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UK graduate labour market update: 28 November

November 2022

In a bumper labour market update, Charlie Ball takes a look at outcomes for FE learners, new data on salaries, the destinations of Irish graduates - and much more

The big data release this time around covers the fascinating further education (FE) outcome-based success measures for the academic year from 2019 to 2020, from the UK government.

Note that these figures are for those who left during the pandemic, so with that in mind a modest decline is understandable, particularly with the difficulties employers had with assessing and delivering work experience and apprenticeships during COVID.

Of the 781,230 learners who achieved a government funded further education learning aim (including apprenticeships) in the academic 2019/20, in the following year:

  • 74% of learners had a sustained destination in employment, learning, or both, representing a three percentage point drop from 2018/19.
  • 63% of learners had a sustained employment destination, representing a four percentage point drop from 2018/19, but this means that, despite the effects of COVID, sustained employment remained the most common outcome for further education leavers.
  • 24% of learners had a sustained learning destination, representing a one percentage point increase from 2018/19.
  • 92% of learners who achieved an apprenticeship went into a sustained positive destination.
  • 70% of learners who achieved an education and training course went into a sustained positive destination.
  • 59% of learners who completed a traineeship went into a sustained positive destination.

The excellent apprenticeship figures are only underlined by the historic data - despite the huge disruption to apprenticeship provision during COVID (and a corresponding significant drop in numbers), the 145,450 who did complete an apprenticeship went on to similar outcomes to their peers pre-COVID, with only minor variations from historic trends.

Meanwhile, for those who went onto sustained learning:

  • 18% of learners went on to sustained further education.
  • 5% of learners went on to sustained higher education
  • 4% of learners went on to a sustained apprenticeship.

Again, these figures are not dissimilar to those in previous years - this provision, those who deliver it and those who have undertaken it have proven resilient and adaptable.

Of the 491,180 learners who had a sustained employment destination in 2020/21:

  • ·20% had employment in the 'Human health and social work activities' industry section using the Standard Industrial Classification (SIC) definitions of industry, the most common industry section destination - this is hardly surprising considering the demand for healthcare in general and COVID in particular. But it also shows that FE will play a critical role in addressing the long-standing shortages and skills needs in the sector in the future.
  • 15% had employment in the 'Education' industry section - again, another sector with significant endemic and worsening recruitment issues.
  • 10% had employment in the 'Administrative and support service activities' industry section.
  • 10% had employment in the 'Wholesale and retail trade - repair of motor vehicles and motorcycles' industry section. These latter two sectors were hit hard by COVID, especially in small and medium sized-enterprises (SMEs), but recovered strongly. A qualified and motivated workforce is crucial to both sectors in both meeting the post-COVID challenge of new ways of working and engaging with business, retail and hospitality, and of the current difficult economic climate, and this data will bear close monitoring in the future as businesses, particularly the SMEs that are crucial to local economies, navigate changing economic circumstances.

This summary only touches the surface of a complex and fascinating data release. There are tools to explore the data yourself, so do take a look at it.

Earnings data for England and Scotland

Also available through Explore Education is a big drop of Longitudinal Educational Outcomes (LEO) data for English institutions. This is pretty complex data and it's not easily summarised, so I'd advise readers to have a look for themselves.

There seems to be significant variation in median earnings by institution for certain subjects but this may be an artefact of broadly-drawn subject categories.

For the percentage of UK-domiciled graduates in sustained employment, further study or both five years after graduation, four of the top six subjects were related to healthcare (Nursing and midwifery, Medicine and dentistry, Medical sciences, and Health and social care) - this is in line with standard outcomes data.

Earnings are known to be impacted by the region of residence of the graduate so regionally adjusted figures are provided. The effect this had on provider median earnings varied depending on the region of the provider. The North East had the highest proportion of providers where regionally adjusted earnings were more than 5% different to the raw earnings (80% of five providers). This means that providers in the North East were more impacted by the regional destination of their graduates than other regions.

Between the 2014/15 and 2019/20 tax years, 67.2% of providers and subjects saw an increase of over 10% in their graduates' median earnings. A 10% increase is above the rate of inflation between these tax years based on the consumer price inflation that includes owner occupiers' housing costs (CPIH). 

Five years after graduation in the 2019/20 tax year, the average prior attainment of a provider's graduates had a varying impact on median earnings depending on the subject. Prior attainment bands are created using UCAS points for each graduate's top three A-level grades, and then placed in band 1 (top 25%), band 2 (middle 50%) or band 3 (bottom 25%). For Nursing and midwifery, there was little variation in median earnings across prior attainment bands with median earnings in the top band only £800 more than median earnings in the bottom band. For business and management, the top prior attainment band had higher median earnings than the lowest prior attainment band by £17,500.

There is also Scottish data provided through the Scottish Government:

  • The headline figure shows that the median total earnings of UK-domiciled first degree graduates from Scottish Higher Education Institutions (HEIs) who go into employment with no further study was £29,300 five years after graduation.
  • Male graduates from 2013/14 earned on average £2,500 more than female graduates, with male graduates earning £30,700 in 2019/20 compared to £28,200 for female graduates.
  • Comparing this to previous equivalent cohorts of graduates from Scottish HEIs, male graduates from 2012/13 earned on average £2,500 more than female graduates (£29,900 for males and £27,400 for females), and male graduates from 2011/12 earned on average £3,000 more than female graduates (£29,600 for males and £26,600 for females).
  • In 27 out of 35 subjects, males have higher median earnings than females five years after graduation. The largest difference is seen in 'Pharmacology, toxicology and pharmacy', where male graduates had median total earnings of £36,200 compared to £31,500 for female graduates.
  • Female median earnings only exceed male median earnings in 6 out of 35 subjects five years after graduation. Of these subjects, the largest difference is seen in 'Media, journalism and communications' where females had median total earnings of £25,600 compared to £23,400 for male graduates.
  • English was the only subject where the median earnings between males and females was equal, with those graduating in this subject earning £25,300.
  • Disabled graduates earned £2,900 less than graduates with no known disability, with disabled graduates earning £26,400 compared to £29,300 for graduates with no known disability. Graduates from Quintile 1 - the 20% most deprived areas earned £3,300 less than graduates from Quintile 5 - the 20% least deprived areas, with graduates from Quintile 1 earning £27,100 compared to £30,400 for graduates from Quintile 5.

There's much more in this data which is, to my mind, a bit more accessible than the English LEO data - the data on deprivation is particularly interesting.

The largest increase in the employment rate compared with the same period last year was in Yorkshire and The Humber, with Wales seeing the largest decrease.

The number of job vacancies in August to October 2022 was 1,225,000, which is a decrease of 46,000 from May to July 2022. This is according to the November data on the UK labour market from the Office for National Statistics (ONS):

  • In August to October 2022, vacancies were 429,000 (54%) above the January to March 2020 pre-coronavirus (COVID-19) level but only 32,000 (2.7%) above the level of a year ago.
  • In July to September 2022, the number of unemployed people per vacancy was at 1.0, which is unchanged from the previous quarter and indicative of a tight labour market.
  • ONS estimated number of workforce jobs for June 2022 was 35.8 million, which is the first time it has exceeded pre-coronavirus pandemic levels.
  • The total number of jobs includes both employee jobs and self-employment jobs, with both rising in the quarter to June 2022.
  • Employee jobs in June 2022 have continued to grow and are now nearly 31.5 million, which is 710,000 above their December 2019 pre-coronavirus level. However, this rate of growth has not been seen in the self-employment jobs, which remain 548,000 below December 2019 levels.
  • Across industries, the recovery has varied, with half of the sectors still below their pre-pandemic levels in June 2022. The sectors showing a large number of job losses, such as wholesale and retail trade; repair of motor vehicle and motorcycles, and other service activities - jobs mainly done by non-graduates - have been offset by large gains in administration and support activities, human health and social work, and professional, scientific and technical activities - jobs mainly done by graduates.
  • Job-to-job moves continued at a high level in the three months to September at 964,000,  up slightly from the second quarter of 2022.

The highest employment rate estimate in the UK was in the East of England (79.1%) and the lowest was in Northern Ireland (70.1%) for the three months ending September 2022.

The largest increase in the employment rate compared with the same period last year was in Yorkshire and The Humber, up by 2.2 percentage points, with Wales seeing the largest decrease of 1.4 percentage points.

For the three months ending September 2022, the highest unemployment rate estimate in the UK was in the West Midlands (4.7%) and the lowest was in the South West (2.5%); the North East (4.2%) had a record low. 

All regions in the UK saw a decrease in the unemployment rate compared with the same period last year, with London decreasing by the most at 1.4 percentage points, and the West Midlands and Wales decreasing the least by 0.1 percentage points.

Scottish data is here:

  • The estimated unemployment rate (16+) in Scotland was 3.5%, down 0.2 percentage points since December 2019 to February 2020 but up 0.3 percentage points over the quarter. Scotland's unemployment rate was slightly below the UK rate of 3.6%.
  • The estimated employment rate (the proportion of people aged 16-64 in work) in Scotland was 75.3%, down 0.1 percentage points since December 2019 to February 2020 and down 0.1 percentage points over the quarter. Scotland's employment rate was below the UK rate of 75.5%.
  • Early seasonally adjusted estimates for October 2022 from HMRC Pay As You Earn Real Time Information indicate that there were 2.43 million payrolled employees in Scotland, an increase of 2.0% (49,000) compared with February 2020 (pre-pandemic). This compares with the UK where the number of payrolled employees has increased by 2.9% over the same period.

The Senedd summary from Wales is here:

  • Employment levels and vacancies are high, while unemployment is at historically low levels.
  • The number of people who are not economically active is rising.
  • The ONS said the ratio of unemployed people to vacancies hit a record low, underscoring the hiring problems facing many employers in some sectors.

Northern Irish data is here:

  • The latest labour market release shows that payroll employee numbers and earnings have both increased over the year. Measures of total employment (e.g. employment rate and hours worked), unemployment and economic inactivity continue to show improvement over the year but have not yet returned to their pre-pandemic position.
  • The latest HMRC payroll data showed that payrolled employee numbers increased by 0.2% over the month and are 2.5% above the figure recorded in October 2021. Payroll earnings also increased over the month, by 0.5% and are 6.3% above the figure recorded in October 2021.
  • The number of employees receiving pay through HMRC PAYE in NI in October 2022 was 781,300, a 0.2% increase over the month and a 2.5% increase over the year. When considering the annual change in employees by industry sector, the largest percentage increase over the year was recorded in the 'Information and communication' (9.2%) sector - unsurprising given the strength of Belfast as an IT centre.
  • NISRA, acting on behalf of the Department for the Economy, received confirmation that 60 redundancies occurred in October 2022, taking the annual total to 940, the lowest annual total in the time series (since 2000).
  • Over the year November 2021 to October 2022, 1,290 redundancies were proposed.

Again, the Irish graduate labour market is even more centralised to the capital than the UK.

The latest rapid indicators of economic and social change are now available from the ONS:

  • The number of employers proposing redundancies in the week to 13 November 2022 was 143% of the level in the equivalent week of 2021, while the number of potential redundancies reported was 144% of last year's equivalent level - although this remains below the historic trend.
  • On 18 November 2022, the total number of online job adverts had increased by 3% from the previous week, with increases in 20 of the 28 categories. The largest week-on-week increase was in the 'part-time and weekend' category, which rose by 27% but was in line with expected seasonal trends, followed by "education", which rose by 21%. The category recording the largest weekly decrease was "charity and voluntary" (7%). The total number of online job adverts decreased by 14% when compared with the equivalent week of 2021; this is an increase from the previous week being 17% below the equivalent week of 2021.
  • In the latest week, all 12 UK countries and English regions saw increases in the number of online job adverts.

Irish Graduate Outcomes show Dublin's dominance

It's time for the new Graduate Outcomes data for 2021 graduates! This is, of course, the annual publication from the HEA in Ireland, looking at Irish leavers nine months after graduation:

  • 72,148 students graduated from across 23 higher education institutions (54% female, 46% male).
  • Overall, 81.9% of graduates are in employment nine months after graduation (up from 75.9% for the Class of 2000 and 80.1% for the Class of 2018).
  • Employment is highest for Education graduates (94.2%) and lowest for Arts & Humanities graduates (65%).
  • The most common fields of study are Business, Administration & Law (27.2%), Health & Welfare (15.6%) and Arts & Humanities (11.7%).
  • 9% graduated from Undergraduate Honours Degree programmes while 24.7% graduated from Taught Masters programmes.
  • Nine months after graduation, 91% of those with Undergraduate Honours Degrees are working in Ireland. Dublin is the most common county of employment (43.1%), followed by Cork (13.8%) and Galway (7.1%). More than six in ten graduates (62.8%) consider their course Very Relevant or Relevant to their job. Note that again, the Irish graduate labour market is even more centralised to the capital than the UK, where around 22% of graduates started their careers in London.
  • For Postgraduate Taught Graduates, 89.7% were in employment nine months after graduation. In 2020, this was 84.9% and 88.4% in 2018. The proportion of these graduates pursuing further study remained steady at 3.6% in 2021, and 4% in 2020. Unemployment amongst this cohort has decreased, at 4.6% in 2021, down from 8.9% in 2020.

Indeed's November 2022 labour market update warns that the labour market in the UK is still very tight:

  • UK job postings were 45% above the 1 February 2020, pre-pandemic baseline, seasonally adjusted, as of 11 November 2022.
  • Posted wages in UK job postings on Indeed were up by 6.2% year on year in October. But the rate of growth may have peaked and is starting to fall.
  • Like many others (your author included), Indeed warn that although we appear to be headed into recession there is little sign that the labour market is going loosen any time soon.

Indeed have also produced their Hiring and Workplace Trends 2023 report with Glassdoor. Their main conclusions are:

  • Demographic shifts and aging populations mean hiring will remain challenging for years, as labour supply issues will remain. Many countries are expected to see a falling workforce due to simple demographics - in the UK, the workforce is expected to shrink 3.1% between 2026 and 2036, with deaths exceeding births in the UK by 2025.
  • Remote work will continue to thrive, particularly as experienced workers will have leverage over employers in difficult hiring conditions.
  • Company culture is valuable in both attracting and retaining employees, as a way for employers to further distinguish themselves from their competitors. Employees are demanding greater wellbeing in their experience at work, including increased levels of happiness, satisfaction, purpose, and manageable stress.
  • In a similar vein, diversity, equity, and inclusion (DEI) will remain important, as employees continue to care deeply about these initiatives, as well as the progress employers are making - or not. 67% of workers aged 18 to 34 said they would consider turning down a job offer or leaving a company if there was a gender imbalance in company leadership, compared to 58% of workers aged 35 to 44, 58% of workers aged 45 to 54, 39% of workers aged 55 to 64, and 35% of workers aged 65+. And 72% of workers aged 18 to 34 said they would consider turning down a job offer or leaving a company if they did not think that their manager (or potential manager) supported DEI initiatives.

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