UK graduate labour market update: 7 February

Charlie Ball's labour market update this week features reports on the impact of the cost of living crisis on students, the social care sector, and workplace culture

The number of online job ads increased by 5% over last week's figures, according to the Office for National Statistics (ONS):

• This is in the week to 27 January. The figures are 19% lower than the equivalent day of 2022
• The number of online job adverts increased in 27 of the 28 job categories and decreased in just one category (wholesale and retail).
• Of the 28 online job advert categories, four were above the level seen in the equivalent period of 2022, while the remaining 24 were below this level.
• All 12 of the UK countries and English regions saw increases in the number of online job adverts in the latest week, however, only Scotland has a higher number of online job adverts when compared with the equivalent period last year.

Chambers of Commerce have found that UK small and medium-sized enterprises (SMEs) are facing their highest ever level of recruitment difficulty:

• Chambers' Quarterly Recruitment Outlook (QRO) for Q4 2022 was drawn from a survey of more than 5,600 businesses, 92% of which were SMEs.
• Attempted recruitment in Q4 remained virtually unchanged from the previous quarter, with 61% of firms looking to find staff (62% in Q3 2022).
• 82% attempting to recruit reported recruitment difficulties, up from 76% in Q3.
• 87% of firms in the hospitality sector saw difficulties recruiting, with 87% reporting difficulties. This is closely followed by the manufacturing sector on 85%, and the construction sector; professional services; and public, education, health sector - all key graduate recruiters - all on 83%.

The Centre for Cities have launched their 2023 Cities Outlook report. This is an essential annual report for anyone interested in local economies, and this year focuses on hidden unemployment.

• The Centre has defined 'hidden unemployment' as being inactive workers who are not inactive due to studying or retirement, and note that people may leave the labour market and stop looking for work if they are discouraged, believe there are no jobs available (or no good positions) or cannot work because of health issues, and become registered as 'inactive' when they might be able to work if given better support.
• The Centre argues that nationally, there are 3.5 million people who are involuntarily inactive - almost three times the number who are unemployed. Nearly two million live in cities, which is about 60% of the total.
• Eight of the ten places with the highest rates are northern cities, with over one in eight of the working age population in Barnsley, Sunderland, Hull, Middlesbrough, Blackburn and Mansfield involuntarily inactive.
• Nationally, unemployment rates are two percentage points higher for people with no qualifications compared to those who have a degree. About half of people with no qualifications are economically inactive (for all reasons combined, which include being a university student), against 11% of those with Level 4 and above.
• Cities with the highest percentage of residents with no formal qualifications also have the largest hidden unemployment rates.
• Weaker economies account for a larger share of Britain's hidden unemployment relative to their share of job postings. This suggests they are suffering from a job shortage, with too few available compared to the size of the hidden unemployed population. There are 38 cities in this category and most are in the North or Wales. In total, all cities in the North or Wales account for 16% of vacancies but 21% of hidden unemployed.
• These places don't just have too few jobs, it's that many are low-skilled, low-paid roles. This means two main reasons why it is likely to contribute to economic inactivity.
• The prospect of low pay may deter people from entering the jobs market.
• Many low-skilled roles tend to be physically demanding so increasing the chances of people withdrawing from the labour market for health issues.
• The Centre also looks at the rate of creation of 'new economy' jobs: knowledge-intensive sectors like fintech and advanced manufacturing that are at the forefront of new technologies and innovations - and largely employ graduates. Most of the main centres are in the south, but Warrington, Leeds, Edinburgh and Manchester are at or above the national average for creation of these roles.

Professional services firm OC Tanner have released their 2023 Global Culture report, looking at workplaces around the world:

• Employees say the biggest incentive to work in the office is interaction with their work friends (42%).
• 76% consider their workplace a community and 72% say it's important for them to feel like part of a community at work.
• 59% of hybrid and remote employees said their organisation's culture has improved since going hybrid or remote.
• 48% say it's easier to create a sense of community in their new work environment.
• 79% of leaders think they have a 'good sense' of what their employees want, only 48% of employees agree.
• 29% of employees say there is a notable conflict between what their managers want and what their co-workers want, and only a little more than half (54%) believe their managers are 'on my side'.
• Mid- and entry-level leaders are 33% and 47% less likely to feel appreciated, respectively, compared to senior leaders.
• 61% of leaders report having more general responsibilities at work since before the pandemic, versus 34% of individual contributors who say the same.
• 87% of companies report they have skills gaps now or expect to have gaps within the next five years.
• 52% of employees consider themselves to be generalists. 50% of employees said their organisation favours employees with a broad range of skills across multiple disciplines, 59% of employees said their organisation employs more generalists than specialists and 63% of employees said their organisation hired more generalists than specialists in the past year.

WorkL, the UK business services organisation specialising in staff surveys, have issued their 2022/23 Employee Experience Report. This data comes from over 300,000 employees across 27,000 organisations and 26 industries. Findings include:

• Flexible working is now not a 'nice to have' but a necessity for organisations looking to recruit top talent.
• Employees score lower on Reward & Recognition than they did this time last year. Disabled employees in particular have had a 7% decrease year-on-year in feeling they are recognised for the work that they do and 8% decrease in feeling fairly paid.
• A full quarter of employees are considered a flight risk, with multiple negative opinions of their pay, job satisfaction, opportunities and relationship with their managers.
• Employees working in purpose-led careers are more engaged in their job roles compared to employees in other industries with employees in charitable and not-for-profit organisations scoring the highest engagement with their roles. Employees value 'communication' as a high priority when asked how to improve their workplace engagement.
• Pay initially became less of a priority for employees with the first lockdown, but since then has continually increased in importance.
• The importance of the office to employees followed a reverse pattern, becoming more of a priority as employees initially got used to working at home, but has now fallen to a lower level of importance than pre-pandemic.

The Resolution Foundation has examined the labour force of the care industry:

• Working in social care has many positives, especially compared to other low-paid jobs. The human element of the role is immensely satisfying, and workers view their work as high-skilled and high-responsibility. Many also enjoy a significant amount of autonomy. Social care workers report they are satisfied with their jobs.
• There is currently an acute shortage of care workers. In 2021/22, 11.6% of frontline care jobs in England were vacant, up 4.7% in 2012/13.
• This has knock on effects on workload and safety. In 1992, 59% of social care workers said they worked under a high degree of tension. By 2017, that had risen to 68%, 14 percentage points higher than those in other low-paid jobs.
• Social care work is low paid relative to the skills required. Median hourly pay among frontline care workers stood at £10.90 in April 2022, well below the economy-wide average of £14.47 and less than rates offered in low-paid jobs in offices, call centres, transport, and nursing assistants in the public sector. Moreover, the pay 'premium' that social care workers have historically commanded relative to other low-paid jobs has almost vanished.
• However, care workers are less likely to face redundancy or dismissal than across the economy as a whole, and especially less likely to do so than many other low-paid jobs. Frontline care workers are more likely than workers in the wider economy to move jobs in a given quarter. From 2011 to 2020, 3.3% of frontline care workers moved jobs per quarter, versus 2.3% across the economy as a whole. Only low-paid workers in leisure (4.3% per quarter), call centres (4.8% per quarter), and hospitality (6.0% per quarter) make job moves at a higher rate. But an important difference between frontline care workers and other low-paid workers (and workers in the wider economy) is that care workers' job moves are more likely to be within their job category rather than to a job in a different sector or occupation. Care workers generally do not feel significant loyalty to employers who they feel treat them poorly, but are loyal to the sector as a whole.

The Sutton Trust reports on the impact of the cost of living crisis on university students:

• 33% of students from working class families say they have skipped meals to save on food costs.
• 63% of students are spending less on food and essentials as a result of the rising cost of living.
• 43% of students said they are using less electricity or gas in their homes.
• 24% of students say they are less likely to finish their degree as a result of the cost of living crisis.
• The energy support scheme has been one of the government's key elements of support for households during the cost of living crisis. The scheme has given every household in England, Wales and Scotland £400 to help with energy costs. If someone's landlord received this payment from their energy company they should have passed this £400 onto the individual - including for students. However, 40% of students living in private rental accommodation said they have not received this payment from either their landlord or their energy company.

Written by

Charlie Ball

Head of labour market intelligence

Jisc