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UK graduate labour market update: 2 February

February 2021

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 developments in the UK graduate labour market, brought to you by Prospects Luminate at Jisc.

The latest round of the Office for National Statistics (ONS) fast response experimental statistics on the impact of COVID were released on 28 January:

  • According to the Business Impact of Coronavirus (COVID-19) Survey (BICS), 17% of the workforce of UK businesses were furloughed in Wave 22 (28 December 2020 to 10 January 2021), an increase from 14% in the previous period (Wave 21).
  • 47% of working adults in Great Britain travelled to work in the last seven days (both exclusively and in combination with working from home) in the week ending 24 January.
  • Between 15 and 22 January, the volume of total online job adverts increased by five percentage points from the previous week to 74% of levels seen last year.
  • Online job adverts increased in 21 out of 28 categories from the previous week. 'Construction/trades' and 'transport, logistics, warehouse' each saw the largest increases by 22 percentage points to 117% and 108% respectively of the volumes seen in the same week last year. At an increase of 20 percentage points each, 'manufacturing' and 'energy, oil and gas' also increased substantially, at 108% and 71%, respectively.
  • Job adverts decreased in the remaining seven categories with 'education' seeing the largest drop by 11 percentage points to 66% of the level seen in the same week last year. 'Healthcare and social care' saw a decrease of six percentage points compared with last week, to 92% of the level seen last year. At 24%, 'catering and hospitality' remains the category with the lowest comparable volume of online job adverts.
  • In the latest week, job adverts increased across all UK countries and English regions, except for the East of England, which fell by three percentage points to 64% of its volume when compared with the same week of last year. London saw the largest increase in online job adverts by 29 percentage points, to 85% of the volume seen last year. This is the first week where London has not had the lowest comparable volume since the week ending 7 August 2020. Instead, the East of England had the lowest comparable volume this week. This is also the best comparative week for London since last March - but it remains to be seen if that improvement is sustained.
  • Northern Ireland saw a strong increase in the volume of online job adverts from last week, increasing by 22 percentage points to 120 per cent of the volume seen this time last year. The North East, West Midlands and Scotland also saw strong weekly increases of 19 percentage points to 105%, 90% and 83% of the volume seen in the same week last year, respectively. Wales saw a weekly increase of 11 percentage points to 84% of the volume seen last year.

Looking ahead to the next quarter, 19% of firms expect an increase in the size of their workforce, 68% expect it to remain the same.

The ONS also published their fortnightly look at the business impact of the COVID pandemic. This is based on responses from the voluntary fortnightly business survey (BICS) about financial performance, workforce, prices, trade, and business resilience.

  • 71% of businesses were trading in the last two weeks, the same as the previous reporting period.
  • The percentage of businesses currently trading in the accommodation and food service activities industry has fallen to 34%, the lowest recorded value since comparable estimates began.
  • 70% of micro-businesses are currently trading, compared with 88% of businesses with 250 or more employees.
  • The proportion of businesses' workforce on furlough leave has increased from 14% in December to 17%, a level last seen in July 2020.
  • 56% of the workforce in arts, entertainment and recreation were furloughed.
  • Of business currently trading, that have traded internationally over the past 12 months, and have reported how their imports or exports have been affected in the last two weeks, approximately one in four reported that a change in transportation costs affected their ability to trade goods or services internationally.
  • 15% of businesses not permanently stopped trading had no or low confidence that their business would survive the next three months.
  • 32% of businesses had less than three months' cash reserves (including no cash reserves), up from 27% in the previous wave.
  • The accommodation and food service activities industry had the highest percentage of businesses with less than three months' cash reserves, at 53%. This was followed by the other service activities industry (which includes hairdressing and other beauty treatment activities), at 51%.
  • Conversely, the education industry (private sector and higher education businesses only) and the information and communication industry had the highest percentages of businesses that had cash reserves that would last more than six months, both at 47%.
  • 34% of the workforce, in businesses not permanently stopped trading, were working remotely instead of at their normal place of work.
  • The information and communication industry and the professional, scientific and technical activities industry had the highest proportions of their workforce working remotely instead of at their normal place of work, at 78% and 70% respectively.
  • Real estate and education also have the majority of their workforce working remotely.

Last week saw a release of labour market data from the period September to November 2020 from the ONS. This has now been followed up with some more detailed regional data.

  • There were an estimated 34.69 million workforce jobs in the UK. This is 942,000 fewer than a year ago (September 2019) and 475,000 fewer than the previous quarter (June 2020).
  • Workforce jobs decreased in all regions of the UK between September 2019 and September 2020. The largest estimated decrease of 197,000 was in London.
  • The smallest estimated decrease in workforce jobs between September 2019 and September 2020 was seen in Yorkshire and The Humber at 2,000.
  • Compared with the previous quarter (June 2020), workforce jobs decreased in all regions of the UK, except for Wales, which increased by 11,000. The largest decrease was in London at 98,000.
  • The East Midlands had the highest proportion of jobs in the production sector at 12.5%, while London had the lowest proportion at 3.0%.
  • For the services sector, London had the highest proportion at 92.0%, while Northern Ireland had the lowest proportion at 78.3%.
  • The services sector currently accounts for 83.7% of the total workforce jobs in the UK.

There's a series of surveys to look at this week. The first is the Quarterly Recruitment Outlook from Chambers of Commerce and TotalJobs. Fieldwork for the survey was carried out between 2 and 26 November 2020, during the second lockdown, and received 5,900 responses, 95% of which were from SMEs. It found that:

  • 41% of firms attempted to recruit in Q4, up slightly from 37% in Q3, but this remains below pre-pandemic levels (55% in Q1 2020).
  • Over half (56%) of firms in the construction sector attempted to recruit in the quarter, up from 48% in Q3.
  • 53% of firms in the transport and distribution sector attempted to recruit, up from 44% in Q3.
  • 67% of businesses in the public and voluntary sector attempted to recruit in the quarter, up from 57% in Q3.
  • Firms in the hotel and catering sector were once again amongst the least likely to recruit - only 22% attempted to, down from 30% in Q3.
  • Businesses in the marketing and media sector, were the second least likely to recruit (33%).
  • Overall, a quarter of firms saw a decrease in the size of their workforce over the last three months.
  • Looking ahead to the next quarter, 19% of firms expect an increase in the size of their workforce, 68% expect it to remain the same (up from 62% in Q3), and 14% expect a decrease.
  • Construction firms (24%) and manufacturing firms (22%) were the most likely to expect the size of their workforce to increase in the next quarter.
  • Looking at Totaljobs application and vacancy data, in Q4 2020, logistics, followed by IT, administration, sales and customer service roles were receiving the most applications on the site.
  • Totaljobs data shows skilled trades, social care and engineering join IT and logistics as the sectors posting the highest volume of roles.
  • In the first weeks of January, Totaljobs saw over 2.6 million applications compared to 102,000 vacancies on site.

Nearly half of organisations (47%) plan to take steps to enable more home and hybrid working over the next six to 12 months.

Next is the Jobs Outlook from the Recruitment & Employment Confederation (REC) and ComRes:

  • In October to December, business confidence to make hiring and investment decisions rose to a net level of +5, four percentage points higher than in September to November and pointing to modest overall jobs growth.
  • Employers' intentions to hire permanent staff also rose, both in the short and medium term. Sentiment towards hiring in the next three months and in the coming 4-12 months both increased to the same level at net: +24.
  • Hiring intentions for temporary agency workers also remained in positive territory, at net: +5 in the short term and net: +13 in the medium term.
  • 28% of employers reported making redundancies in the year to October-December 2020, while 39% had reduced workers' hours. In both cases this was up from 10% in the year to October-December 2019.

In December 2020, when employers were asked what would be their biggest challenges for 2021:

  • 41% cited ongoing public health restrictions and social distancing measures.
  • 36% said regulatory changes related to Brexit.
  • 17% said recruiting new staff.

The CBI surveyed 638 businesses between 16 December and 14 January for their monthly Growth Indicator:

  • Private sector activity is expected to decline at a sharper pace in the three months ahead (-29%), compared to the past three months (-18%).
  • Consumer services firms expect activity to fall at the sharpest pace (-79%), after another heavy decline over the past quarter (-59%). Distribution sales volumes (-45%) and manufacturing output (-24%) are also anticipated to fall. However, business and professional services expect another easing in the rate of decline (-6%).

The CIPD have launched a campaign, #FlexFrom1st,  to make flexible working the norm. The campaign launched with an accompanying report.

  • 44% of employees have not worked from home at all since the beginning of the COVID crisis.
  • 19% of employees say they work for organisations that do not offer any flexible working arrangements.
  • 41% of employees say it's unfair that some people can work from home while others have to continue to attend their place of work and have little flexibility in how they work.
  • 75% of employees agree that it is important that people who can't work from home can work flexibly in other ways.
  • 30% of the 2,000 employers surveyed by the CIPD are planning to try to increase the uptake of other forms of flexible working besides home working over the next six to 12 months.
  • In contrast, nearly half of organisations (47%) plan to take steps to enable more home and hybrid working over the same period.

The Learning and Work Institute has published a report on skills in Northern Ireland, A higher skills ambition for Northern Ireland. The LWI found that:

  • In 2017, 16% of the working age population in Northern Ireland had no qualifications and 14% had qualifications below level 2. Only 32% had qualifications at level 4 or above.
  • By 2030 25% of the population (25%) will still have low (below level 2) or no qualifications and 36% will have qualifications at level 4 or above.
  • This means that by 2030 Northern Ireland will still have a higher proportion of its working age population with no qualifications and a lower proportion with qualifications at level 4 and above than the UK did back in 2017.

The Institute suggest a five-point plan to improve Northern Irish skills.

HESA, the Higher Education Statistics Agency, have released data on student numbers in the 2019/20 academic year:

  • First degree courses remained the most popular type of higher education, as enrolments in other types of undergraduate courses continued to fall, with a decline of 6% each year from 2017/18 to 2019/20.
  • Postgraduate taught courses saw an increase in first-year student numbers in recent years, particularly 2019/20. From 2017/18 onwards, the rise was largely due to an increase in enrolments from non-European Union students
  • Postgraduate research course enrolments for first year students decreased by 9% from 2018/19 to 2019/20 after an increasing trend in recent years.
  • There was a decrease in the number of qualifications obtained in all levels for the 2019/20 academic year, despite growth in the overall number of first year students in preceding years. Evidence suggests that some of this decrease is explained by significant numbers of qualifications awarded this year not being reported. This is likely to be linked to the impact on examinations and awards resulting from the COVID-19 pandemic.

There is also a House of Commons Library briefing update on student numbers as a consequence.

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