UK graduate labour market update: 27 September

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

The Bank of England released their Quarterly Agents' summary of business conditions on 23 September:

• Most sectors of the economy reported a pickup in hiring and staff turnover. Demand for staff was particularly strong in professional services, hospitality, logistics distribution and warehousing, construction and engineering. In hospitality, some contacts reported needing to recruit workers to replace furloughed staff who had switched jobs during closed periods.
• Recruitment difficulties were reported to have become more widespread and acute in recent months, with contacts reporting increasing numbers of unfilled vacancies. Companies in a wide range of sectors reported severe shortages of staff.
• Labour shortages are attributed to a combination of factors, such as demand recovering more quickly than expected and having shed too many workers in the early stages of the pandemic. Some companies reported a reduction in the availability of EU workers due to travel restrictions relating to Brexit and COVID. In some sectors, like haulage, an ageing workforce had meant that more workers had left jobs than could be replaced in the short term. And some contacts reported workers switching to jobs that offered better working conditions, more flexibility or greater security.
• To address skills shortages, contacts said they were: launching or expanding apprenticeship programmes, hiring remote workers, increasing in-house training, investing in automation, streamlining product lines, increasing hours of existing staff or redeploying staff, and improving non-pay benefits and offering flexible working.
• Companies have also increased pay settlements somewhat on average, with awards now typically around 2% to 3%. Increases have been significantly higher for skills in particularly short supply, ranging from 10% to 40%. One-off bonuses to retain staff were also reported to have become more commonplace for those with such skills.

The latest round of the Office for National Statistics' (ONS) fast response experimental statistics on the impact of COVID were released on 23 September:

• 6% of the workforce is currently furloughed.
• 70% of the workforce is at their normal place of work.
• According to Adzuna, on 17 September 2021, the total volume of online job adverts in the UK stood at 133% of its February 2020 average level.
• Of the 28 categories, 23 saw a weekly increase in the number of online job adverts.
• In the latest week, volumes of online job adverts remained above their February 2020 average levels in all UK countries and English regions. The highest of these were in Northern Ireland and the North East, at 182% and 180% of their February 2020 average levels, respectively. In comparison, this was lowest in London and the South East at 116% and 123% in the latest week, respectively.

The ONS have also produced an interesting analysis of recruitment difficulties:

• Between 23 August and 5 September 2021, 30% of hospitality businesses said that vacancies were more difficult to fill than normal. This compares with 13% across all industries (up from 9% in early August).
• Vacancy challenges are more common for larger businesses. Excluding those with fewer than ten employees, 41% of businesses across all industries were struggling to fill vacancies in late August, up from 32% earlier in the month.
• Aside from hospitality (30%), the water (27%) and health (23%) industries were most likely to be finding it more difficult than normal to recruit staff in late August.
• In the transport and storage sector, 15% of businesses were struggling to fill jobs. This may partly reflect reports of a shortage of heavy goods vehicle (HGV) drivers. However, despite being mainly employed in transport and storage, HGV drivers only account for around 1 in 10 jobs in the industry as a whole.

The Recruitment & Employment Confederation's (REC) new Report on Jobs is out:

• In the week of 13 to 19 September, there were 1.90 million active job adverts in the UK, a new record high.
• There were around 223,000 new job adverts posted in the same week - the second highest weekly figure since data collection began.
• Every upper tier local authority in the UK recorded at least a marginal increase in active job postings last week.
• There was a significant increase in adverts for education roles as students returned to classrooms in September. Support roles such as school secretaries (+17.6%), school midday and crossing patrol occupations (+16.4%), educational support assistants (+9.8%), and caretakers (+9.6%) recorded the highest increases in active job postings in the week of 13-19 September. Other rises in graduate professions included in podiatrists (+12%), town planners (+10%) and market researchers (+9.2%)

Job satisfaction rates 'resilient'

The Resolution Foundation have looked at long-term job satisfaction trends for the Nuffield Foundation:

• Despite huge changes over the past 30 years - from the growth of female, graduate and migrant workers, to the decline of manufacturing and overhaul of HR and management practices - the report shows that employees' overall job satisfaction levels remained resilient at around 60% in the 1990s and 2000s, before falling to 52% immediately following the financial crisis and recovering slightly to 56% by 2017 to 2019.
• Contrary to the popular narrative that people are increasingly trapped in worthless jobs, the report finds that the proportion of employees who say their work is 'helpful to others' has actually increased (from 67% in 1989 to 79% in 2015). It goes on to find that more people say their job 'offers prospects for advancement' (up from 22% to 35% over the same period), and that they are 'proud of where they work' (up from 77% to 86% between 1992 and 2017).
• However, the report notes that the 'job satisfaction premium' that low earners used to enjoy in the early 1990s - 73% reported high job satisfaction in 1991-1992, compared to 59% among high-paid employees - has deteriorated over the past three decades. Today, overall job satisfaction rates have 'levelled down' to just under 60% per cent among both high and low-paid employees.
• The report finds that the share of employees who say they work 'at very high speed' for most of the time has increased from 23% to 45% between 1992 and 2017, as has the proportion of employees that say they feel 'used up at the end of the day' (up from 20% to 29%, with an even bigger increase among female workers). Over a similar time period (1989 to 2015) stress at work has increased by a quarter (from 30% to 38%).
• A related cause of stress at work is the sharp decline in workers having a say over the decisions that change how their work is done. This decline has been particularly stark for low earners - falling 44% to 27% between 1992 and 2017.

The Institute of Fiscal Studies have been doing very interesting work with LEO data to examine graduate migration. Unfortunately, they've opted to call the report London Calling, which has been used approximately 8,000 times before for similar reports. Despite this, it's still worth reading:

• At age 27, around 35% of graduates and 15% of non-graduates have moved away from the travel to work area (TTWA) where they lived at age 16.
• Around two-fifths of the difference in mobility between graduates and non-graduates can be explained by differences in their background characteristics, such as socio-economic status, prior educational attainment and area of origin. All else equal, graduates are ten percentage points more likely to have moved by age 27 than non-graduates.
• Graduates of more selective universities are more mobile, even controlling for background characteristics and subject choice.
• Graduates tend to move to large cities, especially to London. Around a quarter of graduates who move go to London. In contrast, non-graduates do not disproportionately move to London and other large cities.
• Graduates from smaller cities or rural areas are almost as likely to move to another major city as to London.
• In general, places with high average earnings attract graduates through migration. Graduates who grew up in places with low average earnings are more likely to move away.
• For a given level of average earnings, cities attract and retain more graduates than other areas. In addition to London, Brighton, Bristol and Leeds all gain large numbers of graduates through migration.
• But there is some evidence that this is not the whole story, as cities such as Brighton and Bristol attract and retain graduates despite not having particularly high average earnings. Graduates from Manchester, Birmingham, Leeds and Bristol are quite a lot less likely to move away than the average earnings in those places would predict.
• In Sheffield, Liverpool, Canterbury, Plymouth, Newcastle and Lincoln, more than half of graduate in-migrants also went to university in the area.
• By enabling people to move to labour markets that offer better career opportunities, higher education appears to reduce inequality of opportunity between people who grow up in different areas.
• People from the bottom socio-economic status (SES) quintile are 16 percentage points less likely to have moved by age 27 than people from the top SES quintile, though most of this difference can be explained by differences in prior attainment and other background characteristics
• Young adults of Indian and Pakistani ethnicity are around seven percentage points less likely to have moved by age 27 than White British people, even controlling for differences in back- ground characteristics.
• All else equal, young people from the poorest families are only around four percentage points more likely to move if they graduate from university. Black and Asian graduates are no more mobile than Black and Asian non-graduates.
• Of those who do move, low-SES graduates are less likely to move to major cities than graduates from higher-SES backgrounds, even controlling for background characteristics
• On average, male graduates who move earn 10% more at age 27 than otherwise similar graduates who do not move. For women, the estimated gain to moving is 4%
• Estimated 'moving premiums' are very similar across SES and ethnic groups, with the exception of Asian women, for whom movers earn less than stayers.
• There is very little variation in premiums across different types of institutions - graduates from Russell Group universities gain no more, or less, than otherwise similar graduates from less selective universities.
• There is large variation in moving premiums across subjects. Moving is associated with little or no gain in earnings (controlling for background characteristics) in nursing, education and social care, but very large gains among graduates of law, technology, languages, business and economics - particularly for graduates who move to London. This suggests that moving to certain areas might be necessary to take full advantage of the returns to some degrees.

Indeed have provided an update on UK vacancies:

• Job postings on Indeed UK levelled off in the latest fortnight to the 10 September. That followed a sustained run of strong growth over the past few months but still leaves postings well above their pre-pandemic level. Job postings were 26.1% above the 1 February 2020, pre-pandemic baseline, seasonally adjusted, as of 10 September 2021.
• The veterinary category saw the biggest improvement in trend during the past fortnight. This was followed by education & instruction and dental.
• The regional picture remained little changed in the past fortnight. London remains behind, with job postings 10% above pre-pandemic levels.
• Posting recovery has been 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. Aberdeen (oil and gas) and Crawley (aerospace) are the only two cities and large towns where job postings have not yet recovered to pre-pandemic levels.

Irish labour market update

Indeed also have an update from Ireland:

• Job postings on Indeed Ireland were 32.2% above the 1 February, 2020, pre-pandemic baseline, seasonally adjusted, as of 10 September, 2021.
• Over the last four weeks, the majority of sectors made gains. The strongest improvements were in the physicians & surgeons, social science and chemical engineering categories. Only a handful of sectors saw weakening trends, including medical information, agriculture and childcare (in each case postings remained well above pre-pandemic levels).
• Looking at trends in the five largest counties by job posting volume, County Kildare leads the recovery, with job postings now 64% above pre-pandemic levels. Galway follows at 45%. Limerick and Dublin remain laggards, with job postings 13% and 18% above the baseline respectively.

This picture is also reinforced by this relatively optimistic view of the graduate labour market from the Irish Times. Areas of shortages at the moment include:

• Analytical chemists, medical scientists
• Design, process and quality control/assurance engineer
• Engineers (mechanical, electrical, automation, validation)
• IT product/project managers
• Software developers/engineers
• IT analysts/engineers
• IT technicians with foreign languages
• Accountants with industry specific experience
• Medical practitioners
• Nurses
• Healthcare assistants
• Quantity surveyors
• CNC programmers
• Animators

This list is really rather similar to the graduate occupational shortages in the UK.

Written by

Charlie Ball

Head of higher education intelligence

Prospects