Graduate labour market update: Scotland deep dive and degree apprenticeships

Charlie Ball summarises the latest labour market outlooks from the CIPD and Chambers of Commerce, before highlighting a House of Commons Library paper on degree apprenticeships

We've released What do graduates do? Scotland, the most detailed analysis of the graduate labour market in Scotland ever produced.

This takes data from Office for National Statistics (ONS), government and HESA sources to get a detailed picture of Scottish graduate employment at national and local level:

• Scotland has a higher proportion of people than the UK average educated to NVQ4+ (degree or equivalent) - the majority of the workforce has this level of qualification - and around the same proportion of professional-level jobs as the UK as a whole. This means that there are slightly more people educated to  NVQ4+ level than there are roles at professional level.
• Outcomes for graduates from Scottish institutions were slightly more positive than the UK as a whole. Unemployment was at the lowest since Graduate Outcomes data was inaugurated, at 4.2%, and full-time work stood just a hair below 60%.
• Small and medium-sized enterprises (SMEs) are a little less important to graduate employment in Scotland than in some other parts of the UK, with 22% of graduates starting their career at an SME.
• The vast majority of new graduates working in Scotland (82%) are from Scotland and studied in Scotland.
• Meanwhile 7% are incomers (from outside Scotland and didn't study there), 6% are returners (from Scotland but went elsewhere to study) and less than 5% are stayers (from elsewhere but moved to Scotland for study and stayed for work).

Data from the ONS showed that UK gross domestic product (GDP) is estimated to have increased by 0.6% in quarter 1 (Jan to Mar) 2024, following declines of 0.3% in quarter 4 (Oct to Dec) and 0.1% in quarter 3 (July to Sept) 2023.

This means the UK is no longer in recession. In output terms, services grew by 0.7% on the quarter with widespread growth across the sector. Elsewhere the production sector grew by 0.8% while the construction sector fell by 0.9%.

The estimated number of vacancies in January to March 2024 was 916,000, a decrease of 13,000 or 1.4% from October to December 2023.

• Vacancy numbers fell on the quarter January to March 2024, despite vacancies falling in only eight of the 18 industry sectors, however within the quarter vacancies have seemed to bottom out and started to rise again from March.
• Total estimated vacancies were down by 204,000 in January to March 2024 from the level of a year previously, although they remained 120,000 above their pre-coronavirus (January to March 2020) levels.
• The number of unemployed people per vacancy was 1.6 in December 2023 to February 2024, up from 1.4 the previous quarter (September to November 2023), with vacancies falling and unemployment increasing.
• Ongoing issues with weighting the Labour Force Survey means it's difficult to work out exactly what payrolls look like right now, but hours worked, both in total and on average, have gone up over the quarter.
• Total estimated vacancies in December 2023 to February 2024 were down by 224,000 from the level of a year previously, although they remained 107,000 above their pre-coronavirus (COVID-19) January to March 2020 levels.

The total number of online job adverts on 3 May 2024 was 4% higher than the level in the previous week.

There were increases in 11 of the 12 UK countries and English regions, with the North West and South East both seeing the largest rise of 6%, when compared with the previous week. Northern Ireland was the only country or region to see a decrease, falling by just 1%.

Calculated as a four-week rolling average, the number of potential redundancies in the week to 28 April was 15% below the level in the equivalent week of 2023; the number of employers proposing redundancies was 1% below the level in the equivalent week of 2023.

Annual Population Survey data for 2023 is now available through NOMIS:

• At the end of 2023, there were over 16.9 million people in the UK workforce with degree or equivalent qualifications, or 53% of the workforce.
• Over 17.3 million people were employed in professional-level jobs, or 53% of all UK jobs.
• In 2023, the number of people working in graduate level employment in the UK rose by 754,500. Jobs below degree level fell by 414,100.

The number of IDBR business creations in the UK in quarter 1 (Jan to Mar) 2024 was 85,485. This figure is 6.1% higher than the number of business creations in quarter 1 2023, which was the lowest quarter 1 since the start of the quarterly series in 2017.

The number of business creations increased in ten out of 16 main industrial groups during this quarter compared with quarter 1 2023. The most significant increase came in the business administration and support services industry, where business creations were up by 28%.

The number of business closures in the UK in Quarter 1 (Jan to Mar) 2024 was 88,460.

This is 17.2% lower than in Quarter 1 2023, with 14 out of 16 main industrial groups showing a decrease in closures. This large fall follows high numbers of closures in quarter 1 2022 and quarter 1 2023. The most significant decrease in closures came in the transport and storage industry (down 32%). Within transport and storage, freight transport by road showed the most significant fall.

The CIPD's new Labour Market Outlook shows most employers (55%) looking to keep staffing levels steady, and public sector more likely to make layoffs - with recent news about the increasingly difficult financial status in universities, it is not difficult to agree with that judgement.

• At the same time 37% of employers surveyed have hard-to-fill vacancies. Hard-to-fill vacancies are significantly higher in the public sector (52%) than the private sector (33%).
• 44% more teachers said they intended to leave teaching than in the previous year, suggesting high outflow from the industry. Nearly all (94%) of the teachers who were considering leaving cited high workload as a reason. 36% of employers in education and 33% in public administration and other public sector are anticipating significant problems in filling vacancies in the next six months.
• The proportion of employers in healthcare expecting significant problems has fallen from 39% last quarter to 31% this quarter.
• The net employment balance - which measures the difference between employers expecting to increase staff levels in the next three months and those expecting to decrease staff levels – remains positive at +19 this quarter.

Chambers of Commerce, however, tell a slightly different story, with their Quarterly Recruitment Outlook reporting issues in manufacturing recruitment (in line with their membership).

The first quarter results for 2024 show that 62% of respondents said they had attempted to recruit in the last three months, slightly up from 59% in Q4 2023. Of these firms, fewer reported recruitment difficulties, 66% compared with 76% in Q4 of last year. It's the first quarter the figure has fallen below 70% since the economy reopened post-pandemic (Q2 2021). 

Production and manufacturing firms are bearing the brunt of the staffing issues, with 70% of businesses reporting hiring problems in Q1. However, that's down from 77% in the final quarter of last year. In both the construction/engineering and transport/logistics sectors, 69% of firms said they had experienced recruitment difficulties, while the hospitality sector reported 64%. 

The House of Commons Library has released a briefing on Degree Apprenticeships:

• In 2022/23, around 46,800 people in England started a degree apprenticeship. 53% of these starts were at level 6 (first degree equivalent) and 47% at level 7 (equivalent to a Masters degree).
• In 2022/23, there were similar numbers of male and female starters. In earlier years more starters were male, but the number of female starters has caught up over time.
• Only a minority (13%) of level 6 starters were age 18 (and so leaving full-time education). 53% of level 6 starters and 62% of level 7 starters were aged 25 or older.
• 82% of 2022/23 starters at level 6 and 73% at level 7 were from a White ethnic background.
• In May 2020, the Sutton Trust published a report that found 33% of degree apprenticeship levy funding was being spent on senior leaders, which was the same amount as all degree apprentices under 25 put together. In 2021, the funding for level 7 senior leadership apprenticeships was reduced, and the MBA qualification is now no longer a mandated part of the apprenticeship.
• As always, there is simply no better summary of the topic than the HoC Library.

Written by

Charlie Ball

Head of labour market intelligence

Jisc