UK graduate labour market update: 15 December

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

• Projections of economic recovery are now assuming 'normal' in 2022 or 2023. We can therefore expect at least one more cycle of reduced graduate recruitment.
• The level of vacancies is running at somewhere around two thirds of normal rates and seemed to be climbing - slowly.
• Graduate training schemes are down but probably not as much as most of the rest of the market.
• The creative sector has had a very hard time and will need some time and help to recover.
• 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.
• Formal and conventional internships as we knew them pre-pandemic are down but employers are trying to find alternatives and there is likely to be quite a diverse and innovative set of work experience offers.
• Apprenticeships have been hit hard in SMEs but seem to be recovering in larger businesses.
• A lot of employers are adopting virtual recruitment strategies which are likely to stick post-pandemic.
• 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 and 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.

This week's news and reports

People Management continue their liveblog on employer actions in the pandemic.

The National Centre for Universities and Business (NCUB) released their annual State of the Relationship report, examining collaboration between universities and business. I was a contributor, writing about the graduate labour market.

This report is not easily summarised as it contains a wealth of information about employment, research investment and collaboration. Some relevant data for 2017/18:

• 6,370 degree apprenticeship starts
• 10,497 higher apprenticeship stats at universities
• 3,747,828 learner days for CPD at universities
• 5,905 HE staff coming in from the private sector
• 1,745 HE staff leaving for the private sector.

The Office of National Statistics have been busy this week. The latest round of rapid indicators for the UK economy were released on 10 December.

• 77% of UK businesses are currently trading.
• 14% of trading business' workforce are on furlough leave.
• Between 27 November and 4 December 2020, total UK online job adverts decreased by three percentage points to 74% of the level seen in the same week last year.
• In comparison with the previous week, the number of online job adverts decreased in 20 of the 28 Adzuna categories and increased in the remaining eight categories.
• The volume of job adverts decreased in all regions of the UK. London remains the region with the lowest volume of online job adverts compared with the same week in the previous year, having decreased to 60% of its level in the same period last year.

Between 20 and 25 November 2020, the ONS conducted a pilot survey of university students to provide information on student behaviour at university, during the pandemic. The report was published on 9 December:

• 2,006 students responded to the survey, a response rate of 2%, and these statistics are considered experimental. The pilot was sent to 100,000 students across England, but not all responded. A disproportionate number of female students responded, and responses also varied by region, and so data has been weighted.
• An estimated 56% of students, who live away from their home (usual non-term address) plan to return home for Christmas.
• Of those who responded, more than half (57%) reported a worsening in their mental health and wellbeing between the beginning of the autumn term (September 2020) and being surveyed.
• Students are significantly more anxious than the general population of Great Britain, with mean scores of 5.3 compared with 4.2 respectively, (where 0 is 'not anxious at all' and 10 is 'completely anxious').
• Student experience has changed because of the coronavirus - considering academic experience, 29% of students reported being dissatisfied or very dissatisfied with their experience in the autumn term.
• Over half (53%) of students reported being dissatisfied or very dissatisfied with their social experience in the autumn term.
• 6% said that they were unlikely to continue their studies this year - the most common reason cited was online learning, cited by 45% of those planning to drop out.

The ONS have also released a report looking at the industries most affected by pandemic and those that have recovered:

• The enforced closure of shops selling non-essential items during the first wave of the pandemic led to a boost for online retailers. The internet's share of retail sales dipped after shops reopened in June but the proportion was increasing again in October. The extent of a structural shift in the behaviour of consumers remains to be seen.
• Dispensing chemists sold consistently more since the pandemic began than they did before. As one of the essential types of shop allowed to remain open during the first lockdown, their sales rose strongly in March 2020, but they carried on growing in June even after restrictions were eased and other non-essential stores were allowed to reopen. The customers of furniture retailers returned in the summer with trade returning to pre-pandemic levels and growing further, boosted by people still spending more time at home than they used to.
• Even when restrictions in the UK were eased and people were allowed to go on their summer holidays, turnover in the accommodation industry was still down compared with a year ago.
• That was not the case across the entire sector, with camping surpassing its performance last year.
• Retail sales of clothing and footwear and leather goods fell in March and April 2020, as non-essential shops closed. As students prepared to return to school in September and needed new shoes, sales of footwear and leather goods picked up significantly. As with other types of clothing, however, sales in September and October 2020 were still below their February levels.
• Smaller firms were more likely than bigger ones to have had to temporarily close or pause trading during the pandemic. In manufacturing, however, there did not appear to be a notable difference between SMEs and larger firms. Turnover levels for both smaller and larger firms have moved in line with each other since February 2020.
• For cinemas and theatres, the enforced closure saw trade down to just 10% of pre-pandemic levels, with many closing altogether. By September 2020, with cinemas allowed to reopen with social distancing, turnover was still down 58% on the same month last year. That downturn was not shared by music publishing, which saw an increase in turnover relative to February.

Finally the ONS have also examined how people’s use of their time changed during 2020:

• On the whole, people returned to pre-lockdown behaviour in September to October 2020.
• At the end of March and April, women were spending 44% more time on unpaid household work and 55% more time on unpaid childcare than men. By September and early October this had increased to 64% more time on unpaid household work and 99% more time on unpaid childcare than men.
• After lockdown, those on the highest incomes switched to working from home more while those on the lowest incomes worked more outside the home..
• Parents spent more time working in September and October 2020, and less time on unpaid childcare and household work.
• On an average day, the increase in paid work for parents was almost fully driven by time spent working from home, showing an increase by 90% to 1 hour and 45 minutes on an average day across the week.

Indeed are reporting rising interest in UK jobs from outside the EU ahead of post-Brexit immigration rules:

• The non-EU share of clicks on UK jobs has increased this year, although it is still just below 2%.
• A significant increase in interest from Hong Kong represents about one-third of the increase.
• The biggest rises are occurring in high-paid occupations. All are graduate level, and many are experiencing recruitment difficulties in the UK.
• From April to October 2020, software development was the occupation with the highest combined share of EU and non-EU clicks. Mathematics, a category dominated by analysts and data scientists, was second. Several engineering occupations feature in this list, as well as architecture, scientific research & development, aviation, and information design & documentation, a category that includes business intelligence analysts, and user experience and technical specialists. Banking & finance and media & communications round out the top 12.

The Recruitment and Employment Confederation (REC) and EMSI have released their regular Jobs Recovery Tracker:

• Data was harvested from jobs boards between 23 November and 6 December 2020 to produce EMSI's Job Postings Analytics data.
• There were 1.4 million active job adverts in the first week of December, the highest weekly total this year.
• Every UK nation and almost all English regions saw growth in active job postings in the first week of December. South West England saw the biggest rise (+2.7%), with growth particularly strong in Dorset (+4.3%), Torbay (+3.7%) and Bournemouth & Poole (+3.7%). Other local areas with strong weekly growth in active postings included East Lothian & Midlothian (+4.3%) and Falkirk (+4.3%).
• The only region which saw a fall in active job postings was North West England, where the 2.7% drop in postings was focused mainly in Mid Lancashire (-9.3%), now under England's highest level of restrictions. It is worth noting, however, that the North West had a stronger recovery earlier in the autumn.
• There was a significant increase in job adverts for vets (+18.1%) in the first week of December, as well as veterinary nurses (+8.0%).
• There was also growth in adverts for fitness instructors (+6.0%) as gyms re-opened in England last week, as well as medical practitioners (+6.8%) and physiotherapists (+5.3%).

REC also produced their regular Report on Jobs survey, with KPMG. The report is compiled by IHS Markit from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies:

• November survey data revealed a second successive monthly drop in overall demand for staff across the UK, driven by a steep decline in permanent vacancies. Demand for temporary staff rose for the fourth month in a row, although the rate of increase is slowing.
• The availability of both permanent and temporary staff continued to rise in November.
• Permanent starters' salaries declined again in November. Temp pay also declined, albeit modestly.
• Permanent placements fell across all four monitored English regions in November. The steepest reduction was seen in London.
• All four monitored English regions except London registered higher temp billings midway through the fourth quarter. The Midlands noted the fastest expansion.
• November survey data signalled a renewed fall in permanent private sector vacancies. At the same time, growth of temporary roles in the private sector weakened. In the public sector, permanent positions also fell sharply, while demand for short-term staff rose modestly.
• Only two of the ten monitored job categories registered higher demand for permanent workers in November, namely IT & Computing and Engineering.

The Manpower Group also released their Outlook:

• The UK's employment outlook is the least positive in Europe.
• 49% of employers expect their hiring to return to pre-pandemic levels within the next 12 months.
• EU workers leaving the UK creates opportunity for UK workforce, but skills shortages in key sectors, such as construction and healthcare, are on the horizon.
• Finance and business services shows a positive outlook for hiring for the first time since the pandemic began.

More from the Government’s Behavioural Insights Team, this time on engagement with technical education. The project, which commenced in November 2015, set out to build evidence against the following research questions:

1. How can we change young people's attitudes towards TE, and increase their inclination to take up these routes?
2. How can we encourage parents or carers to be (a) more engaged, (b) more informed on careers guidance issues related to TE, and (c) overcome stereotypes about academic and vocational qualifications?
3. How can we encourage progression through the higher levels of TE for existing learners?

Four randomised controlled trials took place.

1. Prompting reflection on the purpose of career education. Does engaging in a purpose-for-learning exercise prior to receiving career and education information relevant to TE impact comprehension, retention and attitudes?

• No significant effect on behavioural measures of engagement (proportion of time and total time spent on technical content).
• Positive and significant effect on attitudinal measures of engagement. Participants who completed the purpose-for-learning exercise were: more likely to be opened to pursuing a technical course, more likely to be open to a technical career and less likely to report 'don't know' on interest in a technical course or apprenticeship.

2. Government/employer endorsements for TE. Do different messengers encourage parents or carers to (a) be more engaged, (b) be more informed on careers guidance issues related to TE, and (c) overcome stereotypes about academic and vocational qualifications?

• Positive significant effect of both the simple government and simple employer endorsement on parents' consent to take part in future research to support the roll-out of TE (a proxy indicator for positivity towards TE) for both message variants.
• No significant effect on survey enrolment one week later (a proxy indicator for greater positivity towards TE).
• Small but significant impact of the simple government endorsement and more complex employer message on stereotypes about TE.

3. Labour market information on TE. Does labour market information relating to TE pathways - and how it is presented - affect time comprehension, retention and attitudes to TE?

• Compared to young people who received only basic information, those who received basic information plus LMI were significantly more likely to indicate that they would pursue a technical route if there was one for their chosen career.
• That pursuing TE would help them to get a job more easily, compared to alternative post-16 pathways.
• In comparison, young people who received contextualised LMI were significantly more likely to suggest that someone in their social network would benefit from T Levels and to indicate that they thought a technical route would be more enjoyable.
• Both treatment arms also improved young people’s ability to reliably recall information about the careers they saw and the technical route into them.

4. Messages to encourage further study. Do government communications designed using behavioural science encourage progression through the levels of TE for existing learners?

• No significant effect of any of the four arms on progression into higher level technical qualifications.

Written by

Charlie Ball

Head of higher education intelligence

Prospects