Prospects' head of higher education intelligence, Charlie Ball, provides his regular update on the impact of the COVID-19 recession on the graduate labour market
What we're hearing:
- Not surprisingly, we're officially in a recession.
- The graduate labour market has suffered significant damage, particularly in the arts - which may be the worst-affected sector in the UK. But things are far worse for non-graduates. Many key graduate employment sectors - in health, social care, IT, finance - have been much less affected than many other areas of the economy. Retail, hospitality, travel and accommodation employers have all taken long term hits.
- The level of vacancies is running at about 50-60% of normal rates.
- Things are also looking difficult for the self-employed, partly because a lot work in sectors, such as the arts, that have been badly affected and partly due to sheer lack of cash reserves - although the sector has been more resilient than originally feared.
- Domestic student numbers seem to have held up strongly as young people opt for more education rather than taking their chances in an exceptionally difficult jobs market - but applications are not the same thing as actual enrolments.
- Postgraduate interest is strongly up and the coming term could see a great many enrolments. Teaching, for example, is up significantly.
- The situation for international student recruitment is tricky and we won't really know what the true impact is on universities until registration and we find out if they do or don't turn up.
- Salaries are likely to remain stagnant or even fall.
- Decisions made about recruitment and business strength this year will also affect next year's recruitment round (at least).
- The collapse in employment in retail and services is likely to affect term-time jobs for students in the future and thus the ability for students from less advantaged backgrounds to support themselves at university.
- The pandemic is going to profoundly change the nature of work for many employees and professional services and IT workers in particular have proved as productive at home as in the office, so a widespread move to homeworking is likely for many graduates. The large majority of workers in tech and professional services are currently working from home, and if this pattern persists it will significantly change many aspects of society, particularly in our cities.
People Management continue their liveblog on employer actions in the pandemic.
The latest analysis of the economic impact of COVID-19 from the ONS is here, reporting to 27 August.
- Across all industries, 95% of responding businesses reported they were currently trading.
- The arts, entertainment and recreation industry had the largest proportion of the workforce furloughed, at 51%, compared with 13% across all industries.
- Across all industries, 6% of the furloughed workforce returned from furlough in the last two weeks.
- The arts, entertainment and recreation industry, and the accommodation and food service activities industry both had 23% of their businesses reporting their risk of insolvency was severe to moderate, compared with 11% across all industries.
- 13% of the workforce were on furlough leave.
- 39% of the workforce were working remotely.
- 42% of the workforce were working at their normal place of work.
- 4% of businesses have no remaining cash reserves.
- 40% have less than 6 months cash reserves.
Thanks to the easing of lockdown restrictions, output rose but this has not stabilised the labour market as August saw the seventh consecutive monthly fall in manufacturing headcount.
76% of workers in IT and 68% of workers in scientific, technical and professional services were working from home in August. 74% of workers in education also reported homeworking but, of course, we must bear in mind this is August and this figure is likely to look very different in September.
This week's updates on the effects of pandemic on UK society and the economy from the ONS are here, reporting to 27 August.
In the week starting Saturday 15 August, there was an average of 3,393 incorporations per working day, up from 3,002 in the previous week. There was an average of 828 voluntary dissolution applications per working day, down from 865 in the previous week.
There is also another analysis of Adzuna data but the ONS have changed methodology and removed duplicate job adverts that were caused by Adzuna reassigning national adverts to numerous locations across the UK. These adverts were causing inflation in some Adzuna categories for some periods - this is a common issue for online job ad sources. Data is here. Vacancies are currently at 54.5% of the national average for 2019.
Important graduate industries with vacancies running above the national average include health and social care, construction, engineering and science/QA. Management, consulting and charity roles are all running at below 30% of the 2019 average.
The ONS have also produced analysis on the effects of pandemic on occupational switching. Of those employed in Q1 and Q2 2020, 6.1% changed occupation in the first half of this year compared with 5.7% in the same period last year.
Associate professional and technical occupations experienced the greatest percentage of occupational outflows (20.9%) and occupational inflows (21.2%); over half (52.5%) also changed major industry. By far the largest group of those leaving associate professional occupations were those entering professional occupations.
Of the workers who changed occupation between Q1 and Q2 2020, over half (52.6%) were men, 26.9% were aged 35 to 49 years and 26.9% were aged 50 to 64 years.
The House of Commons Library have thus updated their invaluable briefing on the effects of the pandemic on the economy. This is not just a very fine summary of the state of play, it is also the briefing for government, so well worth keeping up to date with what is in it.
A BBC survey of 50 large businesses has found that they do not plan to return all workers to the office in the near future.
- 24 firms said that they did not have any plans in place to return workers to the office.
- 20 had plans to gradually return some workers to the office.
- 20 have opened offices for staff unable to work from home.
- Three have returned some workers to the office but do not plan to return any more.
One of the main reasons given for the lack of a substantial return was that firms could not see a way of accommodating large numbers of staff while social distancing regulations were still in place.
The CBI's monthly Distributive Trades Survey found retail employment fell at the fastest rate since February 2009 in the year to August, with an even sharper decline anticipated this month.
- Employment in the retail sector fell sharply (-45% from -20% in May), at the sharpest pace since February 2009, with a faster fall expected in the quarter ahead (-52%).
- Retail sales fell slightly in the year to August (-6% from +4% in July) and are expected to fall at a faster rate next month (-17%).
- Orders fell again (-27% from -14% in July) and are expected to fall at a similar pace next month (-26%)
- Internet sales grew (+46%) at a pace broadly in line with the long-run average (+45%), with a similar rise expected next month (+48%).
- Retailers expect the business situation to improve moderately over the next three months (+7% from -33% in May).
- Wholesalers saw sales fall at a somewhat faster pace than last month (-30% from -22%) but expect an easing in the decline in the year to September (-18%).
- Motor traders posted their second consecutive month of growing sales (+32% from +18%), with another rise expected next month (+17%).
IHS Markit's influential Purchasing Managers Index (PMI) for manufacturing reported a strong rebound for August.
Thanks to the easing of lockdown restrictions, output rose but this has not stabilised the labour market as August saw the seventh consecutive monthly fall in manufacturing headcount. Manufacturing employment fell at one of the steepest rates since the last recession, across all industries and in SMEs and large industries alike.
Indeed have more analysis of their job ads, this time to 21 August. Job posting counts are slowly improving but are still down 53% on this time last year. Lower wage jobs were hit harder in the initial phase of the crisis, but the gap versus higher wage jobs has been narrowing. This is likely to in part reflect the reopening of sectors like hospitality, leisure and consumer services which have high numbers of lower-paid services jobs. Indeed also speculate that uncertainty is reducing employer appetite for higher paid staff at the moment.
Was this page useful?
Thank you for your feedback