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UK graduate labour market update: 27 April

April 2021

A report on post-pandemic workforce resilience, experiences of working from home, and age bias in job adverts are among the topics covered by Charlie Ball's weekly labour market update, brought to you by Prospects Luminate and Jisc Data and Analytics

The latest round of the Office for National Statistics (ONS) fast response experimental statistics on the impact of COVID were released on the 22 April.

  • 27% of the workforce worked solely from home last week.
  • 17% of the workforce were on partial or full furlough leave - around 5.7 million workers.
  • Total online job adverts on 22 April 2021 were at 99% of their average level in February 2020.
  • Vacancies in manufacturing, construction, transport/logistics, IT and science are above the Feb 2020 levels, while healthcare and marketing roles are over 95%.

The next round of the ONS bi-weekly examination of the impact of the pandemic on business has been released.

  • The percentage of businesses currently trading has increased from 71% in early January 2021 to 77% in mid-April 2021.
  • With coronavirus restrictions loosening in England, Wales and Scotland, 9% of businesses are indicating they intend to restart trading in the next two weeks (up four percentage points from late March to early April 2021).
  • The percentage of businesses experiencing a decrease in turnover, from normal expectations, is 36% in late March to early April 2021.
  • Over half of businesses in the other service activities industry (which includes hairdressing and other beauty treatment activities) have only three months' cash reserves or less.
  • The proportion of businesses' workforce on furlough leave has fallen from 19% in mid-March 2021 to 17% in late March 2021, after increasing from 11% in early December 2020.
  • The main challenge reported by currently trading businesses for exporting and importing has remained as additional paperwork, at 35% and 44% respectively.

Managers were reported as being emotionally drained from dealing with such a high volume of employee wellbeing and mental health concerns.

Also from the ONS, an analysis of the industries most resilient to the pandemic:

  • A firm's industry was the most important factor in determining its 'resilience'.
  • People employed in resilient industries made up 12.4% of total employment based on data from the 2019 Annual Population Survey (APS).
  • Workers holding university degrees, masters or doctorates made up almost 50% of all the workforce in resilient industries (well above the national average)
  • The dominant resilient industries, in terms of employment, were tertiary education and computer consultancy activities. Tertiary education includes first-degree level higher education and postgraduate level higher education. Computer consultancy activities includes the planning and designing of computer systems including computer hardware, software and communication technologies.
  • In industries labelled resilient, the proportion of people employed that were female was higher than in other industries.
  • The percentage of people working full time was also higher in resilient industries, and people in these industries were more likely to be employees, and less likely to be self-employed than people working in other industries.
  • Prior to the pandemic, workers aged 25 years and younger and those aged 60 and over accounted for a lower percentage of people employed within the resilient industries compared with non-resilient industries.

As a companion piece to their work on younger workers, the Resolution Foundation have also published a report, with the Nuffield Foundation, on the effects of the pandemic on older workers called A U Shaped Crisis:

  • Since the onset of COVID-19 in the UK, employment rates have fallen by two percentage points among both men and women in their 50s.
  • A year into the crisis, the impact on employment among women in their 50s has been worse than any of the major crisis periods dating back to the 1980s. For older men, the impact has so far been similar to the crises of the 1980s and 1990s.
  • Older workers who lose their jobs tend to take longer to return to work. Over the period 1998 to 2020, after becoming unemployed, 62% of those aged 50 and above have returned to work within six months, compared to 74% among those aged 16 to 29, and 72% among those aged 30 to 49.
  • Workers over the age of 50 who become unemployed have faced hourly earnings that are, on average, 9.5% lower than their earnings in their previous jobs. This is more than double the earnings hit experienced by those aged 30 to 49 who experienced an unemployment spell.

British Chambers of Commerce and Barclays LifeSkills have released a new report on post-pandemic workforce resilience - The Next Normal: Futureproofing the Workforce for a Post-Pandemic World.

Businesses are still adjusting to a new working environment:

  • Some customer relationships have become more demanding.
  • Managing employees remotely had not been straightforward.
  • There is widespread concern about employee fatigue, with multiple reports of staff working long hours.
  • New processes had been introduced - such as task-based working practices - to respond to the circumstances.

Much more focus on employee wellbeing and mental health issues:

  • Body language that signals something is wrong can be difficult to pick up via video call. Managers were reported as being emotionally drained from dealing with such a high volume of employee wellbeing and mental health concerns.
  • Some businesses now provide training in mental health awareness for staff.

There are new forms of communication emerging:

  • The process of communicating to staff about job security has taken on a new context, particularly with those employees on furlough.
  • Colleagues find new ways to communicate with each other, with queries that are easily resolved in an office environment not as easily resolved when remote working.
  • Many businesses have used social networking and messaging platforms to support communication both with and within their workforce.

The workplace is evolving:

  • Businesses highlighted the benefits of having employees in one place. It makes the training of young people and new employees easier. It is more conducive to the creation of ideas. It is easier to cultivate a positive workplace culture.
  • Positive experiences of remote working had changed some perspectives on workforce management - the opportunities to recruit from further afield and to offer more flexible working are particularly welcomed.

Training priorities may shift:

  • The need to develop digital capability was seen to be increasingly important to business competitiveness and success.
  • Employee wellbeing and mental health is not well understood, making it likely to be more prominently featured in future training plans.
  • More learning content will move online - the pandemic had demonstrated that lots of training provision can be delivered on a virtual platform.

A focus on the workforce's next generation:

  • Early engagement with young people is crucial to the development of employability skills.
  • Work experience is important - but many businesses do not have the resource to engage with work experience programmes.
  • Winning the war for talent requires a deep understanding of what potential employees want from their employer.

7.5 million workers in the UK are hoping to do their jobs from home permanently post-lockdown, up from 3.6 million that were based from home all of the time pre-lockdown.

Deloitte have surveyed 1,248 UK workers across a number of industries about their experience of work during the pandemic:

  • Deloitte's survey estimates that 7.5 million workers in the UK are hoping to do their jobs from home permanently post-lockdown, up from 3.6 million that were based from home all of the time pre-lockdown.
  • 28% of workers don't ever plan on working from home once lockdown restrictions have lifted, down from 50% who said the same in March 2020, with 42% of workers hoping to do their jobs from home twice a week or more.
  • Employees currently based at home are twice as likely to think they work best there (40%), compared to in a workplace (21%). 42% say they like not having to commute, with 40% finding it more efficient and 34% feeling more relaxed.
  • For those finding working from home challenging however, 39% say it's hard to stay motivated, while 34% find it difficult to maintain a work life balance and 33% feel isolated or lonely.
  • 58% of employees aged under 35 doing their jobs from home say they are finding it 'challenging', up from an average of 44% for all home workers, with 37% of under-35s saying they feel 'overwhelmed' by the different technologies they need to use for their role.
  • 29% of workers aged under 35 say they don't feel confident using technology in their role, compared to an average of 22%.
  • 59% of workers say that technology has been essential in enabling them to continue to perform their role during the pandemic, with 45% becoming more confident in using technology for work purposes in the past 12 months.
  • 57% have used video conferencing software more in the past year, while 48% have increasingly relied on software to help team collaboration.
  • When asked about the ways they would like their employers to support them further, opportunities to train or improve their skills came almost top of the list (selected by 29%), just behind flexibility in terms of when they can work (31%).

The Centre for Aging Better and the Behavioural Insights Team have produced a report on age bias in job adverts called Ads for All Ages:

  • Some words and phrases affected how successful older candidates thought their application would be. Several of the terms relating to younger age-stereotypes were identified by the older group as being off-putting, and this negatively affected their perceptions of both fit and potential success in the application process.  
  • Younger-age stereotypical words such as 'innovative' and 'adaptable' were associated with a lower perceived likelihood of getting an interview and getting an offer.
  • The word 'innovative' also had a negative effect on whether older jobseekers felt like they would ‘fit’ within the recruiting organisation. 
  • 'Technologically savvy' had a negative effect on perceived likelihood of interview, job offer and fit.
  • The inclusion of benefits, such as generous pension contributions and flexible working opportunities, was associated with a higher stated likelihood of older jobseekers applying. Flexible working is a wider part of being an age-friendly employer, and is the main practice that people say would help them to work for longer.
  • The words and phrases which are more likely to appeal to older applicants are less commonly used in job advertisements than those which appeal more to younger candidates. For example, 'knowledgeable', which has a stronger appeal to older workers, is used significantly less than 'innovative' or 'dynamic', which both appeal more to younger workers.
  • None of the words and phrases that positively influenced older jobseekers' stated likelihood to apply had opposing effects on younger jobseekers. The use of older-age stereotypical words did not seem to affect how likely younger people were to apply for a job. However, it did affect their perceptions of their success.

The EY Item Club have issued new economic forecasts for the UKv and Ireland. For the UK:

  • Resilient UK economic performance means the EY Item Club now expects 6.8% GDP growth in 2021, revised up from the 5.0% growth predicted in January.
  • The UK economy is seen returning to its Q4 2019 level in Q2 2022, three months earlier than previously forecast.
  • Solid recovery is expected to develop from Q2 as restrictions are progressively eased and COVID-19 vaccines rollout continues.
  • EY ITEM Club believes the pandemic will have a smaller long-term economic impact for the UK than first expected.
  • There are concerns about inflation and interest rates are likely to remain low for the next couple of years.

And for Ireland:

  • The Republic of Ireland's economy is projected to grow by 5.0% in 2021 and 4.6% in 2022, reflecting the strength of country's export base, which is dominated by pharma, ICT and agri-food - all strong performers during the pandemic
  • The strong GDP performance was in contrast to the significant labour market disruption seen in 2020 and continued into 2021.The labour market is expected to recover its peak by late 2023.
  • EY estimates suggest that ROI inflation will rise by 1.5% in 2021 in the base case, after a fall of 0.3% in 2020, rising to 2.0% in 2022. Despite the relatively muted price increase in 2021 overall, inflation is expected to peak at 3.3% in the base case in October 2021.

Indeed have been looking at where in the UK jobs postings are strongest:

  • Job postings on Indeed UK are already above pre-pandemic levels in some parts of the country as the economy reopens.
  • Postings have recovered most in Northern and Midlands cities and large towns, while London, cities in the South and tourist locations lag, often significantly.
  • Differences in the pace of hiring recovery appear related to the sectoral composition of postings, with recovery fastest in cities with higher shares of manufacturing, distribution, healthcare and education jobs, while areas reliant on hospitality, tourism and highly paid, white-collar, work-from-home jobs trail.
  • Urban areas where the claimant count rate is high and job posting recovery is slow are in greatest need of policy support.

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