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:
- The economy is improving, but we're a long way from where we were at the start of the year and a prolonged return to lockdown will be a blow to small businesses and sectors like culture, retail and hospitality that have already had a hard time.
- The level of vacancies is running at just over 50% of normal rates and seems to be climbing - slowly.
- The graduate labour market has suffered significant damage, particularly in the arts - which may be the worst-affected sector in the UK. 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.
- It looks like there'll be a two-track recovery (US economists are calling it 'K-shaped', with some sectors, particularly those where remote working is effective, recovering rapidly and others slowly. As most of the rapidly-recovering sectors are highly graduate this may exacerbate the already serious social and economic divides in the country.
- 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.
- Undergraduate students have shown up for the start of term in large numbers but COVID outbreaks and lockdown restrictions are affecting morale, and mental health and dropout rates are concerns. But we must also be mindful that young people not in employment have very few alternative options at the moment.
- Postgraduate interest is strongly 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. 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.
- London seems to be taking a particular hit, with footfall and vacancies well below normal levels. It remains a very strong graduate economy though.
- Many employers are at least discussing recruiting in Q3 and Q4 if conditions permit after missing the normal recruitment round earlier in the year. Others have decided to wait until 2021 though.
The hardest hit groups are migrants, informal workers, young workers and women.
GDP grew by 2.1% in August 2020, but it remains 9.2% below the February 2020 level
- The ILO have a global view of the impact of COVID-19 on labour markets around the world.
- 94% of the world's workers currently live in countries with some sort of workplace closure measure in place.
- 12.1% of working hours were lost in Q3 2020, equivalent to 345 million full-time jobs.
- 8.6% of working hours are projected to be lost in the fourth quarter of 2020, equivalent to 245 million full-time jobs.
- The hardest hit groups are migrants, informal workers, young workers and women.
Skills Development Scotland have a rather good series of reports on the Scottish experience – here is September's.
And here's the GLA’s September report for London.
People Management continue their liveblog on employer actions in the pandemic.
The ONS have issued their biweekly report on the impact of COVID-19 on the economy.
- 86% of businesses were currently trading up to 20 September.
- 9% of the workforce were on partial or full furlough leave.
- 28% of the workforce were working remotely instead of at their normal place of work.
- 59% of the workforce were working at their normal place of work.
- 74% of IT and comms and 62% of professional services employees were working remotely.
- 72% of manufacturing and health and social care employees were at their normal place of work.
- IT and comms businesses were the most likely to still have paused trading, with 25.5% of businesses (do bear in mind that there are a lot of SMEs in this group).
- 13.5% of microbusinesses (up to 9 employees) are still paused.
- No health and social care businesses appear to still be paused.
- 43% experienced a decrease in profits compared with what is normally expected for this time of year.
- 34% experienced no impact on profits.
- 7% experienced an increase in profits compared with what is normally expected for this time of year.
Across all industries, of businesses not permanently stopped trading and that reported more staff working from home:
- 12% experienced an increase in productivity
- 52% experienced no impact on productivity
- 24% experienced a decrease in productivity
Of businesses not permanently stopped trading across all industries:
- 19% intend to use increased homeworking as a permanent business model in the future.
- 67% do not intend to use increased homeworking as a permanent business model in the future.
Education, IT, professional, scientific and tech, and water supply, sewerage and waste management are the most likely industries to say they will have increased homeworking.
Of businesses intending to use increased homeworking as a permanent business model in the future, 60% reported it was because of improved staff wellbeing, 55% reported it was because of reduced overheads, and 34% reported it was because of increased productivity.
Across all industries, of businesses not permanently stopped trading:
- 4% had no cash reserves.
- 24% had less than three months' cash reserves.
- 51% had more than three months cash reserves.
The accommodation and food service activities industry had the highest percentage of businesses that had no cash reserves, at 6%.
Conversely, the information and communication industry and the education industry (private and higher education businesses only) had the highest percentages of businesses that had cash reserves to last more than six months, at 43% and 42% respectively.
12% of businesses currently trading had low confidence that their business would survive the next three months. The water supply, sewerage, waste management and remediation activities industry and the accommodation and food service activities industry had the highest percentages of businesses that had low confidence their business would survive the next three months, at 37% and 25%, respectively.
The ONS also have reporting on the social impacts of COVID-19 to 8 October.
26% of people are casually looking for a new job or project work and 30% - while not actively looking - are open to the right offer.
Between 25 September and 2 October 2020, total online job adverts increased from 59% to 61% of their 2019 average.
PWC recruited a record number of graduates in Scotland this year despite COVID.
The Institute of Employment Studies have analysed September job vacancies on Adzuna, to 21 September.
- There were 182,000 new vacancies notified in the week to 21 September, up from the average of 150,000 in August, but 25% lower than the equivalent week last year.
- The overall level of vacancies at 13 September was 517,000.
- The devolved nations and the North East of England have the lowest ratio of vacancies per capita, while London and the South East of England have the highest ratios.
- However, London and the South East are also the regions that experienced the highest decline between March and September.
- Jobs have increased in all categories since July, apart from teaching; customer services; and legal related professions
- The level of vacancies now exceeds the levels reported in March in logistics and warehouse; manufacturing; and domestic help and cleaning.
Indeed have their regular analysis of vacancies, this time to 2 October.
Vacancies continue a slow but steady recovery and now stand at about 54% of the usual level - in line with other data sources. Roles with the greatest improvement since 4 June include construction, production and manufacturing, chemical engineering, medical technician and sports.
London is seeing the weakest recovery.
Indeed have also started hosting their data on Github, so if you want to dig into data from a number of countries (presently I see Australia, Canada, UK, Ireland, US and Germany) then get them here.
LinkedIn report that a third of UK professionals are actively looking for a new job (although do remember that this is a survey of people on LinkedIn):
- 26% of people are casually looking for a new job or project work and 30% - while not actively looking - are open to the right offer.
- 10% said they expected the number of new jobs available to increase in the following two weeks, while 25% expected it to fall.
- Only three industries are showing greater levels of confidence in this edition than they did in August - retail, corporate services and construction.
- All other industries experienced a decline in confidence - the biggest decreases were among those working in the non-profit, consumer goods and finance industries.
- Retail, software & IT services, finance and construction workers anticipate strong, steady improvements in their companies over the next six and 12 months. The least optimistic about the future of their companies are those in the education, non-profit, healthcare and manufacturing sectors.
The IPPR are concerned that the new Job Support Scheme (JSS) and Job Retention Bonus (JRB) may save only 11% of viable jobs.
They estimate that only workers on monthly wages between £625 and £987 would benefit. This is because people with monthly wages below £625 do not qualify for the JRB. And the JRB received by the employer for employees paid more than £987 a month is too small to make it economical to hold on to workers on a part-time basis.
The Economics Observatory have updated their report on which parts of the UK have been most affected by COVID-19. There's a wealth of claimant count, footfall and other data to give a series of analyses looking at how different areas have been impacted.
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