UK graduate labour market update: 23 March

This week's labour market update from Charlie Ball includes insight into the challenges faced by trans workers and fascinating new findings from the Futuretrack longitudinal research project

The latest round of the Office for National Statistics (ONS) fast response experimental statistics on the impact of COVID were released on the 18 March .

• 30% of the workforce worked solely from home last week.
• 19% of the workforce were on partial or full furlough leave -  around six million workers.
• Total online job adverts on 12 March 2021 were at 93% of their average level in February 2020.
• Vacancies in manufacturing, construction, transport/logistics, IT, science and health/social care are above the February 2020 levels.
• On 12 March 2021, online job adverts on Adzuna exceeded their February 2020 average level in Northern Ireland, the North East, the East Midlands, the West Midlands, Yorkshire and The Humber, and the South West.

There was some very big news on the labour market analysis front as the Institute for Employment Research released their report on Wave 5 of Futuretrack.

The Futuretrack longitudinal research has been tracking the cohort of students who applied to university in 2005/2006, most of whom graduated in 2009/10. The first four stages were funded by HECSU (now part of Jisc).

The fifth stage of the study was funded by the Nuffield Foundation and was a survey conducted in summer and early autumn 2019, followed by 200 detailed telephone interviews conducted from September 2019 to early January 2020. Note: I was a member of the advisory group on this project.

A summary here cannot do this report justice - it is nearly 200 pages of research into graduate careers. It is also worth stressing that the cohort under investigation largely graduated into the early stages of the 2008 recession. Nevertheless, the crucial findings include:

• 75.5% of the cohort were in full time, paid work, 10.4% in part time work and 7.2% were self-employed, while 1.2% were unemployed.
• More than one in six of those in employment had more than one paid job at the time they were surveyed.
• Over 90% of those in employment were in professional-level employment.
• A prolonged spell or cumulative experience of unemployment between 2012 and 2019 had a strong negative impact on earnings.  Approximately 5% of graduates in this cohort who were unemployed in 2019 had experienced a year or more of unemployment, and this was associated with a reduction in their earnings by more than a quarter compared with their counterparts who had no experience of unemployment.
• There is a clear, persistent gender pay gap and it does not show signs of improving.
• For the majority of Futuretrack participants, other personal values than a drive to maximise salary came into play when they were considering what jobs they would take and how satisfied they were with their jobs and their HE experience. Around a quarter of participants had a strong non-financial value focus in which measures of pay and progression played only a minor role.
• The most often-cited long-term values were 'doing a job I really enjoy' and 'developing my capabilities'.  These job attributes, along with ‘career progression’, ‘job security’ and ’the  ethics  of  my  employer’ were all more frequently rated as very important than “high financial reward’. 
• Graduates who strongly valued money or prestige seek jobs that meet these requirements and, on the whole, they achieve these ambitions, being more likely to be in higher paid, higher status jobs. However, despite these objective achievements, this did not generate very high levels of subjective satisfaction with their pay and progression - they wanted more. Those less well-paid but more intrinsically committed to their work or the values that they supply were more satisfied with their jobs.

In other big report news, the Institute of Student Employers (ISE) have published their Annual Student Development Survey.

• 99% of ISE members continue to recruit graduates, with 80% maintaining a graduate programme for all graduate hires.
• 13% of graduate hires were enrolled on apprenticeships, but spending on apprenticeships has stagnated in the last 12 months.
• 42% of businesses have cut resources available for staff development.
• 11% of businesses are using the Kickstart scheme.
• 60% of respondents also recruit school and college leavers - 43% of non-graduate hires come from school and 37% from FE colleges. 87% of school and college leavers are enrolled onto apprenticeships.
• Employers rate graduate skills more highly than school and college leavers and expect more of them.
• Coding and programming skills (25%), career management skills (24%) and managing up skills (20%) are most likely skills gaps for graduates
• Dealing with conflict (28%), commercial awareness (28%) and career management skills (27%) were most likely to be lacking in school and college leavers.
• Respondents believe that work experience is a better predictor of candidate skill than a postgraduate qualification.
• 67% of school leavers and 53% of graduates remain with the company after 5 years. The most common reason for staff to move on is to take up jobs elsewhere: 22% of hires who left were 'poached'.

You can read more about the findings of the report elsewhere on Luminate, particularly employer perspectives on graduate skills.

The Bank of England has published their quarterly Agents' Summary of Business Conditions.

• Companies in sectors most affected by the pandemic - hospitality, leisure and non-essential retail - remain concerned about the need for large-scale redundancies when the furlough scheme ends later this year.
• However, a majority of businesses expect headcount to stabilise, having already completed job cuts. And a growing minority of businesses in other sectors reported recruiting again following some recovery in demand, or replacing leavers with more highly skilled staff. There were reports of shortages of experienced professionals and specialist skills, in part due to a reluctance of employees to change jobs in an uncertain environment.
• Pay growth remained subdued. Sectors that have been most affected by the pandemic expected to freeze pay again this year and a few plan to defer pay decisions until there is more clarity over the economic outlook. However, some businesses expect to raise pay this year, either because they froze pay last year, their business is doing well or they are concerned about retaining skilled staff.

The Centre for Economic Performance at the London School of Economics and Political Science (LSE) has been continuing to examine the experience of the self-employed during the crisis. Their latest report looks at the state of play after ten months of the pandemic.

• In January 2021, 57% of surveyed self-employed workers were earning less than £1,000 per month, up from 31% in January 2020 and 46% in August 2020
• 37% of self-employed workers worked ten hours or fewer per week in January of this year. This is up from 14.4% a year ago and 23% over the summer. 
• From the end of 2019 to the third quarter of 2020, according to the Labour Force Survey,  self-employment  shrank  by  500,000  workers,  a  fall  of  just  over  10%.
• The third quarter of 2020 saw the lowest number of workers joining self-employment for at least two decades.
• However, there is little evidence of  a planned exodus from self-employment.
• Among self-employed parents, 48% report that having children at home has negatively affected their income. This increases to 56% for parents who consider themselves the primary figure for their children’s home learning, which is 80% of self-employed women and 40% of men with children.

TotalJobs have conducted research into the challenges faced by trans workers.

• In 2016, 52% of trans people didn't reveal their gender identity at work - in 2021, the number is 65%.
• 56% of trans people believe it's harder for them to find a job.
• 53% think they experience more barriers to progress to senior positions than non-trans people.
• 33% have experienced discrimination in job interviews and applications.
• 33% want to know if a company has trans-specific policies in place before considering an application.

And finally, this might be a bit niche for some, but I enjoyed this new paper on polarisation in the Austrian labour market. It examines the changing balance between low, medium and high-skilled job vacancies in Austria using network analysis tools.

• On average, the fraction of low and medium-low-skill vacancies decreased, while the fraction of medium-high-skill and high-skill vacancies increased between 2007 and 2017.
• Thus, Austria does not observe a polarisation of job vacancies (in the sense of a hollowing out of the middle-skill jobs) as in the UK, but rather a trend towards the growing importance of medium-high-skill and high-skill vacancies.

Written by

Charlie Ball

Head of higher education intelligence

Prospects