UK graduate labour market update: 14 December

Charlie Ball's regular summary of data and reports from the graduate labour market, brought to you by Prospects Luminate and Jisc Data Analytics

One in six graduates from 2019 working in roles not classified as being professional level nevertheless stated that their job fitted into their career plans or was exactly the type of work that they wanted. Much the most common roles for graduates stating this was classroom assistant or care worker.

Reasons,Percentage of graduates
In order to earn a living,43
It fitted into my career plan/it was exctly the type of work I wanted,16
To gain and broaden my experience in order to get the type of job I really want,15
It was the best job offer I received,9
It was an opportunity to progress in the organisation,5
It was the right location,4
To see if I would like the type of work it involved,3
The job was well paid,3
To work in my family business,1
In order to pay off debts,1

UK GDP is estimated to have grown by 0.1% in October.

• Gross domestic product (GDP) is estimated to have grown by 0.1% in October 2021 and is 0.5% below its pre-coronavirus (COVID-19) pandemic level (February 2020).
• Services output grew by 0.4% in October 2021, with the most significant contribution coming from human health activities, which grew by 3.5%, mainly because of a continued rise in face-to-face appointments at GP surgeries in England.
• Services output overall has now reached its pre-coronavirus pandemic level (February 2020); consumer-facing services are 5.2% below their pre-pandemic levels, while all other services are 1.4% above.
• Output in consumer-facing services grew by 0.3% on the month mainly because of an 8.1% increase in the wholesale and retail trade and repair of motor vehicles and motorcycles sector, while all other services rose by 0.4%.
• Production output decreased by 0.6% in October 2021, with electricity and gas down by 2.9%, and mining and quarrying down by 5.0%.
• Construction contracted, with output down by 1.8% in October 2021, the largest fall since April 2020; the sector is now 2.8% below its pre-pandemic level.

The latest round of the ONS fast response experimental statistics on the impact of COVID were released on the 9 December.

• 14% of businesses currently trading reported a shortage of workers between 1 and 23 November. 38% of accommodation and food services businesses, 25% of organisations in health and social care and 22% of manufacturers reported worker shortages.
• The total volume of online job adverts on 19 November 2021 was unchanged from the previous week at 144% of its February 2020 average level. Law is the only sector still below February 2020 levels. In major graduate employers, HR and recruitment and manufacturing have more than double their pre-pandemic vacancies.
• There were 13,944 company incorporations in the week to 3 December 2021, a 2% increase from the previous week and 15% higher than the equivalent week of 2019 (12,119).
• There are 2.6% fewer jobs in UK SMEs than the same time 2 years ago. The graph below gives more detail.

More from the regular ONS survey of student well-being.

This covers the period from 19 to 29 November.

• The majority (90%) of students said they had already been vaccinated against coronavirus (COVID-19) at least once; similar to early November (89%).
• Half (50%) of students reported taking a COVID-19 test in the last 7 days.
• When asked if they think they have had COVID-19 at some point during the coronavirus pandemic, 20% of students said yes and that this was confirmed with a positive test.
• The average life satisfaction score for students was 6.7, which was significantly lower than the adult population in Great Britain (7.1), but was not any different to the 16- to 29-year-old age group (6.7).
• The proportion of students feeling lonely often or always was 14%, significantly higher than the adult population in Great Britain (6%), but not significantly different to the 16- to 29-year-old age group (10%).
• Less than a third (28%) of students reported that their mental health and well-being had worsened since the start of the Autumn 2021 term, similar to early November (30%).
• Of students who were enrolled in an educational institution during the 2020/21 academic year, 43% indicated that their academic performance has been better since the start of the Autumn 2021 term compared with the previous academic year.

HESA have released a piece of work examining job quality at a regional level

This analysis uses the graduate voice questions in the Graduate Outcomes survey, designed to find measures of graduate success which take into account graduates' own views of their experiences. HESA calculated scores for graduates working in that region, separated into those who were living in that region before entering higher education ('stayers'), and those who lived elsewhere ('movers').

• HESA derived fair work scores (calculated as the average of each graduate's responses to the three graduate voice questions).
• Movers score higher than stayers by the new measure in every region but Northern Ireland, where stayers score slightly higher.
• The magnitude of the difference varies, however, as do the overall fair work scores for movers and stayers in each region. In Scotland, Wales, and Northern Ireland, differences between movers and stayers are relatively small and are not statistically significant. Stayers in Scotland, Wales, and Northern Ireland, moreover, have relatively high fair work scores when compared to stayers in many other regions.
• Stayers also score relatively highly in the North East and Yorkshire and the Humber, and the difference between movers and stayers in Yorkshire and the Humber is not statistically significant.
• Movers to the West Midlands, the East of England, London, and the South East, however, score much higher than stayers in those regions, with movers to the West Midlands having the highest fair work scores of any group.
• Overall, fair work is available across the UK, but moving to a new region in search of work, which may indicate a more active decision to work in a certain place, seems in most regions to be correlated with higher quality employment.

REC and EMSI have released the Jobs Recovery Tracker for November.

• 210,000 new job adverts were posted in the UK last week, after three of the best weeks for new adverts on record - over 270,000 new adverts were posted in the first week of November.
• There were 3.51 million active job adverts last week, another new record high as firms take longer to hire.
• The most significant rise was for prison officers (+21.0%), continuing the trend seen throughout November.
• Other roles with a notable increase in adverts were scaffolders (+6.9%), dentists (+4.5%), vets (+4.5%) and veterinary nurses (+3.8%).
• The education and training sector also saw a number of roles with strong increases in adverts, including school secretaries (+4.9%), careers advisers (+3.5%), and special needs teachers (+3.4%).
• Notable decline in adverts for management roles in the hospitality sector, including publicans, restaurant and catering managers, and hotel and accommodation managers.

REC's Jobs Outlook for November 12-24 has also been published.

• Robust demand for workers and efforts to fill vacancies drove a further strong increase in hiring activity for permanent roles during November. Permanent placements rose at a sharper rate than in October, the fifth-quickest on record, and one that continued to outpace that seen for temp billings.
• Underlying data indicated that both permanent and temporary vacancies increased at slightly softer rates compared to October.
• Latest data indicated that the downturn in candidate availability eased to its weakest since May during November. Slower, but still rapid, falls were signalled for both permanent and temporary candidates, with recruiters often linking this to continued uncertainty around the pandemic, greater demand for staff and Brexit.
• November data signalled that growth of demand remained considerably stronger for private sector workers than public sector staff. The steepest increase in vacancies was recorded for permanent roles in the private sector, while the softest upturn was seen for permanent staff in the public sector.
• IT and computing posted the steepest increase in demand for permanent staff during November, followed closely by hotel and catering. The softest rise in permanent vacancies was seen in the retail sector.

The OECD have issued a new set of economic forecasts to 2023.

• UK GDP growth is projected at 4.7% in 2022 and 2.1% in 2023.
• Inflationary pressures are proving stronger and more persistent than expected a few months ago. Consumer price inflation in the OECD is now projected to start fading in 2022, before moderating as key bottlenecks ease, capacity expands, more people return to the labour force and demand rebalances. The Outlook underlines the risk that continued supply disruptions, perhaps associated with further waves of COVID-19 infections, may result in longer and higher inflationary pressure.
• Another risk, exposed by the emergence of the Omicron variant in recent days, is a worsening health situation due to COVID-19 resulting in further restrictions that would jeopardise the recovery. The Outlook says ensuring better access to vaccines for all must be an urgent policy priority. A faster, better coordinated, worldwide vaccine roll-out is not only essential for saving lives and preventing the emergence of new variants, but would also help tackle some of the bottlenecks undermining the strength of the recovery by allowing factories, ports and borders to re-open fully.

Also from the OECD, a substantial, quite academic, report on labour market transitions - moves into and out of jobs - across OECD countries.

• Labour market transitions vary significantly from one country to another and also within countries from one socio-economic group to another. Annual worker reallocation rates, defined as the sum of hirings from non-employment or from another job and separations to non-employment over a one year period range from around 30% of employment in Finland and Denmark to around 15% in the Czech Republic and Greece.
• Over the last two decades just preceding the pandemic, hirings and separations exhibited cyclical fluctuations. Nonetheless, one general pattern is a decline in hirings, especially from non-employment, pointing to difficulties in accessing and climbing the job ladder.
• Zooming in on labour market transitions over the great financial crisis provides an illustration of the long-lasting effects and scarring risks associated with recessions on labour market transitions, especially for young people entering the labour market.
• A granular analysis of labour market transitions across different socio-economic groups delivers the following insights:
• Women are much more likely than men to move in and out of jobs. This reflects the unequal burden of family-related work, which contributes to the higher propensity of women to drop out of the labour force.
• Data from the United States that allow to shed light on job ladder effects show that workers changing job exhibit significantly higher earnings growth than workers staying in the same job - around 4 times higher, on average over the last decade. A granular analysis shows that the benefits of job mobility tend to be stronger for youth, the low-skilled and women.
• In all countries, young people are the engine of labour market dynamism: they exhibit much higher levels of hirings from non-employment and job-to-job hirings relative to prime-aged workers, underscoring the importance of job ladders at early stages of workers' careers.
• A focus on labour market transitions associated with temporary and part-time jobs in European countries delivers a mixed picture about the quality of such jobs:
• On average across European countries, more than half of temporary work is involuntary and more than a third of part-time work is involuntary.
• Workers hired under temporary and part-time jobs do not always easily transition to more stable forms of employment. The probability to move to a permanent position is also highly unequally distributed across genders, with men displaying much higher probability than women in almost all European countries.
• On average across European OECD countries for which fully comparable data are available, the annual worker reallocation rate, defined as the sum of hirings and separations over total employment, is around 22%. Almost half of this is accounted for by workers changing job while the rest is equally split between workers being hired from non-employment or separated to non-employment. The vast majority of job-to-job transitions, around 70% on average, occur within the same industry.
• On average across countries, around 12% of students transition from study to employment from one year to the next, ranging from more than 20% in the United Kingdom (which has the highest level of movement of students into employment) and Sweden to less than 5% in Italy and Greece.
• Transitions from study to unemployment and inactivity (other than study) are higher than 10% in Spain and Sweden. In Greece and Italy, students have a lower chance to move into jobs than into unemployment or inactivity.
• The transition from study to unemployment increased by 60% between 2007 and 2014, on average across countries for which data is available. More than two thirds of this increase was between 2008 and 2010. It took more than a decade for the transition from study to unemployment to decline back to its pre-recession level.
• The transition from study to employment declined by around 20% at its trough, on average across countries, and it took a decade for it to come back to pre-crisis levels.
• The early stage of the great recession also saw a spike in transitions from employment to study, as the opportunity cost of training is typically lower when labour demand is weak.
• On average across European countries, slightly more than one third of hirings in 2019 were on temporary jobs, ranging from less than 12% in Latvia, Lithuania and the United Kingdom to more than 60% in Poland, Portugal and Spain.
• On average, hirings on temporary jobs are equally split between hirings from non-employment and from another employer, with some cross-country differences: hirings from non-employment are prevalent in e.g. France and Italy, while hirings from another employer are more prevalent in e.g. the Netherlands and Slovenia. Such differences are likely to partly reflect differences in joblessness across countries, with higher unemployment being associated with higher hirings from non-employment.
• On average across European countries, around 20% of hirings in 2019 were on part-time jobs, ranging from more than one third in the United Kingdom, Switzerland and the Netherlands to less than 10% in the Slovak Republic, Hungary and Lithuania.
• On average across European countries, the hiring rate of young people from non-employment is around 33%, with wide variation across countries, ranging from almost 55% in Finland to around 20% in Slovenia. Hirings of prime-aged workers from non-employment are less than one-fifth of hirings of young people, at around 5% on average, and vary much less across countries.
• Young people tend to experience very high levels of job-to-job mobility, around twice that of mid-career workers, on average across European countries. Job-to-job hirings among young people range from around 25% in Spain, Slovenia and France to around 15% in the Slovak Republic, Italy and Greece. Even where youth mobility is relatively low from a comparative perspective, youth remain far more mobile than mid-career workers, for example almost three times more mobile in Italy.

The Institute of Fiscal Studies most recent report for the Deaton Review of inequality examines the differences between men and women at work.

• The average working-age woman in the UK earned 40% less than her male counterpart in 2019. That gap is about 13 percentage points, or 25%, lower than it was 25 years ago.
• The vast majority of the modest convergence in earnings of the past 25 years can be explained by the closing of the gender gap in education levels. Of the 13 percentage point drop in the gender pay gap, 10 percentage points (or over three-quarters) would have been expected from the rapid catch-up of educational attainment of women, who are now 5% more likely to have graduated from university than men. This suggests that the additional contribution to closing the gender earnings gap from other changes in policy, the economy and society over the past quarter-century has been muted.
• Inequalities in all three components of labour market earnings - employment, working hours and hourly wages - remained large. In 2019, working women still earned 19% less per hour than men. This gap was 5 percentage points smaller than the gap in the mid 1990s, though again women's relative advances in education can account for the majority of the gain.
• Gaps in all three components are linked. The fact that women have more career breaks and years working part-time contributes to them having lower hourly earnings further down the line.
• In a big break from the past, the hourly wage gap between men and women is now bigger for those with degrees or A-level-equivalent qualifications than for those with lower education. It used to be that gender differences in hourly wages were especially large among less-well- educated workers. The introduction of, and increases to, the UK's minimum wage have been an important factor in helping low-paid women. More highly educated women have not made comparable progress.
• Gender gaps in hourly wage rates are especially large at the top, with women failing to reach the same levels of high pay as men. In 2019, women at the top (90th percentile) earned per hour only 77% of what their male counterparts did, while that figure was about 90% for women at the bottom (10th percentile) compared with men at the same level.
• Gender differences in time spent doing paid work are not completely balanced out by the differences in time doing unpaid domestic work. In the UK, working-age women on average do 1.5 fewer hours of paid work and 1.8 more hours of unpaid work per day than men.
• Gender gaps in pay, paid work and unpaid work have substantial consequences for inequalities in material living standards. Women in single-adult families, especially single mothers, are especially vulnerable to poverty. Women in opposite-gender couple families have been found to consume less than their male partners.
• Inequalities in earnings and its three components increase vastly after parenthood. The opening of gaps around childbirth suggests that unpaid care work is central in shaping inequalities in the labour market.
• The gendered roles that mothers and fathers take on appear to be largely unrelated to their relative earnings potential. Even mothers who earn more than their male partners before childbirth are more likely than their partners to reduce hours of work in the years after childbirth.
• The existing policy environment (including parental leave, childcare, and the tax and benefit system) often sustains and incentivises a traditionally gendered division of labour, even when policies are ostensibly gender-neutral. For instance, welfare subsidies that are taxed away with family income will disincentivise the work of a second earner, who is usually the woman. At the same time, policies designed to incentivise a more equal division of labour often have quite muted effects.
• At the level of the whole economy and society, these heavily gendered patterns of paid and unpaid work strongly suggest that the talents of women and men are not being used in the most productive way possible. This means that, overall, the economy produces less (both market goods and services and unpaid care) than would be possible if the talents of women and men were allocated more efficiently.
• Norms, preferences and beliefs appear central to the choices of families. Two-fifths of both men and women in the UK agree that 'a woman should stay at home when she has children under school age'. Internationally, there is huge variation in the proportion of the population who hold traditional gender attitudes. The extent of agreement with such statements is strongly positively correlated with gender gaps in labour market outcomes.

The Government has produced a report looking at COVID-19 health inequalities by ethnicity.

There's a lot in the report, but from a labour market perspective the main factors behind the higher risk of COVID-19 infection for ethnic minority groups include occupation (particularly for those in frontline roles, such as NHS workers), living with children in multigenerational households, and living in densely-populated urban areas with poor air quality and higher levels of deprivation.

Resource Solutions have surveyed 1000 professionals about skills development at their employers.

• 97% of workers were keen to upskill, just 5% said that their employer saw upskilling as essential.
• 51% of those surveyed worry about automation replacing some or all of their jobs, increasing to 63% among directors and C-suite professionals.
• 38% of professionals feel their employers has increased the number of upskilling opportunities for employees, 46% cite no change and 14% have seen a decrease in upskilling opportunities offered by their employer.
• 43% of Gen Z and 40% of Millennials feel the pandemic has changed the skills needed to perform their job, whilst only 26% of Gen X (and 17% of baby boomers feel this way).
• More than a third of Gen Z and Millennials cite career progression as their main motivation for upskilling (33%).
• When asked what types of skills should take priority in an upskilling programme, Gen X (41%) and Baby Boomers (47%) favour digital skills over all others. On the other side, Gen Z (25%) and Millennials (22%) cite interpersonal skills, like persuasion and negotiation as key skills they'd like to develop.

Microsoft UK commissioned YouGov to survey 2,046 UK workers on their views of hybrid working.

• 51% of respondents who had the choice to mix remote and office working would consider leaving their company if this flexibility was removed.
• 53% of UK workers who started a new role since March 2020 onboarded remotely, and that as a consequence, a similar proportion (48%) found it harder to feel part of the company culture.
• Of these new starters - who made up 36% of the total polled – 42% said forming new workplace relationships was a challenge to onboarding, while 21% said the same about immersing into the company culture.
• 38% of HR professionals reported that hybrid working may lead to an inability to retain new talent; 25% cited a negative impact on productivity; while a similar proportion (24%) said there was a negative impact on wellbeing.
• 38% of HR professionals said not having a hybrid model would make it harder to recruit top talent in the long term.

Whilst the CIPD found that most employers think flexible working requests should be a day-one right.

• (57%) of employers agree that the right to request flexible working should be a day-one right. Agreement is highest from those in the public sector (69%) compared to those in the private sector (54%). In addition, larger organisations of 250+ employees were more likely to agree than SMEs (62% compared to 51%).
• Over a third (36%) of organisations already accept requests for flexible working from day one of employment.
• Over two fifths (42%) say they will be more likely to grant requests for flexible working, besides working from home, once pandemic restrictions have been relaxed, compared to before COVID-19, just 7% of employers said they would be less likely to.
• Around three quarters (74%) felt that employers should be required to show that they have considered alternative working arrangements when rejecting a statutory request for flexible working.

This accompanies new guidance on effective hybrid working.

The Omicron variant had not seemed to have much effect on UK vacancies by early December according to Indeed.

• Job postings were 48% above the 1 February 2020, pre-pandemic baseline, seasonally adjusted, as of 3 December 2021.
• Strong demand for staff showed little sign of easing in the run up to the Christmas season, at least before 'Plan B' restrictions were announced in England, where new curbs include working from home, face masks in more places, and Covid passports in night clubs and large events. Low, middle and high-paid job categories all showed steady growth.
• Veterinary jobs saw the strongest improvement in the fortnight to 3 December, followed by construction. Care, aviation, and loading & stocking saw further improvements, with postings in aviation almost back to their pre-pandemic levels. Postings in high-contact, customer-facing occupations did not yet seem to be impacted by the spread of omicron, with retail (+5pp), food preparation & service (+3pp) and beauty & wellness (+1pp) all registering growth.
• Postings fell in just four occupations: chemical engineering, architecture, arts and entertainment, and civil engineering. Most of these roles experience serious recruitment difficulties due to lack of qualified labour.

Ireland has a similar story.

• Job postings were 53% above the 1 February, 2020, pre-pandemic baseline, seasonally adjusted, as of 3 December, 2021, the day when the most recent set of public health restrictions was announced.
• Media and communications, food preparation and service, and hospitality and tourism saw the biggest declines in the two weeks to 3 December. The decline in postings for pub, restaurant, hotel and travel-related jobs may have been driven by the introduction of a midnight closing time in mid-November. Growing uncertainty about the demand outlook, prompted by rising cases, may also have contributed to the decline in food and hospitality postings, although other high-exposure, customer-facing occupations like retail and arts and entertainment still showed growth during that period.

Written by

Charlie Ball

Head of higher education intelligence

Prospects