In this labour market update, Charlie Ball looks at the Institute of Student Employers' latest findings on graduate recruitment and our own report on outcomes for graduates in Wales
Writers' prerogative ahoy. We kick off with a report by me! I've been looking in depth at the graduate labour market in Wales.
Most workers in Wales don't have degree or equivalent qualifications - but 47%, about 653,000 workers at the end of 2022 - did. Around 660,300 people were in professional-level employment, so the numbers of graduates and graduate level jobs are reasonably well balanced.
Caring personal service occupations, SOC 613 and so a set of jobs considered below professional level, at 5.2% of the workforce were the largest group of employees in Wales though declining in number over the year. Teaching professionals (4.2% of the Welsh workforce) were not far behind. Overall professional-level (SOCs 111 to 358) saw modest growth of around 13,000 workers in 2022, while non-graduate employment fell by around 9,200, with road transport drivers, sales assistants, personal care, secretarial, administrative and customer service occupations all seeing substantial falls in employment. This is in line with UK-wide trends.
Small and medium-sized enterprises are a little less important to graduate employment in Wales than in some other parts of the UK.
Between 2020 and 2035, Wales is projected to need 14,800 more STEM professionals, 26,800 new health professionals (mainly doctors and senior nurses), 18,200 more business services professionals (particularly in Cardiff and Swansea), 28,700 more health and social care professionals (mainly nurses and social workers) and all areas of graduate level recruitment are expected to increase. At present the number of graduates finding work in Wales is not sufficient to meet any of those targets.
Outcomes for graduates from Welsh institutions were slightly more positive than the UK as a whole. Unemployment was at the lowest since Graduate Outcomes data was inaugurated, at 5%, and full time work was at 55.4%. Working and studying was also high, at 11.6%, and this group covers people working full time and studying as well, meaning just under two thirds of Welsh graduates were in full-time work of some kind after 15 months, and 21.8% were in further study - somewhat higher than the national average.
Health is the most common occupation for this cohort of graduates, with over one in six graduates becoming health professionals. Retail and service industry jobs, not professional-level roles, were the next most important, but business and finance jobs, driven by a strong jobs market in Swansea and Cardiff, were the next most important at 8.3%.
The large majority of the cohort (72%) were in professional-level employment 15 months after graduation.
Small and medium-sized enterprises are a little less important to graduate employment in Wales than in some other parts of the UK, with 23.2% of graduates starting their career at an SME, and 7.6% of graduates from 2020/21 reporting some form of self-employment by the end of 2022.
There's also some more in-depth examination of the labour markets within Wales, looking at the differences between them, and how students and graduates move into and out of Wales.
Estimates for payrolled employees in the UK decreased by 35,000 (-0.1%) between July and August 2024, but rose by 165,000 (0.5%) between August 2023 and August 2024, data from the Office for National Statistics (ONS) shows.
When looking at June to August 2024 (comparable with our Labour Force Survey (LFS) estimates), payrolled employees rose by 3,000 (0.0%) over the quarter and by 203,000 (0.7%) over the year. The early estimate of payrolled employees for September 2024 decreased by 15,000 (0.0%) on the month but increased by 113,000 (0.4%) on the year, to 30.3 million.
Needless to say these are pretty small movements and point to a relatively flat, very slowly deflating jobs market at present.
The estimated number of vacancies in the UK decreased in July to September 2024, by 34,000 on the quarter to 841,000 - again, a small decrease.
The number of unemployed people per vacancy was 1.6 in June to August 2024, down from 1.7 in the previous quarter, historically, quite a low figure, indicating that although the labour market is loosening, it remains tight.
Vacancy numbers for quarters back to 2005 look like this:
As we can see, although vacancies are falling from the highs of 2022, they are still well above long term averages. In the last quarter the main fallers were jobs in retail, in hospitality, and in health.
Between March 2024 and June 2024, there was an increase in employee jobs of 62,000 (0.2%) and a decrease in self-employment jobs of 92,000 (2.1%)
Scottish figures are here. In September 2024, there were 2.46 million payrolled employees in Scotland, an increase of 0.2% (5,000) compared with September 2023.
Welsh data is here. The number of paid employees in Wales has decreased by 400 (0.0% to 1 decimal place) over the month of September to 1.32 million.
And NISRA's analysis for Northern Ireland is here. The number of employees in NI in September 2024 was 806,700, an increase of 0.1% over the month and 1.5% over the year.
NISRA, acting on behalf of the Department for the Economy, received confirmation that 190 redundancies occurred in September 2024. Over the year October 2023 to September 2024, 2,310 redundancies were confirmed, which was approximately 30 percent higher than the figure for the previous year (1,810).
There were 410 proposed redundancies in September 2024, taking the annual total to 3,000, which was around three-quarters of the figure for the previous year (3,970).
The total number of weekly hours worked in NI was estimated at 27.8 million hours, a decrease of 1.9% on the previous quarter and an increase of 1.5% on the equivalent period last year.
And the regions of England are summarised here. In June to August 2024, the highest employment rate in the UK was in the South West (78.8%) and the lowest was in Wales (69.8%), the highest unemployment rate was in the North East (5.6%) and the lowest was in Northern Ireland (1.9%), and the highest economic inactivity rate was in Northern Ireland (28.5%) and the lowest was in the South West (18.6%).
The total number of online job adverts on 18 October 2024 decreased by 3% from the level in the previous week and was 18% below the equivalent period of 2023 according to data from Adzuna.
In early October 2024, 8% of all businesses and 19% of businesses with ten or more employees reported that they were experiencing worker shortages; both figures are broadly stable with early September 2024.
19% of businesses with ten or more employees reported experiencing worker shortages in early October 2024, while 20% reported in September 2024 that they were experiencing difficulties around recruiting employees. Both percentages were broadly stable compared with the previous reporting periods, but decreased 5 and 6 percentage points, respectively, compared with a year ago.
The two industries with the highest proportion of businesses experiencing worker shortages were accommodation and food service activities, and other service activities (which includes hairdressing and repair of goods and equipment) at 20% and 28%, respectively. These were also the two industries that had the greatest proportion of businesses that were experiencing recruitment difficulties, with 31% of businesses in accommodation and food service activities and 33% in other service activities. Construction and health also had elevated levels of worker shortage, and the arts is very close to the overall average.
Competition for roles has ballooned, with the average employer receiving 140 applications per graduate job.
The Institute of Student Employers' Recruitment Survey is out, always an important read on the graduate labour market.
- Graduate jobs are up 4% in numbers this year, but competition for roles has ballooned, with the average employer receiving 140 applications per graduate job.
- A lot of this is down to the widespread adoption of effective AI tools by candidates, substantially reducing the barriers to recruitment - LLMs are good at CVs and covering letters, and at many online recruitment tools - meaning candidates now find it easier to apply and more are putting in multiple applications at scale. This also means that reneges remain high as applicants hold multiple offers until the last minute.
- 43% of employers said they had no problem with a candidate using AI in the recruitment process compared to 32% who were advising candidates not to.
- Employers were more likely to be supportive of candidates using AI to help write CVs and cover letters or complete application forms than they were in applying it to the later stages of the assessment process.
- Meanwhile, 79% of employers were not using AI in their own recruitment activities.
- Almost a quarter of employers surveyed had no minimum education requirements for graduate roles this year, that's more than twice as many as ten years ago. Those employers with minimum entry requirements have less reliance on minimum UCAS tariffs and 2:1 degrees.
- 44% of employers were not changing their approach to international recruitment with new visa rules coming into effect and would continue to successfully recruit international students for their organisations.
- However, 30% said that it had led them to recruit fewer international students. And 18% were unable to continue with their offers and had to rescind on the basis of not being able to meet the new requirements or salary thresholds.
All this means that we're in a strange place. It isn't true, as some commentators have said, that this is an unusually difficult jobs market for new graduates as such, as there are actually a lot of available jobs. But the ability of applicants to make applications at scale means we're in a new set of circumstances that we'll all need to adapt to.
In practise it will likely be easier for an individual graduate, in general, to make an individual application, and there are likely more individual opportunities available for them, but those individual opportunities might seem harder to get because they're all more competitive. That means those of us who try to use data for guidance and similar purposes will need to be quite careful about what we say and how we say it.
On AI, DSIT, the Department for Science, Innovation and Technology, have released an overview of the UK AI industry. Compared to the 2022 study, aggregate numbers of AI companies, revenues, employment and GVA are all higher in 2023.
- Total AI company numbers increased by 17% (+543).
- Total AI-related revenues increased by 34% (+£3.6 billion).
- Total AI-related employment increased by 29% (+14,500).
- Revenue and employment growth have been driven by diversified AI companies.
The regional profile of AI companies remains largely unchanged, centred on London, the South East and the East of England. 73% of all office addresses are located in London, the South East or the East of England, including 75% of registered addresses and 72% of all trading addresses.
There's also a report on the UK's geospatial industry. This includes things like GPS and associated satellite industries, radar and lidar, mapping and location sensors.
There are over 2,600 companies in the UK for whom the supply and provision of geospatial data is a core part of their product or service offering. Of these companies, 96% are fully registered in the UK, without overseas parent companies.
The value of the geospatial sector is at least £6billion per annum. This conservative estimate is based on the 8.3% of the market with public accounts and excludes large multi-national technology companies. As such, the total turnover of the sector will be higher and this turnover estimate does not reflect the wider economic and social benefit that this ecosystem brings.
The sector employs at least 37,500 people across the UK, and is quite spread although as usual much of the activity is in London and the South East.
REC's Labour Market Tracker shows a fall in vacancies in September, with drops in nearly all key roles, so there's clear sign of a slow but steady deterioration of the jobs market.
It's a similar picture in Ireland, where Morgan McKinley's Quarterly Employment Monitor, focused on the professional (i.e. graduate) market is showing a 2.1% drop in vacancies on last quarter. However, the number of job seekers has also fallen.
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