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UK graduate labour market update: 13 July

July 2021

There was more things happening last week than, well, you know. Charlie Ball's regular summary of data and reports from the labour market, brought to you by Prospects Luminate and Jisc Data Analytics

The latest round of the ONS fast response experimental statistics on the impact of COVID were released on the 8th July.

  • 5% of the UK workforce were furloughed last week - this is approximately 1.2 million people.
  • 26% of the workforce worked solely from home last week.
  • The proportion of all UK businesses (excluding those permanently ceased trading) who reported that they do not expect to make redundancies in the next three months was 80% in mid to late June 2021.
  • On 2 July 2021, the total volume of UK online job adverts was 135% of its February 2020 average level.
  • In the week to 3 July 2021, overall retail footfall in the UK was at 72% of the level seen in the equivalent week of 2019; footfall at retail parks continued to be much higher than at shopping centres and high streets relative to their 2019 levels.

The Recruitment and Employment Confederation (REC), KPMG and IHS Markit have issued their latest Report on Jobs.

In the period of 11-24 June:

  • Permanent staff appointments expanded at the quickest rate since the survey began in October 1997, while temp billings growth hit the highest for nearly 23 years.
  • Improved demand for workers contributed to an unprecedented fall in the availability of candidates in June. Data showed that the supply of both permanent and temporary staff fell at the quickest rates on record. Recruiters noted that increased hiring, Brexit, pandemic-related uncertainty and the furlough scheme all weighed on candidate numbers.
  • A sharp rebound in demand for labour and a notable fall in the supply of workers led to further rapid increases in both starting salaries and temp pay. Permanent starters' salaries rose at the sharpest rate since July 2014, while hourly rates of pay for short-term staff increased at the fastest pace since October 2004.
  • Substantial increases in permanent placements were recorded across all four monitored English regions, with growth led by the Midlands.
  • Vacancies expanded at stronger rates across both the private and public sectors. The steepest increase in demand was seen for permanent private sector staff, closely followed by temporary private sector workers. Nonetheless, growth of demand for staff was also historically strong across the public sector.
  • IT and Computing led a broad-based expansion of demand for permanent staff during June, ahead of Hotel and Catering and Engineering. The slowest, but still sharp, growth was signalled for Nursing/Medical/Care.

Here is the Quarterly Recruitment Outlook for British Chambers of Commerce.

This is a survey of over 5,700, primarily small, firms.

  • 52% of respondents overall attempted to recruit in Q2, up from 40% in Q1. 51% of hotel and catering firms attempted to recruit in the quarter, up from only 20% in Q1. The sectors with the highest proportion of firms attempting to recruit were production and manufacturing at 64% and construction at 63%, these were up from 50% and 54% respectively in the previous quarter.
  • Of those attempting to recruit, the percentage of firms facing recruitment difficulties rose sharply to 70%, up from 63% in Q1. The sector with the highest proportion of firms reporting difficulties was construction at 82%, followed closely by hotels and catering at 76%. Of respondents in production and manufacturing, 68% reported difficulties in recruitment. Consumer services firms were the least likely to report difficulties but even in that sector the proportion facing issues was 61%.
  • Of the firms facing difficulties, the types of roles they struggled to fill, varied by sector. High proportions of respondents from construction and production and manufacturing firms both expressed difficulty in filling skilled technical roles, 65% and 62% respectively. However, 42% of production and manufacturing respondents also expressed difficulty filling un-skilled roles, while 53% of construction firms said the same of managerial roles.
  • Among retail firms 43% cited issues with skilled roles, 39% with managerial jobs and 35% with un-skilled roles. For professional services and marketing and media firms the difficulties were overwhelmingly with managerial roles, cited by 69% and 60% respectively. While a lot of the headlines have, with good reason, highlighted a shortage of blue-collar workers, there is also a significant issue with the supply of graduate-level workers to the economy at present.
  • 38% of businesses surveyed said they expected to grow their workforce in the next 3 months, an 11-point rise from the previous quarter. 5% expected a decrease, a drop from 9% in Q1. The sector with the highest proportion expecting workforce growth was construction at 51%, up from 34% in Q1. 39% of production and manufacturing firms reported expecting growth.

Smaller businesses and employers in lower wage, lower productivity sectors (including retail and hospitality) are less likely to provide training and investment in training has fallen most in these sectors.

The Learning and Work Institute have released a new report looking at employer investment in skills and training.

  • Employer investment in skills was declining prior to the pandemic and wider trends raise questions over the quality and impact of some training. Employers invested £42 billion (including the wage costs of those on training) in skills in 2019 and 61% of employers provided training, a higher proportion than in many European countries. However, this proportion and total investment in skills has been falling after a decade of low growth following the financial crisis and recent economic uncertainty.
  • The training cost per employee was £1,530, half the EU average and the number of days spent training lower at its lowest since 2011. More than 1 in 10 employers providing training only provided basic induction or health and safety training, and fewer than 20% of all employers provide management training.
  • There would be another 20million training days (on top of the 99 million delivered in practice) if training had stayed at 2011 levels, and an extra £6.5 billion invested each year if investment per employee rose to the EU average.
  • Smaller businesses and employers in lower wage, lower productivity sectors (including retail and hospitality) are less likely to provide training and investment in training has fallen most in these sectors. By contrast, higher value, more knowledge intensive sectors have increased investment in training. An extra 1.2 million people would receive training each year if people with low qualifications were as likely to participate in training as those qualified to degree-level.
  • Employer investment in training has fallen more sharply during the pandemic than in the financial crisis. Based on surveys of firms' plans, it is more likely to have fallen relative to the US and EU countries. Reflecting the impacts of government restrictions, consumer services firms (including travel and hospitality) were twice as likely to report a decline in training expenditure than other service firms. Young people - who have borne the brunt of the employment crisis - have also seen large falls in training during the pandemic, particularly those working in the private sector. The fall in apprenticeship starts is also likely to disproportionately impact young people from disadvantaged backgrounds who are more likely to take part in apprenticeships at lower levels. Participation in training also fell further among skilled trades workers and plant and process operatives.

The Social Market Foundation have been looking at attitudes to a four day week.

  • UK workers currently work an average of 36.5 hours per week. However, substantial numbers work more than this.
  • 31% of workers report working more than 41 hours per week, with 12% working more than 48 hours. 39% are either underworking or overworking.
  • Low paid workers are currently more likely to work fewer than 32 hours per week (50% in the lowest pay quintile) and many workers need and want to work more.
  • White collar workers and those in top paying jobs are happiest to reduce their working hours even if it means less money. By contrast, care and hospitality staff are amongst those who would rather work for longer than they currently do.
  • 15% in professional occupations and 14% of managers, directors and senior officials would be willing to work less at a lower salary, but 17% of sales, customer service and elementary employees want to work more.

When it comes to working patterns, adults in Gen X - aged 40-54 - are almost twice as likely to prefer full-time home working as those in Gen Z, aged 18-24

Aviva have been tracking attitudes of employees of large (1000+ employees) to work during the pandemic. This is a really interesting piece of work.

In general:

  • 35% of employees feel their work/life balance has improved during the pandemic, but 20% have been negatively impacted.
  • 52% believe the boundaries between their home and work life are becoming increasingly blurred and 44% feel they can never switch off from work as many employers are seen to encourage an always-on, ever-present culture.
  • Women are more concerned about burnout and less likely to feel hard work entitles them to take 'me' time back during office hours.

Women are:

  • More likely to report a negative impact on their work/life balance (24% vs. 16% of men).
  • More concerned about the risk of work-related burnout (46% vs. 35% of men).
  • More likely to feel life has become more challenging over the last six months (77% vs. 72% of men).
  • Less likely to feel hard work entitles them to claim back 'me' time during work hours (64% vs.72% of men).

The report also found that:

  • Diverse preferences emerge on hybrid working, putting pressure on employers to tailor their response.
  • 69% of employees say flexible working will play a more important part in future job/career choices. This increases to 76% among those aged 18-44.
  • 64% think complete flexibility around their working hours will make them more productive.
  • 47% have become less career focused as a result of the pandemic, up from a third (36%) in August 2020.
  • When it comes to working patterns, adults in Gen X - aged 40-54 - are almost twice as likely to prefer full-time home working as those in Gen Z, aged 18-24 (15% vs. 8%).
  • More than one in three (34%) adults in Gen Z rank the social aspect of being with or around other people at work as their number one priority. This compares with just 20% across all age groups.
  • In contrast, adults in Gen X aged 40-54 cherish work-life balance more than any other age group, with nearly half (47%) stating this is their single biggest priority.
  • Gen Y - adults aged 25-39 - are the most likely age group to put a premium on peace of mind and good mental wellbeing: 33% make this their top priority, compared with 25% overall.
  • Gen-Z, aged 18 to 24 was the most likely to disagree they will look to work from home more in the future (27% vs. a national figure of 21%). In contrast, two thirds (66%) of Gen-Y and three fifths (59%) of Gen-X are keen to embrace 'much more' home working in future.

When employees were asked to rank the importance of employer behaviours, their top three priorities were:

  1. Clarity of what is expected of them in their role (62% expect, 36% get).
  2. Receiving a realistic expectation on how secure their job is (57% expect, 32% get).
  3. Feeling as if they can switch off when they are not supposed to be working (55% expect, 29% get).

As the data shows, employers are a long way from meeting the expectations of their employees.

Aviva also identify 4 types of employee:

  • Resilient Completers, who are disciplined, organised and confident - good under pressure but like a clear path with little unpredictability.
  • Impulsive Worriers who are strongly motivated but less organised and resilient and need emotional support.
  • Apprehensive Achievers who are determined and disciplined but can struggle when under pressure.
  • Spontaneous Survivors who work well under pressure and in fast moving situations - can lack attention to detail.
  • 74% of Resilient Completers rate their financial health as 'good' vs only 48% of Impulsive Worriers.
  • Only 28% of Resilient Completers agree that their financial situation negatively impacts their mental health compared with 50% of Impulsive Worriers.
  • Resilient Completers (11%) are at least half as likely to report job dissatisfaction than all other types (20-25%).
  • Impulsive Worriers nearly are half as likely to feel comfortable with their job security (33%) compared with Resilient Completers (60%), while the other two types are in the middle (41-42%).

Indeed have an update on job postings to the 2 July.

  • Job postings were 11% above the 1 February, 2020, pre-pandemic baseline.
  • In contrast to the improvement in the overall trend, the food preparation and service category saw a deterioration in the latest fortnight. This category has seen very strong growth in recent months as hospitality reopened.
  • Community and social service, construction, hospitality and tourism and software development also saw slight reversals in job posting trends. However, with the expectation of hospitality and tourism, they remain well above pre-pandemic levels.
  • Physicians and surgeons, social science, chemical engineering, security and public safety, customer service and medical information saw improvements over the latest fortnight.

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