Head of higher education intelligence, Charlie Ball, provides his regular update on the graduate labour market - summarising the key highlights from the week's news, data and research
Welcome to the latest instalment of our round-up of the week's UK's graduate labour market developments, brought to you by Prospects Luminate at Jisc.
The latest update on the effects of COVID-19 on the UK economy from the ONS was released on 7 January - covering the Christmas and New Year period:
- 11% of the workforce is currently furloughed.
- 56% of the workforce was working at their normal place of work.
- 26% of the workforce worked exclusively from home.
- 79% of businesses had been trading for more than the last two weeks.
- 11% of businesses had paused trading and do not intend to restart in the next two weeks.
The Recruitment and Employment Confederation (REC) and KPMG have issued the results of their December Report on Jobs survey:
- Total demand for workers improved for the first time since September, albeit only slightly. The upturn was predominantly driven by an increase in temporary vacancies. Demand for permanent staff expanded only marginally.
- UK recruitment consultancies signalled a tentative improvement in pay trends for both permanent and temporary workers in December. Starting salaries and temp wages both increased for the first time since March.
- Redundancies related to the pandemic and fears over current job security drove a further marked increase in the availability of both permanent and short-term staff in December.
- The South of England, the Midlands and the North of England all registered marked increases in temp billings. London was the only monitored English region to see a fall, which extended the current period of decline to 12 months.
- Vacancies for both permanent and temporary staff in the private sector rose during December. The increase in demand for permanent staff was modest overall, while temp roles expanded sharply. In contrast, demand fell for both permanent and temporary staff in the public sector, with the former noting the steeper rate of decline.
British Chambers of Commerce have produced results from their Q4 Quarterly Economic Survey of 6,203 firms:
- 79% of hotels and catering firms reported a decrease in domestic sales in Q4, worsening from 66% in Q3.
- Cash flow continued to deteriorate for 43% of firms overall.
- Overall, indicators remained weak in Q4, with only moderate improvement compared to Q3 and still well below the pre-COVID-19 trend.
- Nearly half of firms (43%) reported decreases in domestic sales, broadly unchanged from 46% in Q3.
- 26% of firms reported an increase in domestic sales. 30% reported no change.
- 45% of firms reported a decrease in domestic orders, while 33% report no change, and 22% report an increase.
- 38% of firms reported decreases in export sales, down slightly from 45% in Q3 but still substantially worse than pre-pandemic levels, where only around 20% of firms reported a decrease.
- 35% of firms report decreased investment in plant, machinery and equipment.
- 48% expected no change in plant, machinery and equipment investment. 17% of firms plan to invest.
- 40% of firms said they expected their turnover to increase over the next 12 months, while a 34% still expected it to decrease. 25% expected that it would stay the same.
Gender and ethnicity pay gaps are expected to increase in 2021, potentially reversing a decade of progress.
The Federation of Small Businesses have published the results of their latest Small Business Index:
- Just under 5% of the 1,400 firms surveyed for the study say they expect to close this year.
- The UK SBI confidence measure stands at -49.3, down 27 points year-on-year. The reading is the second-lowest in SBI history, second only to that recorded in March 2020. The vast majority of those surveyed (80%) do not expect their performance to improve over the next three months.
- 23% of small firms have decreased the number of people they employ over the last quarter, up from 13% at the beginning of last year. 14% say they’ll be forced to cut numbers over the next three months. BEIS estimates that 16.8 million people work in smaller firms across the UK.
- The proportion of small businesses forecasting a reduction in profitability for the coming quarter has spiralled over the past year, rising from 38% to 58%.
- 49% of exporters expect international sales to drop this quarter, up from 33% at this time last year.
PWC have produced their 2021 UK and Global economic outlook:
- PWC expect the health, social and economic effects of the pandemic to result in a 'baby bust', where the postponement of pregnancies during the pandemic translates into a dramatic decline in birth rates in 2021.
- London's population is expected to decline for the first time in the 21st century.
- Net migration with the EU could turn negative in 2021.
- Despite tentative signs of an economic recovery in 2021, PWC expect to see the unemployment rate jump by a record 2.5 percentage points in the second quarter, as the government's furlough scheme comes to an end.
- Gender and ethnicity pay gaps are expected to increase in 2021, potentially reversing a decade of progress as women and people from BAME backgrounds are overrepresented in the sectors that have been most affected by social distancing restrictions.
- The labour market remains under pressure. In the three months to October, redundancies set a new record high - rising by a record 217,000 on the previous quarter to 370,000. Despite the tightening of restrictions in October, total hours worked continue to recover, increasing by 12% in the quarter.
The manufacturing trade body Make UK teamed up with PWC for their Executive Survey 2021:
- The UK is the world's ninth largest manufacturing economy.
- Manufacturing makes up 9% of UK GDP.
- 47% of the manufacturing workforce is doing some form of remote working.
- 43% of manufacturers said they will explore how to keep remote working where possible.
- 48% expect business conditions in manufacturing to improve in 2021.
- 44% of manufacturers are expecting to moderately or significantly increase the number of their permanent staff in 2021.
- 42% of companies are looking to invest in green technologies in an effort to reduce emissions and acknowledging that it is the right thing to do for future generations.
- 44% of manufacturers are planning on investing in training, to help to boost productivity.
- 38% expect to increase investment in apprentices.
- 47% of manufacturers see customs delays as their biggest risk. 46% say further lockdowns.
- 52% reported concern that the impact of the UK leaving the EU will either somewhat or substantially decrease our ability to attract international talent.
52% of workers agree the boundaries between their work and home life are becoming increasingly blurred.
The Financial Conduct Authority (FCA) has published the results of its COVID-19 financial resilience surveys. The surveys were sent to solo-regulated firms to inform the FCA of the impact of coronavirus on firms' financial resilience.
- Around 4,000 financial services firms are at risk of collapse due to the economic impact of the pandemic.
- 49% of the firms surveyed reported that the impact of coronavirus would be neutral, with 46% reporting a negative impact. Less than 5% of firms reported a positive impact.
- The sector with the least negative outlook was Investment Management, with 73% of firms expecting a positive or neutral impact from coronavirus on their business model and 27% expecting a negative impact. The most negative outlook was in Retail Lending where 42% of firms were positive or neutral and 58% were negative.
A survey of 2,000 UK workers by Aviva and Robertson Cooper found that introverts and young workers are the demographics most in need of tailored approaches to wellbeing.
- 52% of workers agree the boundaries between their work and home life are becoming increasingly blurred - up from 40% in February.
- 43% of employees describe their wellbeing as being less than good and 84% say that they would carry on working even if they felt unwell.
- 26% agree their employer is genuinely concerned about their wellbeing.
- 25% of employees felt they were unprepared financially for unexpected events in the future, such as serious illness, accident, or redundancy. Heightened anxiety has led to employees working longer hours and taking fewer sick days, all the while becoming less fulfilled by work and life.
- Those who are coping better with lockdown across their mental wellbeing, lifestyle and health and work satisfaction tend to naturally be more emotionally resilient and optimistic.
- 18 to 25-year-olds are most likely to feel some degree of anxiety (53% reported feeling some degree of anxiety vs. a national average of 34%) and are the most likely to rank their mental health as bad (17% vs. an average of 11% across all age groups).
- Both office-based and manual workers (77% and 53% respectively) have a greater desire for flexible working
And AGCAS and Prospects have updated all 100 What can I do With my degree? titles, with data from the Graduate Outcomes survey. The series examines the options available with a wide range of university subjects of study.
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