UK graduate labour market update: 27 January

Charlie Ball provides his regular update on the graduate labour market, summarising the key highlights from the week's news, data and research

Welcome to the latest instalment of our round-up of the week's UK graduate labour market developments, brought to you by Prospects Luminate at Jisc.

The Office of National Statistics have released their monthly labour market overview for January. This data examines the three months to November 2020:

• The UK employment rate, in the three months to November 2020, was estimated at 75.2%, 1.1 percentage points lower than a year earlier and 0.4 percentage points lower than the previous quarter.
• The UK unemployment rate, in the three months to November 2020, was estimated at 5.0%, 1.2 percentage points higher than a year earlier and 0.6 percentage points higher than the previous quarter.
• In the three months to November 2020, the redundancy rate reached a record high of 14.2 per thousand.
• Early estimates for December 2020 indicate that the number of payrolled employees fell by 2.7% compared with December 2019, which is a fall of 793,000 employees. Since February 2020, 828,000 fewer people were in payrolled employment.
• The Claimant Count increased slightly in December 2020, to 2.6 million. This includes both those working with low income or hours and those who are not working.
• There were an estimated 578,000 vacancies in the UK in October to December 2020. This is 224,000 fewer than a year ago and 81,000 more than the previous quarter.
• Average actual weekly hours worked saw an increase of 2.8 hours on the quarter to 30.1 hours.

The Scottish labour market overview is also available:

• Scotland's unemployment rate (16+) decreased slightly over the quarter (0.1 percentage points) and increased over the year (0.6 percentage points) to 4.4%. Scotland's unemployment rate was below the UK rate of 5.0%.
• The proportion of people aged 16-64 in work (the employment rate) increased over the quarter (0.5 percentage points) and increased slightly over the year (0.1 percentage points) to 74.4%. Scotland's employment rate was below the UK rate of 75.2%.
• The economic inactivity rate (the proportion of people aged 16 to 64 years who were not working and not seeking or available to work) decreased over the quarter (0.5 percentage points) and decreased over the year (0.6 percentage points) to 22.1%. Scotland's inactivity rate is above the UK rate of 20.7%.
• Early estimates for December 2020 from HMRC Pay As You Earn Real Time Information indicate that there were 2.3 million payrolled employees in Scotland, a decrease of 2.8% (67,000) compared to the same month the year before. The number of payrolled employees in the UK decreased by 2.7% over the same period.

The latest from the Northern Ireland Statistics and Research Agency (NISRA) reveals that:

• The number of people on the NI claimant count (experimental) decreased over the month to 58,400 in December 2020 but remains almost double the number recorded in March.
• The department was notified of 440 confirmed redundancies in December 2020 taking the number of confirmed redundancies in 2020 to 4,680, the highest annual total recorded in the last ten years.
• The number of employees receiving pay through HMRC PAYE in NI in November 2020 was 740,800, a marginal increase of less than 0.1% over the month and a decrease 1.1% over the year. The flash estimate for December shows a further increase of 0.2% on November's figure to 742,200.
• The NI unemployment rate (16+) decreased over the quarter (0.5pps) and increased over the year (0.9pps) to 3.2% in September-November 2020. Although recent changes were not statistically significant, the unemployment rate was significantly above rates at the beginning of 2020. The NI unemployment rate was below the UK rate (5.0%), the Republic of Ireland rate (7.2%) and the EU (27) rate (7.6%).
• The proportion of people aged 16 to 64 in work (the employment rate) decreased over the quarter (0.1 percentage points) and the year (2.0 percentage points) to 70.6%. Although recent changes were not statistically significant, the employment rate was significantly above rates in 2017. The latest employment rate recorded for the whole of the UK was 75.2%.

The Welsh Senedd's analysis shows that:

• For September 2020 to November 2020 the unemployment rate for people aged 16+ in Wales was 4.6%, compared to 3.8% in the previous quarter (June 2020 to August 2020). This is an increase of 14,000 people from the previous quarter up to 71,000.
• 123,000 employments - 64,600 females and 58,400 males - in Wales have been furloughed as at 31 October 2020. This represents a take up rate of 9%. Data at a local authority level shows the take up rate of furloughed employments is highest in Conwy, Gwynedd and Pembrokeshire (13%) and lowest in Blaenau Gwent, Caerphilly, Neath Port Talbot, Powys, Torfaen and Wrexham (8%).
• The unemployment rate in Wales (4.6%) is lower than England (5.2%) but higher than Scotland (4.4%) and Northern Ireland (3.2%). For the 12 months to September 2020 Swansea West had the highest rate (7.8%) and Carmarthen West and South Pembrokeshire the lowest rate (0.9%).
• The latest data for December 2020 show that the Wales claimant count went up from 58,576 in March 2020 to 112,577 in December 2020, a slight decrease from 113,222 in November 2020.

The FE White Paper, Skills for jobs: lifelong learning for opportunity and growth was released on 21 January. There is plenty of dissection and comment on it - this brief section will focus on labour market information and implications. The paper sets out to:

• Ensure government has up-to-date and expert advice on the labour market and national skills gaps from the Skills and Productivity Board.
• New Local Skills Improvement Plans that shape technical skills provision so that it meets local labour market skills needs and designed by employers, colleges and local stakeholders.
• Continue to roll out T-levels.
• Reform higher technical education (levels 4 and 5) with a new approval system based on employer-led standards.
• Create clear progression routes for students towards higher-level technical qualifications.
• Launch a national recruitment campaign for teachers in further education.
• Introduce comprehensive workforce data collection for FE.
• To embed careers guidance in the life of every school and college, working with the education sector and business to develop a shared approach to careers education.
• Updating the National Careers Service website to become a single source of government-assured careers information for young people and adults with improved content on work experience, applying for roles, and updated labour market information. This is to include access to local and regional careers information and advice for specific groups like parents, students and the unemployed and  interactive careers maps, which will show the occupations and career options that technical or higher technical education can lead to.

The latest round of the ONS fast response experimental statistics on the impact of COVID were released on 21 January:

• According to the Business Impact of Coronavirus (COVID-19) Survey, 26% of UK businesses currently trading said that turnover had decreased by more than 20% compared with what is normally expected for this time of year.
• According to the latest Opinions and Lifestyle Survey, in the week ending 17 January 2021, the proportion of working adults in Great Britain who travelled to work in the last seven days stayed the same as the previous period at 48%.
• According to Springboard, in the week ending 17 January 2021, overall retail footfall in the UK is at 33% when compared with the same week a year ago.
• According to Adzuna, in the latest week ending 15 January 2021, the volume of UK online job adverts decreased by four percentage points from the previous week to 68% of the level seen in the same week last year.
• Adverts decreased in 26 out of 28 categories from the previous week. 'Healthcare and social care' and 'Legal' saw an increase of seven percentage points and two percentage points, respectively.
• Job adverts decreased across all UK countries and English regions, except for Yorkshire and the Humber, which broadly stabilised at 77% of its volume when compared with the same week of last year. London remains the region with the lowest volume of job adverts, at 55% of the volume seen in the same week of last year.

The ONS also published their fortnightly look at the business impact of the COVID pandemic. This is based on responses from the voluntary fortnightly business survey (BICS) about financial performance, workforce, prices, trade, and business resilience.

• 71% of businesses were trading between 29 December 2020 and 10 January 2021. The previous fortnight 84% of businesses were trading.
• 37% of businesses were currently trading in the accommodation and food service activities industry. 49% of businesses in the arts and entertainment industry were trading.
• 10.5% of businesses in the real estate industry have gone out of business since the start of the pandemic.
• A third of businesses in the accommodation and food service activities industry and the other service activities industry had no or low confidence that they would survive the next three months. Over half have less than three months cash reserves.
• Overall 14.7% of UK businesses have low or no confidence of surviving the next three months
• In the reporting period, 32% of the workforce were working virtually (as data above shows this figure is rising). 78% of workers in IT and telecoms and 69% of professional scientific and technical workers are working virtually.
• 25% of businesses that have traded internationally in the last 12 months, and for whom imports or exports have been different to normal expectations, reported that the disruption at the UK borders affected their ability to import goods and services and 18% reported it had affected their ability to export.

Ordinarily this would be the top story, so apologies to the Centre for Cities, as their essential Cities Outlook 2021 was also released this week. As always this report is packed full of insightful data on the state of UK cities. From a graduate labour market perspective, the following findings are particularly interesting:

• Google mobility data shows that at the national level, only two-thirds of people had returned to their workplaces on the eve of November's second national lockdown in England. This was much lower in London - the capital saw its number of workers in the workplace fall first, fall fastest and recover the least. In April, 80% of London's workers were not in their workplace, and this had only recovered to just over half by November  Manchester, Glasgow and other larger cities also trailed the national average, but smaller and medium-sized cities and towns such as Luton and Huddersfield, while still well below pre-lockdown levels, exceeded the national average for workers in the workplace.
• Spending in bricks and-mortar shops had recovered in 51 of 62 cities and large towns, spending online had recovered in all 62. Before the pandemic, urban residents did a fifth of all their spending online. This jumped as the first national lockdown was imposed, and has remained at a higher level even as restrictions have eased. By September, 25% of their spending was done online.
• 36 cities and large towns - 25 of which are located in the North and Midlands - had an above average claimant count rate in March 2020.
• The report also comes with an updated City Monitor which allows users to compare a range of data elements for different cities and comes highly recommended.

In similar vein, PWC and Demos have released their annual Good Growth for Cities report. This measures the performance of the UK's largest cities against ten indicators that the public think are most important when it comes to economic wellbeing:

• Many of the cities that perform strongly in Good Growth look set to withstand the worst impacts of the pandemic. Cities including Edinburgh, Norwich, Aberdeen, Swindon, Portsmouth and Southampton have been relatively less economically impacted. Their sectoral mix and performance on broader social and economic indicators has to some extent provided resilience.
• Those cities that have been hardest hit are projected to bounce back strongest in 2021. Many poorer performing cities have been hit hard by the pandemic, including Liverpool, Southend, Medway, Bradford and Doncaster. These cities have been more vulnerable to the volatility of the pandemic and, while they are expected to grow back strongest in 2021, their economies will still be smaller in 2021 than they were in 2019. In the longer term they will need to build resilience against future crises.
• Before the pandemic, average scores for health and the skills of young people had started to decline. The latest Index also shows that the gap between those cities at the top of the index and those at the bottom had started to widen after many years of narrowing. These are all trends that the pandemic has amplified and are challenges for recovery and 'levelling up'.
• Despite the pandemic, the public's views on what matters most has remained consistent. Health and jobs are consistently the two factors that are most important to the public, followed by housing, income and skills.

The Government has made changes to the Kickstart scheme, to take effect from 3 February. Employers will be able to apply to the Kickstart Scheme without a minimum threshold of 30 jobs. Feedback from graduate employers about the scheme had not been particularly enthusiastic - this may address concerns.

There were two reports from LinkedIn this week. The first is a survey of users finding more optimism as the New Year came around:

• LinkedIn's Workforce Confidence Index shows that people were starting to feel more confident about jobs, finances and their longer term career prospects at the end of December. It was financial confidence that rose most sharply.
• In the latest wave of data, men's confidence has risen on all fronts, but particularly when it comes to their current role: job confidence rose from 29 in early December to 34 in the second half of the month. In the same period, job confidence was at 26 among women, up two points. Comparatively, women are less confident overall, and the score on financial confidence even dropped slightly between early and late December. In the latest data, women scored 5 compared to 16 among men. Women are less than half as likely to be confident about their career progression than men, scoring 7 in the latest data, compared to 22 for men.
• Millennials are now significantly more confident than baby boomers and Gen-X professionals, overtaking boomers as the most confident group by age.

The second is the Emerging Jobs Report, looking at the roles experiencing the highest growth on the site between April to October 2020, compared to the previous year. The top five were:

• E-commerce, up 143% between 2019 and 2020.
• Healthcare supporting staff, up 104%.
• Digital content freelancers, with an estimated 15.6 million listeners to podcasts in the UK in 2020.
• Construction. The majority of construction roles were self-employed, with 31% of those hired holding an MA degree or higher.
• Creative freelances: While there's no question that the COVID-19 pandemic has had an impact on creative industries in the UK, companies have relied on creative freelancers, from writers to illustrators, to work on a project-basis in an agile way.

It is notable that many of these roles are freelance or otherwise non-permanent contract, though.

Totaljobs have published the results of a survey of 5,842 UK workers, conducted 10-14 December

• 10% of workers still received training this year.
• 30% of respondents picked up a new skill or qualification during pandemic.
• 14% did volunteering, charity or community work over the past year.
• 57% think it will take them up to three months to find a new job and 26% feel it’s likely they will become unemployed in 2021.
• 45% said they don't think they will work in the same sector in 2021 as they did in 2020 and 18% said they are looking for work in a more secure industry.
• 35% of respondents who were planning to retire in the next 3 to 5 years claiming they now won't. 60% say it's because they can’t afford it.
• 5% of people who weren't looking to retire in the next three to five years now will, with 32% having lost their jobs and can’t find new ones.

The Institute of Employment Studies have released Laid Low, their examination of the effect of COVID on the low paid:

• Low paid employees have been significantly more likely to have had their hours reduced, been furloughed or lost their jobs than those not in low pay.
• During the first lockdown, the low-paid were twice as likely to either be on furlough or have had their hours reduced - with two thirds of all low-paid employees (nearly four million people) seeing their work affected in one of these ways.
• This was driven by higher rates of low pay in 'shutdown sectors', but within every sector of the economy low paid workers were significantly more likely to have been away from work or to have had fewer hours.
• While the low paid were more likely to return to work as social distancing restrictions began to ease, even through the late summer 30% of low paid workers were not working normally compared with 20% of those earning above the Real Living Wage.
• Low-paid employees were also more than twice as likely to leave their jobs - with around 1 in 20 doing so each quarter (equivalent to over a quarter of a million low paid workers) compared with just 1 in 50 of those not in low pay.
• This in turn will have led to greater impacts on those who are more disadvantaged in the labour market, as they are over-represented in low-paid work - including disabled people, some ethnic minority groups, the youngest and oldest workers, women and those with the lowest qualifications.
• Employment loss in this crisis has been driven by falls in a range of lower-paying jobs - in particular food services, food manufacturing, hospitality, residential care and construction.

Written by

Charlie Ball

Head of higher education intelligence

Prospects