UK graduate labour market update: 29 June

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

The Bank of England have issued their quarterly agent's summary of business conditions: 

• Headcount is stabilising, and a growing minority of businesses expected to increase staff numbers, either to meet strengthening demand, because they had paused hiring during the pandemic, or because they had reduced headcount by too much during the pandemic. 
• Concerns about the need for large-scale redundancies in hospitality and leisure abated, but job losses in some sectors, such as travel, aviation and retail are still expected. 
• Recruitment was easier than normal for some, but an increasing proportion of business contacts reported having difficulty recruiting staff - such as in hospitality, freight and logistics, IT, engineering, construction, professional services, nursing, agriculture and food production. 
• Some labour shortages were structural and had existed prior to the outbreak of the pandemic, for example in engineering and technology. But some contacts also attributed hiring difficulties to a variety of COVID-related factors, such as the large number of reopening businesses trying to hire staff at the same time; nervousness among candidates about changing jobs, including due to concerns about future eligibility for the furlough scheme; or staff being unable to return to the UK from overseas. A number of business contacts reported a general shortage of non-UK workers - particularly for low-skilled jobs - which could be related to EU withdrawal or COVID restrictions. 
• Pay growth remained modest overall, with settlements continuing to be in the 1.5 to 2.5% range. But there were some reports of higher pay awards, for example for skilled workers or as compensation for pay freezes in 2020. 

Following last week's ONS figures on the labour market, the House of Commons Library have updated their briefing on the labour market effects of COVID. 

The latest round of the Office for National Statistics (ONS) fast response experimental statistics on the impact of COVID were released on 24 June: 

• 6% of the UK workforce were furloughed last week - this is approximately 1.5 million people. 
• 22% of the workforce worked solely from home last week. 
• The volume of UK online job adverts on 18 June 2021 was at 129% of its February 2020 average level, with all major graduate employment sectors except oil and gas running at or above February 2020 levels. 
• In the week to 19 June 2021, UK retail footfall was at 77% of its level in the equivalent week of 2019. 
• 30% of businesses saw a decrease in turnover in early June 2021 compared with what is normally expected this time of year. 

The Recruitment and Employment Confederation have issued their monthly Jobs Outlook, in conjunction with Savanta ComRes: 

• In the three months to May, their confidence surged by a notable 21 percentage points to net: +11. 
• Employers' confidence in making hiring and investment decisions stood at net: +29, the highest level since March 2016. 
• Employers' intentions to hire permanent staff in both the short and medium term remained stable at net: +24 and net: +26 respectively. 
• The majority (63%) of employers expect no change in their employees' working location once restrictions are eased, compared to before the pandemic. 

The Resolution Foundation have been providing a useful service as a voice of moderation in labour market analysis of late and their new report, Understanding the labour market: pandemic not pandemonium continues in that vein: 

• 80% of those furloughed in the first and second lockdown have now returned to work. 
• 69% of those furloughed in October - those judged most likely to lose their jobs - have returned to work. 
• The unemployment rate now stands at 4.7%, in line with a healthy labour market. 
• But total hours worked are still 5% down on pre-pandemic levels. 
• 10% of those self-employed before the pandemic are no longer employed. 
• The speed of the return to work has led to serious hiring issues, but often in sectors that had pre-pandemic issues with pay, conditions and/or labour supply. 
• The labour market is recovering rapidly but from a very weak position and it has far from recovered entirely, especially for young workers. 

Legal and HR firm Ellis Whittam have been examining employer attitudes to hybrid working: 

• 81% of respondents said they had consulted or are planning to consult with staff about their preferences for post-pandemic working once restrictions are lifted.  
• Of these, 74% said that employees' preferences would 'play a significant part' in forming their approach, while 8% said opinion was so divided that it 'hasn't made things any clear' when it comes to deciding on the right approach to take. 
• This of course means that 19% of respondents said they had not planned to consult with staff; 11% believe this decision needs to be made by the business, while 8% 'already feel they have a good idea what employees want'. 

The Irish Central Statistics Office have released the findings of the Labour Force Survey for Q1 2021 in Ireland: 

• There were 2,230,600 people aged 15 and over in employment in Q1 2021, giving an employment rate of 65.6% for those aged 15 to 64. 
• The number of persons in employment was down 5.0% (-116,600) from 2,347,200 over the year while the employment rate was down from 69.6% in Q1 2020. 
• Because employment was down over the year and the number of absences from work increased over the year, the number of employed persons at work in the reference week fell by 10.2% (-217,700) over the year. 
• There was a consequential fall of 9.9% or 7.6 million hours worked per week from 76.3 million hours in Q1 2020 to 68.7 million hours in Q1 2021. 

Indeed have analysed job vacancies in the UK and Ireland. 

• Job postings were 7.3% above the 1 February, 2020, pre-pandemic baseline, seasonally adjusted, as of 18 June, 2021 in the UK and 6.4% above the baseline in Ireland. 
• The strongest improvement during the latest fortnight was in cleaning & sanitation, followed by hospitality & tourism and retail in the UK and in cleaning & sanitation, sports and food preparation & service in Ireland. 
• Further restrictions on the hospitality industry are due to be lifted on 5 July in Ireland and 19 July in the UK, and this has fuelled increased hiring. 
• In the UK the North East continues to lead in comparison to levels pre-pandemic, followed by Wales. Northern Ireland, London and the South East are the only regions where job postings still haven't returned to pre-pandemic levels.  
• At the cities and large towns level, manufacturing and distribution hubs in the North of England and the Midlands continue to see the strongest job posting recoveries, led by Hull, Middlesbrough and Barnsley. Places with particularly high exposure to hard-hit sectors continue to see the weakest job posting recoveries, notably Aberdeen (oil and gas) and Crawley (aviation). 
• In Ireland, County Kildare continues to lead the recovery, with job postings 26% above the baseline. Limerick saw a deterioration in the latest month and is now 9% below the baseline, while Dublin's recovery remains sluggish (-7%). 

Written by

Charlie Ball

Head of higher education intelligence

Prospects