UK graduate labour market update: 20 May

In his latest update, Charlie Ball looks at the increase in UK job vacancies and a report showing regions with more graduates have more vacancies than those with fewer graduates

For the first time since records began, there are fewer unemployed people than job vacancies. 

• In January-March 2022, the number of people aged 16+ in employment was 32.57 million, and the employment rate was 75.7%, up from 75.5% in the previous quarter. Employment levels have risen over the past quarter and the past year, but are still 444,000 below their pre-pandemic level.
• The UK unemployment rate was 3.7%, and 1.26 million people aged 16+ were unemployed. Unemployment levels have fallen over the past quarter and the past year, and are 117,000 below their pre-pandemic levels.
• 8.83 million people aged 16-64 were economically inactive, and the inactivity rate was 21.4%. Inactivity levels have risen on the quarter and the year, and are 368,000 above their pre-pandemic level.
• The number of vacancies continues to increase and reached 1.30 million in February-April 2022. This was 499,000 more than pre-pandemic levels.
• Average wages excluding bonuses fell in real terms in the three months to March 2022, with an annual change of -1.9% excluding bonuses. They grew by 0.7% including bonuses.
• The increase in the employment rate was driven by the movement of people aged 16 to 64 years from unemployment to employment. However, there was also a record-high movement of people from economic inactivity into employment.
• Total job-to-job moves also increased to a record high of 994,000, driven by resignations rather than dismissals - in other words voluntary moves - during the January to March 2022 period.

Scottish labour market data is here.

• Over Q1 2022, the unemployment rate decreased, while the employment rate increased and economic inactivity rate decreased.
• The estimated unemployment rate (16+) in Scotland was 3.2%, down 0.6 percentage points since December 2019-February 2020 (pre-pandemic) and down 0.9 percentage points over the quarter. Scotland's unemployment rate was below the UK rate of 3.7%.
• The estimated employment rate (the proportion of people aged 16-64 in work) in Scotland was 75.6%, up 0.2 percentage points since December 2019- February 2020 (pre-pandemic) and up 1.4 percentage points over the quarter. Scotland's employment rate was slightly below the UK rate of 75.7%.

 The Senedd has a briefing on the Welsh data.

• For January to March 2022 the unemployment rate for people aged 16+ in Wales was 3.0%, lower than 3.1% in the previous quarter (October 2021 to December 2021). This is a decrease of 2,000 people from the previous quarter to 45,000. The unemployment rate in Wales (3.0%) is higher than Northern Ireland (2.3%) but lower than England (3.9%) and Scotland (3.2%).

Northern Irish data is here.

• The latest NI seasonally adjusted unemployment rate for the period January-March 2022 was 2.3%.  The unemployment rate decreased by 0.4 percentage points over the quarter and by 1.2pps over the year to 2.3%.
• The proportion of people aged 16 to 64 in work increased by 1.5pps over the quarter and by 2.0pps over the year to 72.2%.  The total number of weekly hours worked in NI (28.8 million) increased by 6.4% over the quarter and by 9.9% over the year.
• The economic inactivity rate decreased by 1.2pps over the quarter and over the year to 26.0%. 

And regional UK data is here.

• The number of payrolled employees continued to increase in all regions of the UK, with the largest percentage increase in the South West and the smallest percentage increase in the South East.
• For the three months ending March 2022, the highest employment rate estimate in the UK was in the South West (79.1%) and the lowest was in the North East (70.9%).
• The largest change in the employment rate compared with the same period last year was in the West Midlands, with an increase of 3.1 percentage points, resulting in a record high employment rate of 76.1%, while the largest decrease was in the North East at 1.1 percentage points; the only region in the UK to see a decrease in the employment rate.
• For the three months ending March 2022, the highest unemployment rate estimate in the UK was in the North East (5.0%) and the lowest was in Northern Ireland (2.3%).
• All regions of the UK saw a decrease in the unemployment rate compared with the same period last year, with the East Midlands seeing the largest decrease of 2.5 percentage points, resulting in a record low unemployment rate of 2.7%; Scotland and Northern Ireland also saw record joint low unemployment rates of 3.2% and 2.3% respectively.
• For the three months ending March 2022, the highest economic inactivity rate estimate in the UK was in Northern Ireland (26.0%) and the lowest was in the South West (18.5%); the largest change in the economic inactivity rate compared with the same period last year was in the West Midlands, with a decrease of 2.0 percentage points, resulting in a joint record low economic inactivity rate of 20.3%, while the largest increase was in the North East at 1.8 percentage points.

A summary of the new labour market data is also available from the House of Commons Library.

The latest rapid indicators of economic and social change are now available from the ONS.

• Total online job adverts decreased by 3% in the week to 13 May 2022, to 133% of their February 2020 average level.
• Law, energy, oil and gas and healthcare are all currently running at vacancies levels below pre-pandemic numbers.
• In early May 2022, 13% of businesses not permanently stopped trading reported a shortage of workers, compared with 14% in April 2022. The accommodation and food service activities industry continued to report the highest proportion of businesses experiencing worker shortages. However, at 34% this is down from the 37% seen in April 2022. Some businesses from across this industry commented they were experiencing a lack of kitchen staff, such as chefs.

Among all businesses, the biggest reported effects of these worker shortages were that:

• 50% of businesses were unable to meet demands, unchanged from early April 2022
• 40% of employees worked increased hours, down from 43% in early April 2022
• 16% of businesses paused trading, down from 20% in early April 2022
• 16% of workers recruited were temporary, up from 13% in early April 2022

•  When excluding businesses with fewer than 10 employees, the percentage of affected businesses that reported they were unable to meet demands or had to pause some of the businesses trading was lower, at 45% and 13% respectively. In comparison, percentages for employees working increased hours and businesses having to recruit temporary workers were higher at 56% and 23%, respectively.

The ONS have been looking at the earnings of job changers and stayers.

• In April 2021, average hourly earnings growth was 6.6 percentage points higher for employees who had changed jobs compared with those who stayed in their jobs.
• Hourly earnings themselves, however, are consistently higher for employees who have stayed in their job for longer than a year; in April 2021, average hourly earnings were 17% higher for stayers.
• Employees aged 16 to 24 years not only change jobs more often than those aged 25 to 49 years but have higher earnings growth when they do.
• Median hourly earnings growth was 6.6 percentage points higher for employees who had not been furloughed at any point between April 2020 and April 2021, compared with those who had been furloughed.
• On average, employees who changed job and moved into the accommodation and food services industry experienced negative earnings growth in April 2021.
• Job changers who switched industries, occupations, or region as well as changed jobs experienced higher earnings growth than those who moved jobs within their industry, occupation, or region.

Also from the House of Commons library this week – this useful briefing on FE funding.

Yorkshire Universities have published a new report on graduate employment and employability.

(I contributed to this report)

The report identifies 8 priority areas of action:

• Ensure that graduates are equipped to anticipate and adapt to the changing nature of work by investing in enhanced employability and enterprise skills through intra and extra-curricular activities. Help employers understand and adapt to the changing expectations and priorities of graduates.
• Create more opportunities for students and graduates to engage with employers through internships, projects and placements, etc. Highlight the benefits to employers of engaging with students and graduates, and encourage more creative, low risk opportunities for students to gain experience.
• Tailor careers and enterprise support to meet the particular needs and aspirations of specific groups of students and graduates, especially those facing barriers to employment.
• Create a supportive environment that encourages graduate recruitment and enterprise. Utilise and develop more joined-up, collaborative 'brokerage' models to connect more graduates to good graduate jobs in the region.
• Develop common and coordinated messages to employers on the value of working with graduates to encourage graduate recruitment, emphasising the value and transferable skillset of all graduates.
• Create clearer and more visible entry points for employers to engage with the diverse activities of the HE sector, including recruitment of graduates, and ensure institutions present a joined-up offer.
• Align strategic economic development priorities and strengthen existing and emergent partnership work around delivering a shared ambition to make Yorkshire a more attractive region to live, work and study in.
• Build on or create mechanisms to improve the collation, sharing, analysis and interpretation of data to support forward planning and the development and implementation of more effective strategy and action within the region.

The Institute of Employment Studies have a new report on local labour markets.

• The analysis uses the Annual Population Survey alongside real-time vacancy data from Adzuna.
• Coastal and some ex-industrial areas more likely to be experiencing both low participation and relatively fewer vacancies, and so potentially struggle to narrow gaps with other areas.
• The southern half of the country and often less urban areas more likely to have higher participation and high vacancies, so well placed to build on their pre-crisis strengths.
• Many parts of London and the South East seeing high participation alongside relatively low vacancies, reflecting the significant impacts of the COVID crisis on London and its wider economic footprint in particular.
• Parts of the Midlands and North West in particular experiencing strong growth in vacancies but with relatively low rates of economic activity.
• Areas that are close to the national average in terms of participation and vacancy rate are fairly evenly spread across England’s regions.
• Areas with both low participation and low vacancies are predominantly in ex-industrial areas and some ethnically diverse cities.
• Areas with higher participation and vacancies are predominantly in more affluent parts of the country.
• Those with low participation but high vacancies are across a range of groups but most commonly in major cities outside of London (including Birmingham, Bristol, Coventry, Leicester, Liverpool, Manchester, Oxford and Sheffield), as well as the City of Westminster.
• Those with high participation but weaker vacancies are found particularly in London and in smaller towns.
• There is also a clear fit between qualifications profile and group membership. Areas with lower participation and low vacancies have fewer residents with higher qualifications (36% compared with at least 40% in other areas) but also higher rates of people with no qualifications, especially when compared with areas with high participation (around 14% compared with around 10%). More graduates in an area are strongly linked to a higher level of vacancies.

The Institute for the Future of Work and the CIPD have published a new report looking at the impact of technology on good work.

The report focuses on the 6 impacts of technology on work.

1. Substitution - technology performs new tasks previously undertaken by workers. Example: A stock-monitoring system directly displaces the work of stock-room managers.
2. Transference - technology transfers tasks from the worker to others. Example: Workers use the HR information system self-service function to book annual leave instead of HR doing it for them.
3. Telepresence - technology reduces the need for physical proximity, enabling workers to perform tasks from any location.
4. Creation - technology creates new tasks and even new jobs for people. Example: Engaging with stakeholders on social media on behalf of organisations has created demand for social media managers.
5. Augmentation - augmenting workers' capabilities. Example: Using a business intelligence tool augments a worker's ability to gain insights and run reports.
6. Intensification - doing more tasks in the allocated time. Example: A call centre worker uses online chat to talk to several customers at the same time.

The report then makes the case for a 'high road' approach centring people in the process of technological adoption and recognising their contribution to productivity.

Also from the CIPD – their new Spring Labour Market Outlook.

• Recruitment intentions are above pre-pandemic levels and appear to be on an upward trajectory. 74% of employers say they are planning to take on new staff in the next three months.
• 45% of employers have hard-to-fill vacancies. These are most common in healthcare (54%), the voluntary sector (49%) and education (49%).
• The most popular response to hiring difficulties has been to raise pay (44%). But employers may be reaching a limit on how much further they can go on pay: only 27% anticipate raising pay in future to address hard-to-fill vacancies. Employers are also looking to other means to tackle staffing challenges: 39% have focused on upskilling more existing staff and 38% have advertised more jobs as flexible.
• Relative to historical levels, redundancy intentions among employers remain low at 13%. This figure stood at 33% in summer 2020 and 16% prior to the pandemic.

A depressing poll from the Chartered Management Institute found that a third of male managers think too much effort is being focused on ensuring a workplace gender balance.

• 47% of female managers felt that too little effort is devoted to achieving gender balance.
• Two-thirds of male managers believe their organisation can successfully manage future challenges without gender-balanced leadership. Only a third of female managers agree.
• Having a child is the primary driver for the differential experience of work and exclusion from opportunity for women. Nearly half of managers (47%) felt they have been overlooked for at least one opportunity because of their identity. Most notably:

Promotions (31%):

• female managers with children, compared to male managers with children (37% vs. 27%);
• female managers more than male managers (34% vs. 27%).

Salary rises (29%)

• female managers with children, compared to male managers with children (33% vs. 20%);
• female managers more than male managers (33% vs. 24%).

• 84% of the managers told CMI that hybrid working has benefited them, and made it easier to balance work and home life commitments.
• 60% of the managers said flexible working had opened up job opportunities where it would have been difficult to balance work and home life commitments if these roles had been office based.

Written by

Charlie Ball

Senior consultant: labour market intelligence

Jisc