Graduate labour market update: international student data and the future of work

In this week's labour market update, Charlie Ball discusses the future of work and looks at census data from the ONS on international students

The timeliest estimate of payrolled employees in the UK for March 2023 shows a monthly increase, up 31,000 on the revised February 2023 figures, to 30.0 million.

• In January to March 2023, the estimated number of vacancies fell by 47,000 on the quarter to 1,105,000. Vacancies fell on the quarter for the ninth consecutive period and reflect uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment. Vacancies fell in 13 of the 18 industry sectors tracked by the ONS
• Total vacancies were down by 188,000 from the level of a year ago, although they remained 304,000 above their pre-coronavirus January to March 2020 levels.
• The estimated UK unemployment rate was 3.8 per cent in December 2022 to February 2023. The number of unemployed people per vacancy ticked up to 1.2, which is slightly up from the previous quarter, but remains historically very low.
• According to Adzuna data, there are currently 50,000 vacancies in IT, 43,000 vacancies in financial services, 111,000 in professional services, 200,000 in health and social work and 73,000 in education. Almost all of those jobs are graduate level.
• Total actual weekly hours worked in the UK have been generally increasing since the relaxation of coronavirus lockdown measures.. In the latest three-month period, total actual weekly hours worked increased by 15.8 million hours to 1.05 billion hours in December 2022 to February 2023. This remains 1.7 million hours below pre-coronavirus pandemic levels.

The story here is of a labour market that remains strong, but is weakening a little month by month.

Scottish data is here:

• The estimated unemployment rate for people aged 16 years and over in Scotland was 3.0 per cent in December 2022 to February 2023. This is 0.7 percentage points down on pre-pandemic and down 0.3 percentage points over the quarter.
• The estimated employment rate for people aged 16 to 64 years in Scotland was 75.7 per cent in December 2022 to February 2023. This is 0.3 percentage points up on pre-pandemic but down 0.4 percentage points over the quarter.
• The latest early payrolled employee estimates for March 2023 indicate that there were 2.44 million payrolled employees in Scotland. Compared with the same month the year before, the number of payrolled employees had risen by 1.3 per cent (31,000), and was up 1.3 per cent (33,000) on February 2023.

Welsh data is here:

• 1,441,000 people were in work in Wales in the quarter to February 2023, down 10,000 on the previous quarter.
• There were 52,000 unemployed, up 1,000 on the previous quarter, giving an unemployment rate of 3.5%.

Northern Irish data is here:

• The number of employees receiving pay through HMRC PAYE in NI in March 2023 was 790,600, a 0.5% increase over the month and a 2.3% increase over the year.
• In March 2023, the seasonally adjusted number of people on the claimant count was 36,200 (3.7% of the workforce), an increase of 2.3% from the previous month's revised figure.  The March claimant count remains higher than the pre-pandemic count in March 2020 by 21.2%.
• 50 redundancies occurred in March 2023, taking the annual total to 1,070, 42.2% less than in the previous 12 months.

Regional labour market data is here:

• All regions of the UK saw increases in total weekly hours worked compared with the same period last year; London had the most hours worked, at 162 million hours per week, while the South East saw the largest increase in total hours worked compared with the same period last year, up 5.7 million hours.
• There has been a slowing in the growth in the number of payrolled employees across the first three months of 2023, with some regions having decreases in individual months; although all regions have shown growth since the end of 2022, this has been stronger in the south of England and Northern Ireland than the rest of the UK.
• For the three months ending February 2023, the highest unemployment rate estimate in the UK was in London (4.7%) and the lowest was in the South West (2.3%).
• The East of England had the largest increase in the unemployment rate compared with the same period last year, increasing by 0.9 percentage points, with the North East seeing the largest decrease of 1.1 percentage points.

The total number of online job adverts on 21 April 2023 was unchanged from the previous week.

• Although the total number of online job adverts remained unchanged compared with the previous week, there were increases in 12 categories, falls in 11, and 5 remained unchanged. The total number of online job adverts was 17% lower than the level seen in the equivalent period of 2022.
• Compared with the previous week, the number of online job adverts remained fairly consistent across the 12 UK countries and English regions. Compared with the equivalent period of 2022, the number of online job adverts in 10 of the 12 UK countries and English regions decreased. The East Midlands continues to see the largest decrease compared with the level in the equivalent period of 2022, being 30% lower.

All age groups experienced increases in their sickness absence rate in 2022.

• The sickness absence rate - the percentage of working hours lost because of sickness or injury rose to 2.6% in 2022, an increase of 0.4 percentage points from 2021 and the highest it has been since 2004, when it was 2.7%.
• An estimated 185.6 million working days were lost because of sickness or injury in 2022; this level was a record high, but the number of days lost per worker, at 5.7, was not.
• The most common reason for sickness absence was minor illnesses, accounting for 29.3% of occurrences.
• Groups with the highest rates of sickness absence in 2022 included women, older workers, those with long-term health conditions, people working part-time, and people working in care, leisure, or other service occupations.
• The three graduate employment occupation categories - managers, professionals and associate professionals - had the three lowest rates of sickness absence.

The ONS have also released this fascinating data on international students in England and Wales from the 2021 Census.

• There were 373,600 non-UK-born, non-UK passport holding international students in England and Wales at the time of Census 2021.
• India (11.6%), China (11.2%), Romania (9.5%) and Nigeria (5.3%) were the top four individual countries of birth of international students.
• A third of the international student population was in London (33.9%).
• One in three international students were in employment; Eastern European countries had the highest proportions in employment alongside studying (Romania, 73.9%; Bulgaria, 62.3%; Poland, 56.7%, and Lithuania, 56.0%).

British Chambers of Commerce's Quarterly Recruitment Outlook shows no sign of an easing of recruitment difficulties.

• The first quarter results for 2023 show that recruitment difficulties have fallen two percentage points from the record high level of 82% in Q4 2022.
• Attempted recruitment in Q1 was virtually unchanged from the previous quarter, with 59% of those surveyed looking to find staff (61% in Q4 2022).
• While recruitment difficulties are being experienced across the economy, firms in the hospitality and manufacturing sectors were the most likely to report recruitment difficulties (83% in each sector). This is closely followed by the construction and engineering sector (81%) and then professional services; and public, education, health sector on 79%.

There are two important reports out from the Resolution Foundation this time around.

The first is the Low Pay Britain 2023 report.

• Low-paid work in the UK is predominantly made up of jobs in private sector services, which account for 1.5 million out of 2.5 million low-paid jobs. For the economy as a whole, these private non-tradeable services (including retail, bars and restaurants, care, and other personal services) account for a similar share of employment today (10.8 million jobs, 34% of the total) as they did thirty years ago, and so it is reasonable to assume that in the long term they will remain a substantial part of the economy. In some coastal and rural towns these sectors account for around 1 in 2 jobs, including places such as Sidmouth (59% of al jobs), Penzance (53%), and Whitby.
• (50%). No matter what levelling up agenda takes place, this is likely to remain the case for these areas.
• There is an unequal distribution of 'quality' work when it comes to how much workers are paid.
• 56% of workers with a gross individual income below £20,000 expect not to be paid if they had to miss a day of work because of a family emergency, compared to 12% of workers with incomes over £60,000.
• A range of other 'bad' work attributes are particularly concentrated on the lowest paid workers, including 38% of employees in the lowest-paid quintile expressing they have 'little or
• no autonomy over the tasks they do at work'. Finally, insecure work and a lack of autonomy or satisfaction with work is concentrated among Black, disabled and young workers.
• In 1991-93 - a period, it must be noted, when the UK was in a severe recession with particularly serious impacts on the labour market - there was a 'low pay satisfaction premium', with the lowest paid workers actually the happiest with 76% job satisfaction compared to 60% at the top end of salary. That premium has now entirely disappeared - and not because the better paid are (much) happier. 62% of the lowest paid and 63% of the highest paid quintiles of the working population state that they are happy with their job.
• Focusing on specific occupations with the highest share of employees who are 'not satisfied with their job' there is a real mix, including elementary sales (39%), legal professionals (38%), elementary administrators (38%) and IT technicians (37%).
• Over half of employees have no good opportunities for progression in Dudley (56%), Sunderland (56%), Barnsley (55%) and Wolverhampton (55%). This is around twice the rate of London boroughs like Barking and Dagenham (29%), Islington (28%) and Tower Hamlets (28%).

These findings mesh well with the second report, 'Enforce for Good'.

• Non-compliance with labour market law is widespread. Almost one-third (32%) of workers paid at or around the wage floor were underpaid the minimum wage; 900,000 workers reported they had no paid holiday despite this being a day-one entitlement; 1.8 million workers said they did not get a payslip.
• 14% of the lowest-paid workers report that they receive no paid holiday, six-times higher than the highest-paid. 11% of low-paid workers say they do not have a payslip, twice as many as those in the highest-paid quintile.
• The UK labour market enforcement system is highly fragmented, with six core bodies plus local authorities overseen and funded by seven different government departments.  The UK has just 0.29 labour market inspectors per 10,000 workers, meaning we are less than a third of the way to meeting the International Labour Organisation (ILO) minimum standard benchmark of one labour inspector per 10,000 workers. This leaves us ranking 27 out of 33 comparable OECD countries.

This leads the Foundation to call for a step change in worker's rights. The Foundation say:

'The levels of a wide range of labour market violations are unacceptably high; low-paid, and other vulnerable workers who are the least able to assert their rights themselves, are at the sharp end of unlawful employer practice; our state enforcement system is incoherent and patchy; our ability to detect violations is limited; and our standard approach to non-compliance when it is uncovered is weak.'

This is echoed by the cross-party Business, Energy and Industrial Strategy Committee, which is an excellent summary of recent labour market developments (if you haven't been reading and saving all of these newsletters), and calls for the creation of a Ministry of Labour with a Secretary of State responsible for labour market policy.

The World Economic Forum's Future of Jobs 2023 report forecasts significant disruption to labour markets in the next 5 years as a consequence of automation and AI.

• 85% of organizations surveyed identify increased adoption of new and frontier technologies and broadening digital access as the trends most likely to drive transformation in their organization.
• Broader application of Environmental, Social and Governance (ESG) standards within their organizations will also have a significant impact.
• The next most-impactful trends are macroeconomic: the rising cost of living and slow economic growth.
• The impact of investments to drive the green transition was judged to be the sixth-most impactful macrotrend, followed by supply shortages and consumer expectations around social and environmental issues.
• Businesses predict the strongest net job-creation effect to be driven by investments that facilitate the green transition of businesses, the broader application of ESG standards and supply chains becoming more localized, albeit with job growth offset by partial job displacement in each case. Climate change adaptation and the demographic dividend in developing and emerging economies also rate high as net job creators.
• Most businesses see AI and new technologies as a net job creator. 75% of companies are looking to adopt these technologies in the next five years.
• Digital platforms and apps are the technologies most likely to be adopted by the organizations surveyed, with 86% of companies expecting to incorporate them into their operations in the next five years. E-commerce and digital trade are expected to be adopted by 75% of businesses. The second-ranked technology encompasses education and workforce technologies, with 81% of companies looking to adopt these technologies by 2027. The adoption of robots, power storage technology and distributed ledger technologies rank lower on the list. Robots are the only new technology predicted to cause net job losses.
• Organizations today estimate that 34% of all business-related tasks are performed by machines, with the remaining 66% performed by humans - just a 1% increase on the levels reported in 2020.
• In 2020, respondents thought that 47% of business tasks would be automated in the following five years. Today, respondents have revised down their expectations for future automation to predict that 42% of business tasks will be automated by 2027. Task automation in 2027 is expected to vary from 35% of reasoning and decision-making to 65% of information and data processing.
• The majority of the fastest growing roles are technology-related roles. AI and Machine Learning Specialists top the list of fast-growing jobs, followed by Sustainability Specialists, Business Intelligence Analysts and Information Security Analysts. Renewable Energy Engineers, and Solar Energy Installation and System Engineers are relatively fast-growing roles, as economies shift towards renewable energy.
• The fastest-declining roles relative to their size today are driven by technology and digitalization. The majority of fastest declining roles are clerical or secretarial roles, with Bank Tellers and Related Clerks, Postal Service Clerks, Cashiers and Ticket Clerks, and Data Entry Clerks expected to decline fastest.
• Large-scale job growth is expected in education, agriculture and digital commerce and trade. Jobs in the Education industry are expected to grow by about 10%, leading to 3 million additional jobs for Vocational Education Teachers and University and Higher education Teachers. Jobs for agricultural professionals, especially Agricultural Equipment Operators, are expected to see an increase of around 30%, leading to an additional 3 million jobs. Growth is forecast in approximately 4 million digitally-enabled roles, such as E-Commerce Specialists, Digital Transformation Specialists, and Digital Marketing and Strategy Specialists.
• The largest losses are expected in administrative roles and in traditional security, factory and commerce roles. Surveyed organizations predict 26 million fewer jobs by 2027 in Record-Keeping and Administrative roles, including Cashiers and Ticket Clerks; Data Entry, Accounting, Bookkeeping and Payroll Clerks; and Administrative and Executive Secretaries, driven mainly by digitalization and automation.
• Employers estimate that 44% of workers' skills will be disrupted in the next five years. Cognitive skills are reported to be growing in importance most quickly, reflecting the increasing importance of complex problem-solving in the workplace. Surveyed businesses report creative thinking to be growing in importance slightly more rapidly than analytical thinking. Technology literacy is the third-fastest growing core skill. Self-efficacy skills rank above working with others, in the rate of increase in importance of skills reported by businesses. The socio-emotional attitudes which businesses consider to be growing in importance most quickly are curiosity and lifelong learning; resilience, flexibility and agility; and motivation and self-awareness.
• AI and big data are a particular priority. Companies rank AI and big data 12 places higher in their skills strategies than in their evaluation of core skills, and report that they will invest an estimated 9% of their reskilling efforts in it - a greater proportion than the more highly-ranked creative thinking, indicating that though AI and big data is part of fewer strategies, it tends to be a more important element when it is included.
• Continuing labour shortages are anticipated in the next five years. As a result, organisations identify skills gaps and an inability to attract talent as the key barriers preventing industry transformation.

Written by

Charlie Ball

Head of labour market intelligence

Jisc