services industries, even after large wage increases between 2019 and June 2023, costs have largely been stable as a fraction of output, and industry output price growth has appeared to be mainly caused by other factors.
• In several services industries, labour costs are important and pass-through of wage rises could explain most output price growth since 2019.
• In a sample of large manufacturing businesses, there was generally no clear positive correlation between the amount of a business's annual wage increases and the size of output price increases in the same business. While there was limited evidence of a positive correlation between business-level annual wage growth and price growth in manufacturing in Quarter 1 (Jan to Mar) 2023, this correlation had fallen back in Quarter 2 (Apr to June) 2023.
• In a sample of businesses from the Business Insights and Conditions Survey, if a business reported an increase in wages over the month, it was 59% more likely to also report an increase in output prices over the month, controlling for whether the firm also experienced an increase in input prices.

And another really interesting report from the ONS on student experiences of rising cost of living:

• The ONS conducted interviews with 25 students from universities across England about challenges associated with the cost of living.
• Some students struggled to afford their bills or food shopping. Careful budgeting was not enough to keep costs down for many students, who had to find other ways to make ends meet.
• These included cutting down on food and other essentials, using savings or taking on debt.
• Many worked extra hours, sometimes in multiple jobs, or relied on support from family.
• While there was some support available to help manage the cost of living through bursaries or hardship funds, these were not open to all students.
• Students said they had a poorer university experience as a result, with the rising cost of living affecting their academic performance, skills development, health and wellbeing.
• There is a wealth of well-reported qualitative information in this report, which is well worth reading.

Our excellent colleagues at HESA (part of Jisc) have been examined the 'graduate voice' questions in the Graduate Outcomes survey to assess the value of non-financial job quality measures. I hate to give readers a lot of homework, but you really ought to read this too.

There is a section in the Graduate Outcomes survey that asks graduates in employment to highlight the extent to which they agree or disagree with the following three statements:

• My current work is meaningful.
• My current work fits with my future plans.
• I am utilising what I learnt during my studies in my current work.

A Likert scale is used that comprises five options ranging from strongly disagree to strongly agree (graduates are asked to choose one of these in each instance).

Each response is assigned a value (1 - strongly disagree, 2 - disagree, 3 - neither agree nor disagree, 4 - agree, 5 - strongly agree). These are the 'graduate voice' questions.

The three questions all seem to produce associated results and thus can be examined as a composite measure. The UK's Measuring Job Quality Working Group suggested that a measure examining the design and nature of work is one component of job quality comprising of aspects such as skills utilisation, progression opportunities and whether employment provides a sense of purpose - and this is a version of what a composite measure of the Graduate Outcomes variables produces. The rest of the paper examines this composite measure as a design and nature of work measure.

When it comes to the design and nature of work, graduates from all ethnic minorities report lower scores than their White counterparts.

A positive association between earnings and wellbeing is only seen until we reach an annual salary of approximately £24,000. Thereafter, the relationship flatlines – a higher salary than this level has no association with increased wellbeing.

There is a much less strong association between job category under the SOC system and higher design and nature of work scores and life evaluations, although the professional level job categories do score higher.

This association becomes even less clear when examining graduates by whether or not they stated that they felt their qualification was a requirement for their role. This is particularly the case where graduates stated that their qualification was required for jobs not considered to be professional level under SOC, where graduates in caring and skilled trade professions saw similar design and nature of work scores to those in professional level employment.

This is a very interesting and thoughtful paper that makes a strong case for the value of the graduate voice questions in Graduate Outcomes.

Supporting local students and a 'Manifesto for Good Work'

The Bank of England Agents have released their quarterly summary of business conditions:

• Businesses generally expected to keep staff numbers broadly stable over the coming year. Intentions to cut staff numbers were most notable in the real estate and construction sectors.
• Recruitment difficulties continued to ease. The easing was still concentrated at the lower end of the skills range, but there were signs that it was becoming more general. Some contacts said that retention had improved as staff seemed more reluctant to leave jobs because they were worried about being 'last in, first out'.
• Recruitment remained very difficult for businesses in sectors with persistent skill shortages, such as IT, engineering, and finance - notably, all graduate professions.
• Pay settlements for 2023 were running at around 6% to 6.5%, on average. Most contacts expected the level of settlements to reduce over the rest of this year and then reduce further next year. Expectations of lower settlements reflected contacts' expectations of further falls in inflation, reduced demand for businesses' goods and services, and further easing in recruitment difficulties.
• Far fewer businesses expected to make 'cost of living' payments to staff over the coming year than had done so last year.

The Office for Students (OfS) have published an evaluation of their 2018 Challenge Competition aimed at providing support for local students (interest declared, I had involvement in some stages of this):

• 89% of student or graduate participants were positive about their participation
• 87% of employers participating in the programme reported that their participation had brought value to their business.
• Among the 16 funded projects, Birmingham City University and Aston University aimed to reduce graduate unemployment through productive partnerships including with the local Job Centre Plus network. The project resulted in 220 unemployed programme completers securing a work placement or job, and 172 programme completers securing a graduate-level work placement or job.
• Projects also reported increases in interest in working in the local labour market. Projects at Newcastle College University Centre and the University of Nottingham directly facilitated transition into the local labour market, and the report found that participants tended to remain in the local labour market at the end of the programme.
• Canterbury Christ Church University's project aimed at a range of minority groups created a new recruitment model for graduates by collaborating with employers and students to ensure the programme developed skills and abilities that match the requirements of a workplace. 225 employers signed up to the project offer and 16 employers committed to being employment mentors. The programme is now a permanent part of the university's service to students and businesses.
• Some projects were also recognised nationally for the innovative work they have undertaken, including: Birmingham City University's 2022 Association of Graduate Careers Advisory Services Award for Excellence in Building Effective Partnerships; De Montfort University's 2021 Times Higher Education award for Outstanding Support for Students; and Manchester Metropolitan's Guardian University Award for Course Design, Retention and Student Outcomes in 2020.

The CIPD have released a new report, the Manifesto for Good Work. The Manifesto calls for an integrated workforce strategy themed around Skilled Work, Healthy Work and Fair Work. Recommendations include:

• Develop industrial strategy with a broader focus on improving job quality, innovation and productivity across all sectors of the economy.
• Establish a high-quality, locally delivered business support service for SMEs to boost investment in skills development and people management capability and support digital adoption and green transition.
• Develop the Apprenticeship Levy into a flexible skills levy to boost employer investment in technical skills and free up more funding to invest in apprenticeships for young people.
• Establish a taskforce on AI and the workplace to consider and where necessary recommend changes to employment regulation in light of fast-moving developments in AI and potential risks to workers' health and employment rights.
• Tackle discrimination at work by bringing responsibility for enforcing workers' rights under the Equality Act 2010 within the remit of a properly resourced Single Enforcement Body.
• Increase statutory paternity leave to six weeks at or near the full rate of pay, to help deliver more balance and choice for working parents over how to manage caring responsibilities.
• Review and reform Shared Parental Leave (SPL) to boost uptake by enhancing the statutory provision and simplifying the process for both working parents and employers.
• Require employers to include basic pay and pension information in job adverts to improve reward transparency and help reduce pay and pension gaps.

The eagerly awaited (at least by me) Employers Skills Survey 2022 results are out next week but in advance some DWP statistics have been released.

62% of employers who had tried to recruit in the last 12 months stated they had been unsuccessful on at least one occasion. Low number of applications, either with the required skills (58%) or more generally (56%), and a lack of interest in the kind of work on offer (49%) were the most common reasons given by employers.

Almost half of employers (48%) who had tried unsuccessfully to recruit also cited a low number of applicants with the required attitude, motivation or personality as a reason. 35% stated that applicants didn't have enough work experience and 29% that there was too much competition from other employers.

14% said they had issues with staff retention, with poor terms and conditions, competition from other businesses and poor career progression the most common reasons cited.

Written by

Charlie Ball

Head of labour market intelligence

Jisc