UK graduate labour market update: 25 January

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

What do graduates do? 2021/22 has been released. This is the annual examination of graduate outcomes from Jisc and AGCAS, based on the HESA Graduate Outcomes data from 2018/19.

Of the 198,875 UK-domiciled first-degree graduates who responded to the survey:

• The majority of graduates were in employment 15 months after graduating in 2020, during the pandemic.
• 7.7% were unemployed and looking for work.
• 72.4% of employed graduates were in a professional-level job.
• 8.8% of graduates were in further study.
• The average salary for graduates who went straight into full-time employment in the UK was £24,492.

The report contains examination of the outcomes of graduates from 30 main university subject groups as well as expert insight from careers professionals on the current state of the labour market, self-employment and freelancing, LGBTQ+ graduates, value and success and graduate underemployment.

There were 29.5 million employees in the UK in December, according to the Office for National Statistics (ONS):

• The UK employment rate increased by 0.2 percentage points on the quarter to 75.5%. The number of part-time workers decreased strongly during the pandemic, but has been increasing since April to June 2021, driving the increase in employment during the latest three-month period.
• The unemployment rate decreased by 0.4 percentage points on the quarter to 4.1%, while the economic inactivity rate increased by 0.2 percentage points to 21.3%.
• The number of job vacancies in October to December 2021 rose to a new record of 1,247,000, an increase of 462,000 from its pre-coronavirus January to March 2020 level, with most industries displaying record numbers of vacancies. However, the rate of growth in vacancies continued to slow down. The ratio of vacancies to every 100 employee jobs reached a record high 4.1 in October to December 2021.
• Growth in average total pay (including bonuses) was 4.2% and growth in regular pay (excluding bonuses) was 3.8% among employees in September to November 2021. In real terms (adjusted for inflation), total and regular pay have shown minimal growth in September to November 2021, at 0.4% for total pay and 0.0% for regular pay. Single-month growth in real average weekly earnings for November 2021 fell on the year for the first time since July 2020, at negative 0.9% for total pay and negative 1.0% for regular pay.
• Total actual weekly hours worked decreased by 2.6 million hours compared with the previous three-month period, to 1.02 billion hours in September to November 2021. It is still 33.5 million below pre-coronavirus levels (December 2019 to February 2020).

Data for Scotland is available here:

• The estimated unemployment rate (16+) in Scotland was 3.6%, down 0.1 percentage points since December 2019-February 2020 (pre-pandemic) and down 0.8 percentage points over the quarter.
• Scotland's unemployment rate was below the UK rate of 4.1%.
• The estimated employment rate (the proportion of people aged 16-64 in work) in Scotland was 75.1%, down 0.3 percentage points since December 2019-February 2020 (pre-pandemic) but up 0.8 percentage points over the quarter.
• Scotland's employment rate was below the UK rate of 75.5%.
• The estimated economic inactivity rate (the proportion of people aged 16 to 64 years who were not working and not seeking or available to work) in Scotland was 22.1%, up 0.4 percentage points since December 2019-February 2020 (pre-pandemic) but down 0.2 percentage points over the quarter.
• Scotland's economic inactivity rate was above the UK rate of 21.3%.
• Early estimates for December 2021 indicate that there were 2.42 million payrolled employees in Scotland, an increase of 0.9% (22,000) compared with February 2020 (pre-pandemic).
• This compares with the UK where the number of payrolled employees has increased by 1.4% over the same period.
• The experimental Claimant Count includes Jobseeker's Allowance Claimants and those claimants of Universal Credit who were claiming principally for the reason of being unemployed. In December 2021, there were 145,400 claimants in Scotland, a decrease of 3,100 (-2.1%) over the month but an increase of 32,300 (28.6%) since March 2020 (pre-pandemic). The claimant count rate in December 2021 was 4.6%, compared with 4.7% for the UK as a whole.

Next we move on to Wales:

• The employment rate in Wales was 74.1%. This is down slightly over the quarter and up 1.8 percentage points on the year.
• The unemployment rate in Wales was 3.4%. This is down 0.7 percentage points on the quarter and down 1.4 percentage points on the year. This is the lowest unemployment rate since May to July 2020 and the largest annual decrease since July to September 2016.
• Early estimates for December 2021 indicate that the number of paid employees in Wales has increased by 6,500 (0.5%) over the month to 1.29 million. This is above the pre-pandemic estimates from February 2020, and an increase of 58,300 since the lowest point of the pandemic in November 2020.
• Early estimates for December 2021 at a UK level showed a monthly increase of 183,700, the largest monthly increase since the series began in July 2014.

Data for Northern Ireland is here:

• The number of employees receiving pay through HMRC PAYE in NI in December 2021 was 773,400, an increase of 0.6% over the month and 5.0% over the year. This is the highest on record and the sixth consecutive month that employee numbers have been above pre-COVID levels.
• In December 2021, the seasonally adjusted number of people on the claimant count was 42,600 (4.3% of the workforce), a decrease of 1,300 (2.9%) from the previous month's revised figure.
• The proportion of people aged 16 to 64 in work (the employment rate) decreased over the quarter by one percentage point and over the year by 1.1 percentage points to 70%.
• The economic inactivity rate (the proportion of people aged 16 to 64 who were not working and not seeking or available to work) increased over the quarter by 1.8 percentage points and over the year by 1.1percentage points to 27.6%.
• The total number of weekly hours worked in NI was estimated at 28.3 million, an increase of 4.3% on the previous quarter and an increase of 2.8% on the equivalent period last year.

And regional labour market data is available too:

• Between November and December 2021, the number of payrolled employees in each of the regions of the UK continued to increase.
• For the three months ending November 2021, the highest employment rate estimate in the UK was in the East of England (79.4%), a joint record high employment rate for the region, not seen since January to March 2019, while the lowest employment rate was in Northern Ireland (70.0%). The largest change in the employment rate compared with the same period last year was in the East of England, with an increase of 2.5 percentage points and the largest decrease in the employment rate was in Northern Ireland, at 1.1 percentage points.
• For the three months ending November 2021, the highest unemployment rate estimate in the UK was in the North East (5.7%) and the lowest was in the East of England (2.7%), a record low unemployment rate and level for the region. This was also the case for Yorkshire and The Humber (3.8%), while the East Midlands also saw a record low unemployment rate for the region (3.5%).
• The East Midlands saw the largest decrease in the unemployment rate compared with the same period last year, with a decrease of 2.4 percentage points, followed by the East of England and London, at 1.8 and 1.7 percentage points respectively.
• For the three months ending November 2021, the highest economic inactivity rate estimate in the UK was in Northern Ireland (27.6%) and the lowest was in the East of England (18.2%); Yorkshire and The Humber and the East Midlands saw the largest changes in the economic inactivity rate compared with last year, both with an increase of 1.9 percentage points; the largest decrease in the economic inactivity rate was in the East of England, at 1.0 percentage point.
• For the 12 months ending September 2021, average weekly hours worked varied between London, with 32.5 hours worked, and the North East, with 29.7 hours worked; all regions saw an increase in the average weekly hours worked compared with the same period last year, with Wales and Scotland seeing the largest increases, each with an increase of 2.2 hours.

The ONS have delivered their weekly update on the impact of the pandemic on business and the economy:

• 26% of working adults have reported working from home exclusively in the past seven days. This rose by five percentage points from 21% in the previous period.
• The total volume of online job adverts on 14 January 2022 was 122% of its February 2020 average level, a 5% increase from the previous week, following a period of consecutive falls. This increase is consistent with the start of the year being a busier time for recruitment.
• In the week to 15 January 2022, overall retail footfall in the UK increased by 2% and was 79% of the level seen in the equivalent week of 2019, following three consecutive weeks of decreasing retail footfall.

Also from the ONS, an examination of the wellbeing of students in their third year or higher at the end of the autumn term:

• Two-thirds (67%) of third year or higher students said that the pandemic had a major or significant impact on their academic performance, significantly higher than the student population as a whole (48%).
• Half of third year or higher students (50%) felt very or fairly likely to achieve the level of attainment they expected at the start of their degree or course.
• Around four in ten (43%) third year or higher students said they felt fairly or very unprepared for their next step after graduating or finishing their course.
• Current levels of satisfaction with both academic and social experience have increased significantly from the 2020 to 2021 academic year, the year most affected by the coronavirus pandemic, but for social experiences, it is still significantly lower than in 2019 to 2020.
• The average level of life satisfaction was significantly lower among third year or higher students (6.0) than both all students (6.7) and the adult population in Great Britain (7.0).
• Third year or higher students were significantly more likely to report their mental health and well-being had worsened since the start of the Autumn 2021 term (46%) than all students (28%).

Another big launch this week was the influential Cities Outlook 2022 from the Centre for Cities. Cities Outlook is always a must-read and this is no exception.

• The pandemic prompted a boost in online shopping. In the January 2021 lockdown, 40% of all spending was done online. But in most cities, this shift to online stalled when shops began to open up again and by September 2021 spending in bricks and mortar stores had for the most part bounced back.
• 37 weeks of sales were lost on average for pubs, restaurants, cafés and other food and drink outlets across all city and large town centres. These lost sales were most severe in places like London, Birmingham and Manchester, although they bounced back to above pre-pandemic levels by September 2021. But the biggest high street casualty has been fashion. There has been a significant shift to buying clothes online, a trend which shows no signs of reversing in most cities with in-store fashion sales remaining well below pre-pandemic levels.
• People did frequent their local shops more, and, as a result, the suburbs were cushioned from the worst effects of the pandemic. But with the exception of the retail sector, there are no real differences between cities and suburbs when it comes to sales recovery for sectors like fashion and hospitality.
• Stronger city centres have large catchment areas which shrank during the pandemic, severely restricting the number of workers, shoppers and tourists from outside of their boundaries coming into the city centre to drive demand for the high street. High streets in affluent areas were the worst hit, with London and Edinburgh losing nearly a year's worth of sales. Burnley's shops lost on average 8 weeks of sales between March 2020 and September 2021. London's lost 47 weeks.
• In line with government advice, many office-based employees shifted to home working and the city centre shops, pubs and restaurants that previously catered to them instantly lost their customer base. In economically prosperous city centres, this had a clear impact. Places with a greater number of jobs that could be done from home saw more lost sales.

Chambers of Commerce have released their Quarterly Recruitment Outlook:

• Four out of 5 (79%) firms that attempted to recruit faced difficulties in finding staff.
• Hospitality and construction firms were most likely to report difficulties (each 83%) but all sectors have significant issues.
• Firms cite major issues arising from lack of foreign nationals to recruit as well as disruption due to COVID.
• Attempted recruitment in Q4 was up on previous quarters with 64% overall attempting to recruit staff (61% in Q3). However, the proportion of firms reporting difficulties filling roles reached a historical high at 79%, up from 77% in the previous quarter.
• In both the construction and hospitality sectors the proportion reporting difficulties was 83%, making them the most likely to report issues.
• Marketing and media firms were the least likely to report difficulties at 70% but this remains a high proportion for these sectors historically.

Reed have issued their December Labour Market Review:

• Vacancies and applications were down across all sectors as seasonally expected.
• In transport & logistics, vacancies in December dropped by close to 30,000. However, the pressure for deliveries over the festive period and the threat of cancelled Christmas didn't quite match the media buzz reported in the lead up.
• Hospitality sector applications up over a quarter year on year.
• With applications down by 22% in December compared to November, Reed.co.uk data suggests that while seasonally slower, the market was very much looking ahead to 2022 for their job search.
• Financial services saw a stark decrease in applications, -26% from November and a significant -41% year on year.

Indeed have resumed their regular examinations of UK and Irish vacancies.

• UK job postings were 34% above the 1 February 2020, pre-pandemic baseline, seasonally adjusted, as of 7 January 2022. That was down from 48%, as of 31 December 2021.
• Irish job postings were 42.8% above the 1 February 2020, pre-pandemic baseline, seasonally adjusted, as of 7 January 2022.
• In the UK most categories surpassed their pre-pandemic level of job postings some time ago, but some remain below. Beauty & wellness is furthest below the baseline, perhaps reflecting caution among some people about close-contact services. Certain white-collar occupations have seen relatively weak recoveries - legal postings are still down while accounting and architecture are only slightly above the baseline. Childcare postings are down on pre-pandemic levels, perhaps due to more parents looking after children at home more. Aviation postings are also slightly below the baseline, though they have staged a recent improvement as the travel sector attempts to get back on its feet.
• In Ireland it's therefore unsurprising to see food preparation & service, hospitality & tourism and retail among the biggest fallers.
• Other categories have seen growth over the period though, including community & social service, nursing, logistic support, legal and engineering.

And finally: the Ministry of Justice is looking for 4,000 new magistrates.

Written by

Charlie Ball

Senior consultant: labour market intelligence

Jisc