Lockdown latest: how is the graduate labour market faring?

In his latest COVID-19 update, Prospects' head of higher education intelligence, Charlie Ball, highlights new research and findings on the impact of the lockdown on the graduate labour market

We are going to try to keep writing weekly updates of evidence and data about the state of the UK graduate labour market - we're very happy to answer questions and talk to people, but mostly we're going to do evidence and data so we can all try to keep up to date with what seems to be happening.

Much of the main messages are similar to those from last week.

• Hiring is down, but it hasn't ceased.
• There's a clear difference between the effects on smaller and larger businesses with larger businesses able to ride things out better so far.
• There's increasing evidence that there are different effects on different regions.
• Recruiters are still holding offers but it looks as if some of them may not be fulfilled if current conditions persist for a long period.

Indeed have examined UK job posting figures and found them down 44% on the same period last year as of 10 April. By region, Scotland and Northern Ireland were down over 50%, London down by 38.5%, the rest of the UK were all between 40 and 50% down.

The worst affected industries do have rather less graduate hiring than many others - beauty, hospitality, food preparation and service and customer service - but software development and education were both down around 35%. Much less affected were healthcare roles.

Adzuna had similar findings, reporting a 42% drop in vacancies in the year to date compared with last year. Their list of heavily affected industries looks quite similar to Indeed's - hospitality and catering vacancies were down more than 75%, energy (-66%), admin (-63%), travel (-61%) and HR and recruitment (-61%) were also seriously affected, while manufacturing roles have dropped by slightly more than half.

The Enterprise Research Centre found that company dissolutions were up 70% in March 2020 compared with March 2019. The most severely affected sectors here appear to be wholesale and retail,  professional  services,  transportation and storage, information and  communication, scientific and technical, and construction. The authors note that relatively new businesses - those in existence for less than 6 years - have been particularly affected.

London saw the largest increase in dissolution by number, but dissolutions in the West Midlands and Wales more than doubled from this time last year. New businesses are still being created, however - but numbers are down from March 2019 and so the net number of UK businesses did fall in March.

The Office of National Statistics published data from their Business Impact of Coronavirus (COVID-19) Survey (BICS), conducted between 3 March and 5 April 2020. The majority of businesses were trading, but 25% had paused or temporarily closed. Only 0.4% had permanently closed. An average of 21% of the workforce of businesses that were still trading had been furloughed under the government's scheme, and 69% of the workforce was working as normal. 35% of business reported that their turnover was unaffected, but 37.5% said their turnover was down substantially. In all, just over half of responding business reported lower turnover. 41% of businesses reported reducing staff numbers in the short term - but 7% were increasing staffing.

The ONS found that 47% of staff were working remotely, which is particularly interesting in light of a paper from Jonathan I. Dingel and Brent Neiman at the University of Chicago's Becker Friedman Institute suggesting that 43.5% of UK jobs could be done remotely.

Finally, the IZA Institute of Labor Economics in Bonn have compiled a treasure trove of datasets on COVID-19 and its effects that is well worth delving into for analysts looking to examine the situation as it continues.

Where does the UK graduate labour market stand?

• There is no doubt that it is seriously affected, but the non-graduate jobs market appears to be bearing the brunt of the effects right now.
• There is still hiring going on - and businesses are even being created - but it's at a much reduced rate compared with last year.
• Smaller businesses are having a more difficult time, but only a minority of businesses are shuttered - most of those are hoping to reopen later - and most workers are still working, albeit remotely in many cases. Not every business is suffering though.
• Regions are being affected differently and as more data comes in we'll get a better picture of what's going on in that respect.
• The worst-affected sectors include hospitality, beauty and catering. There are mixed messages from professional and technical services but hiring does seem to be down a fair amount in at least some parts of those sectors. Healthcare of all kinds, perhaps unsurprisingly, is not seeing the same issues.

Needless to say, this is a fast-moving situation and new evidence is coming in all the time, so we will try to keep these updates going as and when new data comes to light.

Also in this series

• Three weeks into lockdown: a graduate labour market update
• What impact will COVID-19 have on graduate recruitment?
• How are graduate employers adapting to the challenge of COVID-19?

Written by

Charlie Ball

Head of higher education intelligence

Prospects