UK graduate labour market update: 1 March

In his latest labour market update, Charlie Ball covers the current state of physics skills in the UK, a report on immigration policy and the workforce, and factors influencing the geographical mobility of graduates

The government has made substantial changes to the student loans system:

• Starting with the 2023 university entry cohort, graduates will pay more towards their student loans each year and their loan balances will only be written off 40 years after they start repayments.
• For the same cohorts, the interest rate on student loans will be reduced to the rate of increase in the Retail Prices Index (RPI), a large cut of up to three percentage points.
• Maximum tuition fees will be frozen in nominal terms until the 2024/25 academic year.

The Office of National Statistics (ONS) have delivered their weekly update on the impact of the pandemic on business and the economy:

• The total volume of online job adverts on 18 February 2022 remained broadly unchanged from the previous week, at 147% of its February 2020 pre-coronavirus average level.
• Of the 28 job categories Adzuna cover, 16 saw an increase in the number of online job adverts, while eight decreased and four remained unchanged when compared with the previous week. The largest weekly increases were in 'healthcare and social care' and 'scientific and quality assurance', which both rose by 7%.
• The volume of online job adverts increased in 8 of 12 English regions and UK countries on 18 February 2022 when compared with the previous week. The largest increases were seen in the West Midlands and Yorkshire and The Humber, which both increased by 3%, but were offset by a similar fall in the London region.
• Approximately 18% of the workforce were estimated to be using a hybrid model of working, with a further 12% of the workforce estimated to be working from home in late January 2022.

The ONS have also looked in more depth at the impact of restrictions on the economy:

• In mid-January 2022, it was estimated that 29% of UK single-site businesses' employees were either working from home or using a hybrid model of working. England was the country with the highest proportion reported, at 32%, while the lowest proportion reported was 18% in Wales.
• Across all sectors London estimated a much higher proportion of the workforce working from home or using a hybrid working model than other regions, with the proportion at 50% for all industries.
• In mid-January 2022, across all UK currently trading single-site businesses, the following percentages were reported for turnover over the last two weeks compared with normal expectations for this time of year…
• 31% indicated a decrease in turnover, broadly stable since late June 2021
• 50% experienced no impact on turnover, up from 46% in late June 2021
• 6% suggested an increase in turnover, down from 8% in late June 2021
• 13% were not sure, broadly stable since late June 2021.

The latest Jobs Outlook from the Recruitment & Employment Confederation (REC) is here:

• As Omicron recedes, business confidence is building again and turned positive in January, despite inflation and labour shortages
• Employers' confidence in making hiring and investment decisions saw a substantial rise to net: +17 in the three months to January.
• Employers' intentions to hire permanent staff increased further. Hiring intentions in the short term increased by four percentage points to net: +24, and medium-term demand rose by five points to net: +24. Hiring intentions remained highest for temporary workers in the short term, at net: +28.
• In January, 31% of employers reported that candidates they have interviewed since the pandemic began in March 2020 preferred some form of hybrid working. Just 13% would rather work exclusively from home. The strongest preference was to be predominantly at business premises with some remote/home working (17%).

A group of bodies in the employment space have backed an amendment to the Skills Bill that would make it a legal requirement for students to have access to vocational careers advice in schools.

The CIPD, Learning and Work Institute and Youth Employment UK are among the groups backing Conservative MP Robert Halfon amendment to the Bill, which would see an existing provision in the 2017 Technical and Further Education Act - the Baker Clause - become legally enforceable.

The Institute of Physics (IoP) have examined the current state of UK physics skills:

• The IoP's Workforce Skills project finds that physics skills already support nearly two million jobs across the UK and Ireland, and employer demand is strong and growing.
• Demand for physics spans all skills levels: while high-skill-level roles are seeing the fastest growth - with the number of jobs for physical scientists, for example, growing by 40% between 2010 and 2020 - more than half (53%) of physics-demanding jobs do not require a degree, with a sizeable minority (46%) typically requiring intermediate-level qualifications such as A-levels, Highers, Leaving Certificates and apprenticeships.
• Significant unmet demand for physics skills exists, with a substantial number of physics-demanding roles at any one time - nearly 9,000 high-duration vacancies in mid-2021, having quickly recovered to pre-pandemic levels - seeming to persist in being hard to fill.
• A shortage of qualified physics teachers remains a barrier to improving physics skills.

The Resolution Foundation have been looking at immigration policy and the workforce. It's the Resolution Foundation, so it's a substantial report with lots in it, but the bits that pertain to graduates are summarised here:

• The number of immigrants moving to the UK from the EU began to fall shortly after the 2016 EU referendum: between June 2016 and March 2020 the annual number of migrants moving to the UK from the EU fell by 111,000 and the number emigrating ticked up. By December 2017, net migration among people from EU-8 countries had in fact turned negative, with more moving from the UK than moving to it.
• Future flows of work-related migrants are likely to be more highly qualified and smaller in size than they were in the 2010s.
• Overall, the likely effect of the move to a new work-related migration regime (where migration flows are smaller than before the EU referendum but more concentrated in higher-productivity occupations) on productivity is likely to be positive - certainly by virtue of compositional effects and possibly via induced effects. But policy makers shouldn’t expect big productivity gains.

Kostas Kollydas of the University of Birmingham writes about the factors that influence the geographical mobility of UK graduates for Prospects Luminate:

• 58.1% of higher education graduates work in their region of study 15 months after completing their studies.
• Of the total 2018/19 university graduates who relocated to a different region for work, 65.3% moved to London, the East of England, the South East and the South West, whereas only 15.9% migrated to the northern English regions.
• Graduates with a qualification in Arts, Humanities, and Education are far more likely than STEM and LEM (Law, Economics and Management) graduates to stay in their region of study for work.
• The likelihood of staying local is more pronounced for new graduate workers who attended a postgraduate taught course (standing at 63.4% on average in the UK) than those who hold only a first degree (54.4%).

Quite a bit this time from Indeed. First, their Job Search Survey for January:

• 6.7% of respondents said they were urgently looking for a job in January, down from 8.6% in December. A further 17.1% said they were searching without urgency, while 48.7% were passively searching.
• Several factors continue to be cited by jobless people for not searching urgently for work, including having a spouse or partner still employed, caring responsibilities and concerns around COVID-19 exposure in the workplace.

Next, their analysis of remote working in job ads:

• Job postings on Indeed offering remote work options remain near their pandemic high despite the easing of public health restrictions.
• Postings describing jobs as temporarily remote were common during lockdowns, but have dropped to around one-third of remote work job ads.
• These trends suggest employers increasingly view remote work as a lasting phenomenon.

And on the current state of vacancies:

• Overall UK job postings rise to 50% above pre-pandemic levels.
• Strong hiring in many of last year’s booming categories like cleaning, warehousing and hospitality.
• Aviation has edged into positive territory, having seen one of the biggest improvements over the latest four weeks amid easing international travel and a jump in holiday bookings.
• Regional performance remains uneven with London lagging.
• Plymouth, Middlesbrough and Wakefield are furthest above the pre-pandemic baseline. Aberdeen, Aldershot and Southend have the weakest job postings recoveries.

And last but not least there's a new issue of the AGCAS magazine, Phoenix, focusing on students as co-creators.

Written by

Charlie Ball

Senior consultant: labour market intelligence

Jisc