UK graduate labour market update: 22 June

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

UK employment increased by 197,000 in May, reported the Office for National Statistics (ONS):

• The number of payrolled employees has increased by 197,000 in May 2021 to 28.5 million.
• It is, however, 553,000 below levels seen before the pandemic.
• Since February 2020, the largest falls in payrolled employment have been in the accommodation and food services sector, people aged under 25 years, and people living in London.
• There was a quarterly increase in the employment rate of 0.2 percentage points to 75.2% and a quarterly decrease in the unemployment rate of 0.3 percentage points to 4.7%. The economic inactivity rate was largely unchanged on the previous quarter at 21.0%.
• The most common reason given for economic inactivity in the UK was being a student (28.7%), up by one percentage point over the quarter and up by 3.7 percentage points over the year. Long-term sick was the second most common reason (24.4%), down by 0.7 percentage points compared to a year earlier. Looking after family/home fell over the quarter (down 0.5 percentage points) and over the year (down 3.2 percentage points). The percentage of economically inactive people who want a job (21.1%) was down 0.8 percentage points from the last quarter, and down 2.8 percentage points from the year before.
• With the relaxation of many coronavirus restrictions, total hours worked increased on the quarter, however it is still below pre-pandemic levels. The redundancy rate decreased on the quarter and is now similar to pre-pandemic levels.
• The number of job vacancies in March to May 2021 was 758,000, 27,000 below the level before the pandemic in January to March 2020; most industries have recovered to show vacancies above pre-pandemic levels. The strongest quarterly increase was in accommodation and food services. The industries with the most vacancies are health, retail and professional services.

Meanwhile, English regional data is here:

• Since the start of the COVID-19 pandemic, all regions' counts of payrolled employees followed a similar pattern: rapidly declining initially but beginning to improve in more recent months.
• The number of payrolled employees in May 2021 has increased compared with May 2020, for all regions except London, but remain below pre-pandemic levels; London alone is still below the number for the same period last year.
• For the three months ending April 2021, the highest employment rate estimate in the UK was in the South East (78.7%) and the lowest was in Northern Ireland (69.8%). The East Midlands saw the largest change compared with the previous year, with a decrease of 2.2 percentage points.
• For the three months ending April 2021, the highest unemployment rate estimate in the UK was in London (6.5%) and the lowest was in Northern Ireland (3.1%). London saw the largest change compared with the same period last year, with an increase of 1.7 percentage points.
• For the three months ending April 2021, the highest economic inactivity rate estimate in the UK was in Northern Ireland (27.9%) and the lowest was in the South East (18.2%). The North West and South West both saw the largest changes compared with the same period last year, each with an increase of 1.7 percentage points.
• Between December 2020 and March 2021, workforce jobs increased in eight out of 12 regions of the UK, with the largest increase of 63,000 seen in the South East. The largest decrease was by 20,000 in the East Midlands. London has the highest proportion of service-based jobs, at 92.3%, while for the production sector, the highest proportion of jobs is in the East Midlands, at 12.5%.

Also available is the Northern Irish (NI) data:

• The latest NI seasonally adjusted unemployment for the period February-April 2021 was estimated from the Labour Force Survey at 3.1%. The unemployment rate decreased over the quarter by 0.6 percentage points and increased by 0.8 percentage points over the year.
• The proportion of people aged 16 to 64 in work increased over the quarter by 0.5 percentage points and decreased over the year by 1.4 percentage points to 69.8%.
• The economic inactivity rate decreased over the quarter by 0.1 percentage points and increased over the year by 0.8 percentage points to 27.9%.
• NI had the lowest unemployment rate, the lowest employment rate and the highest economic inactivity rate of all the UK regions.
• There are 399.000 graduates working in Northern Ireland with 78.9% working in professional level jobs. 43.8% of the NI workforce has a degree or equivalent and another 10% have a post-18 qualification such as BTEC or HND.

And the Scottish data is here too:

• The unemployment rate in Scotland increased slightly in April, the employment rate decreased slightly and economic inactivity rate increased slightly.
• The estimated unemployment rate (16+) in Scotland was 4.2%, up 0.5 percentage points since December 2019 to February2020 (pre-pandemic) and up 0.1 percentage points over the quarter. Scotland's unemployment rate was below the UK rate of 4.7%.
• The estimated employment rate in Scotland was 74.2%, down 1.2 percentage points since December 2019 to February 2020 (pre-pandemic) and down 0.1 percentage points over the quarter. Scotland's employment rate was below the UK rate of 75.2%.
• Early estimates for May 2021 from HMRC Pay As You Earn Real Time Information indicate that there were 2.4 million payrolled employees in Scotland, a decrease of 2.1% (50,000) compared with February 2020 (pre-pandemic).

Last but not least, data for Wales is here:

• Data from the Labour Force Survey shows that the employment rate remained broadly stable towards the end of 2019 and the beginning of 2020 following a steady decrease since late 2018. The employment rate began to fall in early 2020 as a result of the coronavirus pandemic, and the July to September 2020 period saw the largest quarterly decrease in the Welsh employment rate since records began in 1992.
• Early estimates for May 2021 indicate that the number of paid employees in Wales has increased by 11,300 (0.9%) over the month to 1.25 million. This is the largest monthly increase since the series began in 2014 and an increase of 20,400 since the lowest point during the pandemic in November 2020 although it remains below the February 2020 figure of 1.26 million.
• As of 30 April 2021, 131,900 employments in Wales were furloughed. This is a take up rate of 10%.
• The pandemic has had a large impact on actual hours worked.  In the three months to April 2021, the average number of hours worked in the UK was 30.0 hours. Despite an increase of 4.2 hours from the lowest point in April to June 2020, the average number of hours worked still hasn't reached the pre-pandemic levels. In the three months to April 2021, there was a slight increase on the previous quarter and an increase of 1.0 hour (3.4%) on the previous year. Women had a larger increase over the year than men (4.8% compared to 2.5%, respectively).
• The most common reason for economic inactivity for men in Wales was long-term sickness, although this decreased by 1.0 percentage points to 31.3% of all economically inactive men in the year ending December 2020 (the UK also saw a decrease). Over the same period, the proportion of men discouraged from work (not looking for work because they believe no jobs are available) more than doubled (increased by 0.7 percentage points) to 1.3% of all economically inactive men in Wales.
• The most common reason for economic inactivity for women in Wales was long-term sickness, which increased 0.3 percentage points to 25.7% of all economically inactive women in Wales. Over the same period, the proportion of economically inactive women looking after family decreased 5.2 percentage points to 22.8% of all economically inactive women.
• The number of self-employment jobs in Wales increased by 10,000 (5.6%) between March 2020 and March 2021 to 192,000 (13.3% of workforce jobs compared to 11.5% in March 1999). June 2020 saw the lowest level of self-employment jobs since March2013, although the figure for March was slightly higher.

Here are the job vacancy rate figures for the EU and associate states:

• The job vacancy rate (the proportion of unfilled jobs) in the euro area (EA-19) was 2.1 % in the first quarter of 2021, up from 1.9 % in the previous quarter and from 1.8 % in the first quarter of 2020. In the EU, the job vacancy rate was 2.0% in the first quarter of 2021, also up from 1.8 % in the previous quarter in the first quarter of 2020.
• Among the EU member states the highest job vacancy rates in the first quarter of 2021 were recorded in Czechia (5.0 %), Belgium (3.5%) and the Netherlands (3.0%). In contrast, the lowest rates were observed in Greece (0.3%) and Spain (0.7%).
• Compared with the same quarter of the previous year, the job vacancy rate fell in eight member states and remained stable in five and increased in 12 member states. The largest decreases were recorded in Czechia and Luxembourg (both 0.7 percentage points) and Sweden (-0.4 percentage points). The largest increases were recorded in Italy (+0.8 percentage points), Lithuania (+0.5 percentage points) and the Netherlands (+0.4 percentage points). Data was not available for France (first quarter of 2020) nor Ireland (first quarter of 2021).
• For the EU, the COVID-19 pandemic had a more pronounced impact in 2020 than the economic recession in 2009. At the height of the crisis in 2009, the annual EU job vacancy rate fell by 0.3 percentage points (compared with the year before) and it remained unchanged in 2010. Thereafter, the EU job vacancy rate increased by 0.3 points in 2011, decreased by 0.1 in both 2012 and 2013, before there were consistent signs of strengthening in the labour market, as there were modest annual increases in the job vacancy rate for the period 2014-2019 (up 0.1, 0.2 and even 0.3 points in 2017). Afterwards, there was a marked decrease of 0.5 points in 2020 due to the effects of the COVID-19 pandemic in the labour market.
• For the euro area, the job vacancy rate fell less strongly than for the EU between 2008 and 2009 (to reach a low of 1.1 %), before increasing in both 2010 and 2011. It then fell in 2012, remained stable in 2013 and 2014, before posting similar annual changes to those recorded for the EU during the period 2015 to 2019). Finally, there was the same decrease of 0.5 points in 2020 due to the effects of the COVID-19 pandemic.

The latest round of the ONS fast response experimental statistics on the impact of COVID were released on 17 June:

• 7% of the UK workforce were furloughed - this is approximately 1.8 million people.
• 23% of the workforce worked solely from home last week.
• The volume of UK online job adverts on 11 June 2021 was at 127% of its February 2020 average level, a slight fall on last week but still well above the level before the first lockdown.
• Despite recent improvements in the proportion of businesses trading, many companies were trading below their usual capacity, with 31% of businesses reporting turnover lower than normal. In the arts, entertainment and recreation industry this figure is over 60%.
• 21% of businesses currently trading reported that the prices of materials, goods or services bought in the last two weeks had increased more than normal.

More from the ongoing ONS examination of student wellbeing, this time examining HE students between 24 May and 2 June:

• 29% of students said they had engaged with mental health and well-being services since the start of the autumn 2020 term. Among the most frequently specified services used were GP or primary care (47%), online university services (40%), and NHS or Improving Access to Psychological Therapies (IAPT) programme (29%).
• The most frequently specified mental health and wellbeing services students would use in the future, in the first instance, were GP or primary care (25%) and online university services (10%).
• 61% of students who were in higher education prior to the outbreak of the COVID-19 pandemic reported that the lack of face-to-face learning had a major or moderate impact on the quality of their course. 52% said that the pandemic had a major or significant impact on their academic performance.
• 81% said that they were living at the same address as they were at the start of the autumn 2020 term. This has statistically significantly decreased since early May 2021 (86%).
• There was a statistically significant increase in the proportion of students reporting that they had at least one COVID-19 test (even without symptoms) in the previous seven days (38%) compared with April 2021 (30%).
• The proportion of students who have already received at least one vaccine dose (33%) also significantly increased compared with April 2021 (28%).
• Average life satisfaction scores among students continued to increase at 5.9 (out of 10) in late May 2021, following the improvements seen in April 2021 (5.8). However, average scores remained significantly lower than the adult population in Great Britain (7.1).

The Behavioural Insights Team (BIT) have investigated pluralistic ignorance amongst men about flexible working - or in other words, they've been examining whether men mistakenly believe that their colleagues disapprove of parental leave.

Working in collaboration with Santander UK and a second global bank, the BIT set out to investigate whether pluralistic ignorance could be holding men back from taking more parental leave and working flexibly. First, they ran a baseline survey at each bank, where they asked male participants whether they supported male colleagues who took longer parental leave and worked flexibly, in order to balance work and non-work responsibilities.

Then, they asked them to estimate what percentage of their male colleagues they thought would be supportive of the same behaviours. This allowed the BIT to measure participants' perceptions of norms. They then ran a randomised controlled trial (RCT) where they gave the treatment group feedback about their colleagues' true views, based on the baseline survey. The control group did not receive any feedback.

• Respondents at Santander UK would encourage men they work with to take eight weeks of leave, but thought their male colleagues would only encourage around six weeks. At the second bank, this was 12 weeks and eight weeks.
• Men at Santander thought that roughly 65% of their peers would encourage male colleagues to work flexibly, while in reality 99% would do so.
• At the second bank, twice as many men supported male colleagues to take at least 4 months of leave as men assumed.
• Before they ran the RCT interventions, the average level of leave taken was four weeks at Santander UK and two weeks at the second bank. Both trials produced a statistically significant shift within the distribution of the responses. Santander UK saw a 62% increase in the proportion of men intending to take five to eight weeks of leave in the group that received feedback. The second bank, saw a 50% increase in the same category.
• At Santander UK, the BIT saw an unintended effect whereby the number of men intending to take more than 16 weeks decreased by 59% in the feedback group. The team believes it may be because they potentially anchored people to the single length of five weeks referenced in the feedback. They managed to avoid a similar effect at the second bank because they instead referred to a couple of lengths of longer leave (six and 12 weeks) in the feedback.

The Resolution Foundation has been examining the propensity for young people to live with their parents in a new report, Boom(erang) Time?:

• 23% of 18 to 34-year-old (non-student) respondents to an RF survey were living with their parents in June, slightly lower than the 25% who said they were doing so before the start of the pandemic (in February 2020).
• Those with weaker labour market positions were already more likely to live with their parents before the crisis hit: 25% of respondents who worked in sectors that would become hard-hit, like hospitality, lived with their parents throughout the crisis, compared with the 15% of those who worked in industries less affected by the pandemic. Non-graduates, those who worked in hardest-hit sectors and those on lower levels of pay going into the crisis were more likely to move back than their better-off counterparts.
• Young men were almost a third more likely than young women to live with their parents.
• In 2018/19, 49% of 19 to 29-year-olds in the second lowest pay quintile (of the young person's weekly pay distribution) lived with their parents, compared with the much lower 11% of their counterparts in the highest pay quintile.
• Between 1996 and 2019, there was a near doubling in the share of workless and part-time 19 to 29-year-olds that lived with their parents (from 25% to 47% and 25% to 45%, respectively) over the same time period.

The Office for Students have released findings from a new evaluation of AI and data science postgraduate conversion courses:

• 46 per cent of the total UK students are women, compared with 27% on computing postgraduate taught masters courses previously.
• 23% are Black students (12% on previous taught Masters courses) and 20% are disabled (16%).

Indeed have been looking at applications for UK jobs from EU citizens post-Brexit:

• Britain has become less popular with EU jobseekers since post-Brexit immigration rules were put in place in January 2021, with overall searches down 36% and clicks on lower-paid jobs off 41% since 2019.
• Searches from elsewhere in the world have been remarkably stable - and have even risen significantly for higher-paid jobs - driven by jobseekers from current and former Commonwealth countries and Hong Kong.
• Employers who want to hire foreign workers for lower-paying jobs face substantial obstacles.
• EU and non-EU search shares dropped by 14% and 7% respectively during 2020, as COVID restrictions were in place but by May 2021 non-EU searches were back at pre-pandemic levels while EU searches have continued to fall.
• Postings in low, middle and high-paying occupations all registered declines in clicks by EU jobseekers but the drop was most pronounced among the lowest-paying jobs - the ones most affected by post-Brexit immigration rules. The share of clicks by EU jobseekers on postings in lower-paying occupations fell from 1.2% in 2019 to 0.7% in May 2021 - a 41% drop in the EU contribution to candidate supply. The shares of clicks in high- and middle-paying occupations fell less - 17% and 22% respectively.
• The share of clicks from non-EU jobseekers on postings in low-paid occupations increased only slightly from 0.9% to 1.0% - a 12% rise. Thus, falling EU interest at the lower-paid end of the labour market has not been offset by rising non-EU interest
• Occupations with the biggest falls in EU jobseeker clicks included engineering, childcare, scientific research & development, food preparation & service and sports. The UK has traditionally filled local ongoing and entrenched shortages of workers in engineering and STEM with EU nationals.
• Categories that attracted the highest shares of clicks from outside the UK were largely high-paid jobs that require advanced qualifications. In software development, 18.7% of clicks were from foreign jobseekers, the highest share of any occupation. This represents a substantial increase since 2019, entirely driven by rising non-EU clicks. Mathematics, a category that includes analyst and data scientist jobs, was in second place. Engineering, architecture, scientific research, banking & finance and media & communications roles also attracted high foreign interest. All these categories have seen gains in non-EU click shares since 2019 as EU interest has decreased. 

Deloitte have released the results of a large survey on the aspirations of graduate jobseekers across Central Europe. The First Steps Into The Labour Market survey gathered the views of 9,107 people aged 18 to 30, most of whom were students and recent graduates from leading universities from across Central Europe and France.

The report splits the cohort into 4 groups:

• Eager Beavers who look for work satisfaction, enjoy their job, commit to it but have wider interests (31% of the sample).
• All-Rounders, who look for work-life balance and who take work and personal life equally seriously (30% of the group).
• Fast Trackers, whose career is central to them, who back themselves to succeed, and who are not always satisfied with simply working hard, but by advancement (20% of respondents).
• By-Standers, who know they have to work for a living but would usually rather be doing something they find more fulfilling - not to say they don't work hard if it helps them achieve their real goals (18% of the group)

Among the findings were:

• More than a quarter of students plan to move abroad to pursue their professional career, and 72% are willing to consider such an idea. More than 50% of respondents have work experience that is compatible with their studies or profession. A majority are or have been employed in a full-time job.
• Working from various locations (such as in the office or at home) with flexible working hours is the preferred choice for 49.6% of respondents, up from 42.6% in the previous 2018 edition of the First Steps survey. Fixed working hours with the freedom to work from different locations is the best option for 15.5%, while the traditional model - working in the office for a fixed number of hours - is attractive for only 10% of those surveyed (down from 13.7%).
• 38% see the labour market situation as poor, more than 70% are confident that it will take them only around one to six months to find a good job. In the 2018 research, this view was shared by 89% of respondents. The COVID-19 pandemic has not significantly affected young people's financial expectations. A majority still expects their salaries to match pre-pandemic levels.
• Good health and a happy family life topped the ranking of values for the cohort, chosen by 83% and more than 78% of respondents respectively as the areas they value most. Having a professional career is one of the most important values for 39% of the sample.
• When choosing an employer, 42%, regardless of gender, see individual plans and opportunities to develop their careers as most important.
• Salary was the second most important priority. It is more important for men than women, and older respondents (between 25 and 30) are more likely to make a decision based on salary than younger students.
• Social media sites account for the two top sources that young people use to find information and insights about potential employers and jobs. LinkedIn is the first choice for 27% overall.  Facebook is the primary source of information for 20% of those surveyed, being equally popular among female and male respondents and slightly more popular among less experienced and younger respondents aged under 22 (22%).
• When applying for a job, the face-to-face interview is the preferred method of connecting with a potential employer, selected by almost 77% of young people.
• 92% of the young people who participated would prefer to work in an organisation with a diverse workforce (in terms of age, gender, nationality, etc). While almost 18% of respondents would prefer their supervisor to be a man (compared with 8% who would sooner have a female boss), 75% have no gender preferences when it comes to who they report to. The great majority (85%) would prefer to work alongside people from different cultural backgrounds.
• 'Insufficient appreciation of my work' ranked first when making a decision to leave an employer, accounting for 26% of responses. A poor atmosphere/negative relationships at work were equally important for respondents (even though they are not key factors when choosing an employer). Insufficient appreciation was more important for males than females, while a low salary was the reason to leave a company for only 11% of respondents.

Written by

Charlie Ball

Head of higher education intelligence

Prospects