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Moving into May: graduate labour market update

May 2020

Prospects' head of higher education intelligence, Charlie Ball, provides his weekly update on the impact of COVID-19 lockdown on the graduate labour market

Greetings from Jisc! As we move into May and say a fond goodbye to HECSU, here's our weekly update on the UK graduate labour market.

More information is coming in all the time and although it is often confusing and apparently contradictory, some pictures are emerging. A brief summary of where we are:

  • There has been a serious effect on hiring, but there are still unfilled vacancies - this is in line with previous downturns.
  • Smaller businesses are simply trying to stay afloat and we should not expect much hiring activity from that sector.
  • The impact is and will be unequal on different industries and regions.
  • There are mixed reports from students and graduates about job offers, with some more stories emerging of recruiters not fulfilling previous offers.
  • Placements, work experience and apprenticeships all seem to be more affected than 'conventional' graduate vacancies.

IHS Markit's flash survey of business confidence saw a very steep fall in activity to the lowest levels on record. Around 81% of  UK service  providers and 75% of manufacturing reported a fall in business activity during April, with those seeing an increase mainly in medical supply chains and in food and drink. About half of all respondents reported lower staffing levels in April than they had in March, although much of that was accounted for by employees on furlough.

The Bright Network surveyed students earlier in April and found that 63% of respondents had experienced recruitment being put on pause or cancelled due to the outbreak, while 64% had taken proactive steps to work or volunteer in roles supporting communities during the pandemic, such as healthcare, supermarkets or delivery. 34% were prioritising roles offering flexible working when applying.

In a similar vein, HEPI have published their own survey of student attitudes to the jobs market. 79% of those surveyed (who were from all stages of their university career, not just finalists) were confident that they would get a graduate job. 64% had a specific career in mind. But 42% of finalists said that the pandemic had changed their views of their careers, mainly citing the reduction in placements and vacancies. Students in healthcare subjects were concerned about the environment they were about to enter and the expectations on them.

The Institute of Student Employers surveyed suppliers - members from education and from key organisations who link up education and employment - about their views on the effects of the pandemic on graduate recruitment. Although there was a strong consensus about the likely negative effects on recruitment, most expected that there would ultimately only be a relatively modest downturn in the standard graduate recruitment market and a more serious fall in numbers of internships and placements.

Indeed's weekly examination of vacancy numbers, through to 24 April, found a 53% drop in UK vacancies year on year. However, there were also signs of some stability returning to the market with a modest rise in the number of job postings after the Easter period. Indeed reported hospitality, food and drink and beauty as being particularly affected and have also noted a large fall in the number of construction vacancies. Healthcare - nursing, medical technology, personal care, pharmacy - has seen a much smaller fall than average in numbers of vacancies. London again showed the smallest decline in vacancies.

The Institute of Employment Studies' weekly analysis of vacancies on Adzuna to 26 April saw a further fall of 9% in vacancy numbers on the previous week - 364,000 were listed. However, there was also the first rise in six weeks in the numbers of new vacancies. Unlike the Indeed data, this analysis saw London as being the most affected region, but both datasets show profound effects on the hospitality sector.

IES also report a large fall in recruitment roles and in roles in call centres. Further, they note that vacancy falls are clustered at the lower end of the salary range and could represent the market for new entrants shrinking. They also note 41,000 vacancies in social work, higher than last year and now 1 in 10 of all recorded vacancies.

In summary

  • Although there has been an effect on the graduate labour market, it looks as if industries where non-graduate roles are more important are more seriously affected.
  • Job creation activity is down on last year but has not stopped, and there are still positions available. It may be that job creation has started to rise again.
  • Small and medium-sized businesses are experiencing a harder time of it in general than larger ones.
  • There is going to be an unequal impact on the regions of the UK, but the evidence is mixed.
  • There are particular concerns about the impact on apprenticeships and on internships and placements.
  • It looks increasingly likely that demand for postgraduate courses will rise.
  • The data is starting to give signals about which industries and jobs will ride this out more easily. Healthcare remains robust and some analysis even has positions increasing, as with social work. We also hear that some uniformed roles, such as police, are also still recruiting strongly. Recreation and travel, parts of retail, beauty and hospitality all seem be having a particularly difficult time. Although reports are mixed about business services and finance, it looks as if those sectors are largely coping.
  • There's a long way to go yet.

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