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.
- The level of vacancies is running at about 50% of normal rates.
- The graduate labour market has suffered significant damage, particularly in the arts - which may be the worst-affected sector in the UK. But things are far worse for non-graduates. 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.
- Postgraduate interest is strongly up and the coming term could see a great many enrolments. Teaching, for example, is up significantly.
- The situation for international student recruitment is tricky, but it's starting to look as if many, if not most, are showing for the start of term.
- 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.
Post-pandemic, employers estimate that 37% of the workforce will work from home regularly, and 22% of the workforce will work from home all the time - up from 9% before pandemic.
People Management continue their liveblog on employer actions in the pandemic.
The September update on the labour market from the Office of National Statistics was published on 15 September:
- Early estimates for August 2020 from PAYE information indicate that the number of payroll employees fell by 2.4% (695,000) compared with March 2020.
- Figures for May to July 2020 show an increase in the unemployment rate. Despite this increase and an increase in the number of redundancies, the employment rate was up and the economic inactivity rate has fallen. This rise in employment may not continue as the furlough scheme unwinds.
- More than five million workers were furloughed in July, and around another 250,000 were away from work and not being paid.
- The Claimant Count increased in August 2020, reaching 2.7 million. This includes both those working with low income or hours and those who are not working. The estimated unemployment rate rose to 4.1%.
- Vacancies in the UK in June to August 2020 were almost 30% higher than the record low in April to June 2020. The increase was driven by small businesses - those with fewer than 50 employees.
- There has been a large decrease, by 165,000, in the number of young people (aged 16 to 24 years) in employment over the last quarter.
- The estimated number of people unemployed aged 16 to 24 years increased by 76,000 on the year to 563,000
The ONS also have reporting on the social impacts of COVID-19 to 17 September.
- 10% of the workforce remained on furlough leave, and 11% of businesses were at a moderate or severe risk of insolvency.
- The proportion of adults travelling to work at some point in the week rose to 62%..
- 20% of the workforce worked at home.
- Jobs adverts rose to 53% of last year's average. IT roles went up significantly and stood at 64% of the 2019 average. Most job categories saw increases, with wholesale and retail and health social care also rising strongly.
With new ONS labour market figures comes an update of the House of Commons Library's invaluable guide to the impact of COVID on employment.
The Bank of England's quarterly Agent's Summary of Business Conditions for Q3 was released last week
- Some companies across all sectors reported plans to reduce headcount, particularly in the hospitality, retail, aviation, automotive and oil and gas sectors.
- Some companies planned to see how demand evolves in the coming months before making headcount decisions.
- However, there are also some reports of headcount increases under consideration in sectors where demand has been stronger than normal, such as food processing and retail; IT and digital services; medical and scientific development, and some financial services. Most of these sectors are predominantly staffed by graduates.
The Open University have released their Business Barometer for Q3. The report finds that
- 56% of UK organisations continue to experience skills shortages.
- 61% of organisations say that they are not as agile as they need to be because of shortfalls in their skills.
- 48% of employers felt that apprenticeships and work-based learning initiatives will be vital to their organisation's recovery over the next year.
LinkedIn have been looking at the hiring of women over the course of the pandemic.
During 2020, the hiring of women reached its lowest point in April where it fell to 41.5%, before recovering to 45.2% in July. In 2019 women accounted for 45.6% of hires in the UK. Although women make up a high proportion of the health and social care workforce, which was one of the least affected sectors by pandemic, they also make up the majority of the workforce in hospitality, retail and arts, which have all been badly hit. In addition, LinkedIn’s Workforce Confidence Index research found that:
- 27% of women said they were caring for their children by themselves.
- 32% said they were providing full time childcare, compared to 19% of men.
- 62%of women also reported feeling increased levels of stress or anxiety due to the pandemic, compared to 48% of men.
Women are less confident in their ability to get or hold onto a job than men, less confident in their ability to progress their career than men, and very much less confident about their ability to improve their financial situation in the next six months.
The CIPD have surveyed 1,000 employers on their reaction to the pandemic to the end of June. The report is titled Embedding new ways of working: implications for the post-pandemic workplace.
- 51% of employers froze recruitment or were planning to.
- 19% had increased recruitment or were planning to.
- 45% had frozen or delayed wage increases or were planning to.
- 16% had cut pay for some or all of their staff and 7% more were planning to.
- 35% of employers reported that a quarter of their workforce was working from home, 40% that 75% to 99% of their workforce were working from home and 21% that all of their workforce was working continuously from home. There is no difference between public and private sector employers in this respect. On average, employers estimated that 54% of their workforce was working from home. Before lockdown 18% of the workforce worked from home at least occasionally.
- Post-pandemic, employers estimate that 37% of the workforce will work from home regularly, and 22% of the workforce will work from home all the time - up from 9% before pandemic.
- The main perceived challenge to homeworking was employee mental wellbeing, 48% of employers citing this as a challenge. 36% were concerned about reduced staff interaction and 33% about effective line management.
- 61% of employers, however, saw it as an improvement to work life balance. 43% felt homeworking aided collaboration and 38% that it allowed greater focus with fewer distractions.
Finally, AGCAS and the Institute of Student Employers have released the results of their research into the effectiveness of employer engagement.
- 108 AGCAS members across 69 institutions were surveyed to test frequently held assumptions about employer engagement.
- Careers fairs are still seen as one of the most effective employer engagement activities for both universities and employers.
- Employer-led skills sessions/presentations were the most commonly offered activity, and rated one of the most effective activities according to employer.
- Work-based learning and embedded curricula activity are considered most effective by universities.
- Before March 2020, virtual employer engagement was not considered to be as effective as face-to-face delivery.
- Universities measure effectiveness by focusing on experiential feedback. Employers look for quantitative numbers of hires or applicants and return on investment. This can cause a challenge in management of expectations.
It's well worth reading this report, which contains a very interesting section reflecting on how the pandemic might change employer engagement.
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