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:
- The economy is improving, but we're a long way from where we were at the start of the year and a prolonged return to lockdown will be a blow to small businesses and sectors like culture, retail and hospitality that have already had a hard time.
- The level of vacancies is running at just over 50% of normal rates and seems to be climbing - slowly.
- The graduate labour market has suffered significant damage, particularly in the arts - which may be the worst-affected sector in the UK. Many key graduate employment sectors - in health, social care, IT, finance - have been much less affected than many other areas of the economy. Retail, hospitality, travel and accommodation employers have all taken long term hits.
- It looks like there'll be a two-track recovery (US economists are calling it 'K-shaped', with some sectors, particularly those where remote working is effective, recovering rapidly and others slowly. As most of the rapidly-recovering sectors are highly graduate this may exacerbate the already serious social and economic divides in the country.
- 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.
- Undergraduate students have shown up for the start of term in large numbers but COVID outbreaks and lockdown restrictions are affecting morale, and mental health and dropouts are concerns. But we must also be mindful that young people not in employment have very few alternative options at the moment.
- Postgraduate interest is strongly up.
- Salaries are likely to remain stagnant or even fall.
- Decisions made about recruitment and business strength this year will also affect next year's recruitment round (at least).
- 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.
- Many of the big graduate training schemes are in the process of enacting plans for their 2021 recruitment round. At present we are hearing of some pauses, but they seem to be the minority at the moment. A reasonable view of the 2021 round right now is that it may be down on a normal year but better than the 2020 round.
Employers have reduced training since 2017 - 60% of staff received training in 2019.
The ONS have issued their overview of the September labour market:
- In September 2020, 20,000 more people were in payrolled employment when compared with August 2020 and 673,000 fewer people were in payrolled employment when compared with March 2020.
- Estimates for June to August 2020 show an estimated 1.52 million people were unemployed, 209,000 more than a year earlier and 138,000 more than the previous quarter.
- The estimated UK unemployment rate for all people was 4.5% (4.9% for men, 4.0% for women); this is 0.6 percentage points higher than a year earlier and 0.4 percentage points higher than the previous quarter.
- Total working hours have improved but remain low.
- Redundancies increased by a record 114,000 on the quarter.
- The number of employees has fallen in recent months.
- UK Claimant Count level has increased by 120.3% since March 2020.
And the House of Commons Library have updated their briefing on the effects of pandemic on the labour market.
The Employer Skills Survey report for 2019 came out this week. This is a marvellous piece of work that comes out from the DFE every two years and involves surveying a 5% sample of UK employers to find out about recruitment and the challenges faced by business. Over 81,000 employers were surveyed.
It's particularly useful for (among other things) examining occupational shortages, and we'll be taking a more in-depth look at the survey and the data in it at a later date.
- Vacancies in 2019 were down on 2017.
- But hard to fill (HTF) and skills shortage vacancies (SSVs) were up on 2017.
- 24% of vacancies were SSVs, construction, manufacturing particularly affected.
- Employers had reduced training since 2017 - 60% of staff had received training in 2019.
- Hard to fill vacancies were more prevalent for high skill jobs.
- Vacancies that were particularly hard to fill included: professionals in IT, business services, education and public administration; associate professionals in financial services, public administration; carers.
- Main reasons for HTF vacancies at grad level: low number of applicants with required skills; not enough people interested in doing job; just not enough applicants; for some associate professional roles, lack of work experience.
We know that many shortages persist despite COVID-19 and we'll be looking at that in particular in the weeks and months ahead.
On average, those working second jobs have lower pay, work fewer hours, and have more often temporary jobs.
People Management continue their liveblog on employer actions in the pandemic.
The ONS also have reporting on the social impacts of COVID-19 to the 15th October:
- 65% of adults travelled to work in the week ending 11 October.
- Between 2 and 9 October 2020, total online job adverts increased from 61% to 63% of their 2019 average.
- Healthcare and education each saw the largest increase by four percentage points, to 95% and 80% of their 2019 averages respectively.
- The two regions with the highest volume of online job adverts compared with the 2019 average were the East Midlands (at 83% of their 2019 average) followed by the North East (76% of their 2019 average). London remained the region with the lowest volume of job adverts at 51% of their 2019 average.
The Creative Industries Policy and Evidence Centre has issued a report looking at second jobs among creative industry workers:
- 11% of musicians, 10% of photographers and AV operators and 8% of actors, presenters and artists have a second job.
- 30% of creative workers' second jobs are also creative work; most are not in 'portfolio careers'.
- On average, those working second jobs have lower pay, work fewer hours, and have more often temporary jobs, compared with those who do not work second jobs.
- 60% of second jobs are in non-professional roles.
And the Centre for Economic Performance at the LSE have another paper out, this time on future opportunities in green industries.
The authors set out six key areas, where government investment could create jobs and advance the fight against climate change, with long term benefits to employment and growth as global demand for green tech increases rapidly:
- energy efficiency in buildings
- natural capital projects
- active travel equipment and infrastructure, such as bicycles and cycle lanes
- renewable power generation, distribution and storage
- electric vehicle production and charging infrastructure
- carbon capture, use and storage, and blue and green hydrogen production.
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