UK graduate labour market update: 10 May

Charlie Ball's labour market update, brought to you by Prospects Luminate and Jisc Data and Analytics, highlights our own report on student work experience during the pandemic and further research on the impact of COVID-19 on SMEs

The latest round of the Office for National Statistics (ONS) fast response experimental statistics on the impact of COVID were released on the 6 May - it's slightly reduced because of last week's bank holiday:

• 31% of the workforce worked solely from home last week.
• 81% of workers in IT and communications, and 71% of workers in professional, scientific and technical activities worked solely remotely last week.
• 13% of the workforce were on partial or full furlough leave.
• 40% of workers in the arts and recreation were on furlough leave last week.
• The wholesale and retail trade industry expects the highest percentage of its workforce to return from furlough to the normal workplace in the next two weeks, at 29%.
• Of businesses not permanently stopped trading, 24% intend to use increased homeworking as a permanent business model in the future, while 28% are not sure.
• 49% of IT and communications business and 43% of businesses in professional, scientific and technical activities have already decided to make increased homeworking a permanent part of their business model.
• 61% of businesses in construction and 53% of businesses in manufacturing have already decided that they will not be using increased homeworking. More than half of businesses in health and social care and arts and entertainment have also reached this conclusion.

Prospects at Jisc have conducted research into student work experience during the pandemic:

• 17% of students had undertaken work experience in the last 12 months.
• Lack of work experience was the main struggle for job-seeking university students. 
• Around three quarters of students found work experience useful in developing their skills. 
• Paid, longer-term and face-to-face experiences were most useful. 
• Despite the pandemic, work experience was predominantly face-to-face.  
• The majority of student work experience was unpaid.

The final report from the Workplace Training and Development Commission (WTDC), set up by the British Chambers of Commerce in partnership with Indeed, reveals:

• Many SMEs lack the HR capacity and business transformation resources to properly identify, articulate and plan for current and future workforce development needs. Some do not recognise and utilise the existing skills of their people and fail to maximise a return on investment from recruitment and training activity.
• Employers find that some people in the workplace lack the basic skills and confidence to apply for training and job progression opportunities, and managers often struggle to engage these colleagues in skills training and development opportunities. This acts as a brake on productivity and in-work progression.
• Innovation is being stymied by shortages of basic and higher-level digital skills.
• Few employers understand how to use the skills system to access the training they need. It is perceived as unresponsive, unstable, complex and bureaucratic. For some, there is still a lack of trust in the quality and relevance of the training on offer.
• Employer-led apprenticeship standards are highly valued across all business sizes and sectors, helping to raise the prestige of vocational routes to employment and resolve skills shortages in local communities. However, apprenticeships are not the solution to all adult workplace training and development needs.
• The emphasis in the system on funding full, rigid qualifications for adult learners can discourage both employers and employees from engaging in training activity.
• A fragmented system at the local level creates barriers to the successful planning, funding and delivery of skills and the ability to align skills planning and delivery to local economic strategies.

The Institute of Directors have surveyed 600 business leaders to get their views on hybrid working:

• 44% of businesses expect workers to work remotely for 2 or 3 days a week.
• 11% expect full remote working.
• 19% do not expect to adopt remote working.

The latest KPMG and REC Report on Jobs survey, compiled by IHS Markit, has been released:

• Permanent vacancy growth outpaced that seen for temporary roles, with the former rising at the quickest rate since March 1998 and the latter to the greatest extent since October 2014.
• After broadly stabilising in March, the availability of candidates fell in April, and at the sharpest rate since January 2020. Reduced candidate supply was often linked to ongoing pandemic-related uncertainty preventing people from seeking new roles. There were also mentions that Brexit, IR35 legislation and furlough had reduced the pool of available candidates.
• Skill shortages and improved demand for staff led to further increases in starting pay for both permanent and temporary staff. Starting salary inflation hit a 14-month high, while temp pay growth improved to its best for a year-and-a-half.
• Demand for staff continued to rise at a particularly sharp pace in the private sector during April, with permanent vacancies registering a more marked increase than that for temporary roles.
• IT & computing saw the steepest increase in permanent staff vacancies in April, followed by accounting/financial and engineering. Retail was the only sector to register lower demand for permanent staff, though the decline was only modest.
• All of the ten monitored job categories recorded higher demand for temporary staff in April except for retail, which noted a marginal reduction. Blue collar and construction registered the strongest rises in demand for short-term workers.

Xero and Accenture have released a report on the COVID recovery in SMEs in Australia, Canada, New Zealand, United Kingdom and the United States:

• In Australia, small business jobs fell 10.1% year-on-year in April 2020, at the start of the initial lockdown period. But from mid-May 2020, when operating restrictions started to ease, small business jobs began to gradually rebuild. This jobs recovery continued through the second half of 2020 and into 2021 and by March 2021 small business jobs were 5.3% higher than March 2020.
• In New Zealand, jobs losses were not as pronounced as in Australia. Jobs fell 8.5% y/y in April but then began to steadily recover over the remainder of 2020 and in March 2021 were 3.7% above March 2020 levels.
• In the United Kingdom, three periods of national lockdowns has meant that small business jobs followed a very different trajectory to Australia and New Zealand. Small business jobs collapsed to be down 24.4% y/y in May 2020 during the first national lockdown. They recovered somewhat in the northern summer to be down 9.0% y/y in August. Since then ongoing lockdowns have limited a more substantial jobs recovery. In March 2021 small business jobs were still 8.6% below March 2020 levels.
• The UK needs 410,000 SME jobs to return to pre-pandemic levels.

Written by

Charlie Ball

Head of higher education intelligence

Prospects