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 new lockdown is a very serious blow to many businesses, but especially to SMEs and to retail, hospitality and the arts.
- Most projections of economic recovery did not assume a second lockdown of this nature. Those that did suggest that the UK will not get back to where it was in February until 2022 at the earliest. This means that the 2021 recruitment round is now likely to be down.
- The level of vacancies is running at somewhere around two thirds of normal rates and seemed to be climbing - slowly.
- Graduate training schemes are down but probably not as much as most of the rest of the market.
- It looks like there'll be a two-track recovery (US economists are calling it '-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.
- Formal and conventional internships as we knew them pre-pandemic are down but employers are trying to find alternatives and there is likely to be quite a diverse and innovative set of work experience offers.
- Apprenticeships have been hit hard in SMEs but seem to be recovering in larger businesses.
- A lot of employers are adopting virtual recruitment strategies which are likely to stick post-pandemic.
- 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 - that said, this was before a second lockdown was announced. 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.
Prior to the pandemic, the solo self-employed had higher levels of job satisfaction, were more likely to report being happy and reported lower levels of anxiety than employees.
This week's news and reports
People Management continue their liveblog on employer actions in the pandemic.
The latest round of rapid indicators for the UK economy were released on 19 November.
- The proportion of the workforce on furlough went up last week and now stands at 9%.
- The proportion of the workforce at their normal workplace fell to 59.8%, as did the proportion of adults travelling to work, down to 51%.
- 28% of the workforce was working remotely.
- Job ads stood at 68.3% of the 2019 average.
- Manufacturing, construction, accountancy/finance, engineering, law, marketing/PR, healthcare, education and management all saw increases.
REC and EMSI have released their latest Jobs Recovery Tracker to the first week of November:
- There were 1.36 million active job adverts in the UK in the first week of November.
- Six of the 12 nations and major regions now have higher numbers of job adverts than in March, with North West England recovering most strongly. London is showing the weakest recovery.
- Roles in construction, logistics and food and drink have recovered strongly, while hospitality and leisure remain at significantly lower levels than in March
The Centre for London, along with the Policy Institute and the Centre for Urban Science and Progress, at King's College London, have more on the effects of the pandemic on London.
- In October 2020, the number of people claiming unemployment-related benefits in London was 170% higher than the same period of the previous year - amounting to 300,000 new claims.
- Early estimates for October 2020 indicate that there were four million payrolled employees, 5% fewer than the same period of the previous year - a loss of 200,000 jobs
- Office demand has dropped off in central London, and vacancy rates have increased, though vacancy is still lower than it was ten years ago following the financial crisis.
Zurich Insurance and the government's Behavioural Insights Team have conducted a trial examining barriers to part-time workers.
For a year from March 2019, all new jobs at Zurich were advertised as being open to part-time, full-time or job share where this was possible - this came to 80% of all new vacancies, or 391 positions within the trial period. The trial found that:
- Applications increased - with an increase in the proportion of women applicants.
- More women applied for, and were appointed to, senior roles.
- The actual proportion of part-time workers remained the same.
- But part-time employees reported feeling an increased sense of belonging at Zurich.
The Institute of Fiscal Studies, supported by the Nuffield Foundation have been examining historic and current trends in self-employment:
- 'Solo' self-employment (that is, sole traders or company owner-managers with no employees) has risen from 8% to over 14% of the workforce in the UK since the 1970s.
- The recent rise in solo self-employment has taken place across the wage distribution. Its prevalence increased among high-paid occupations such as managers and IT professionals as well as among hairdressers, cleaners and drivers.
- 23% of new solo self-employed workers were unemployed in the previous quarter, and a further 31% were inactive.
- The solo self-employed work fewer hours than employees and the self-employed with employees. They have had the highest level of underemployment throughout the past 20 years, with more than 15% wanting to work longer hours at the peak of the recession and close to 12% in 2019.
- There is evidence to suggest that some of the solo self-employed would opt for traditional employment if they could secure the opportunity: for them, self-employment is a fall-back option rather than a preference. This includes some solo self-employed in professional roles.
- However, wellbeing is higher among the solo self-employed. Prior to the pandemic, the solo self-employed had higher levels of job satisfaction, were more likely to report being happy and to consider their lives worthwhile, and reported lower levels of anxiety than employees.
The Institute of Employment Research at Warwick have updated their redoubtable LMI for All tool with a new course update based on the Education and Skills Funding Agency (ESFA) course directory.
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