Graduate labour market update: jobs of the future

Charlie Ball summarises the latest data and reports on the labour market, including his own study of the jobs of the future and details of the recruitment challenges employers are currently facing

Two new reports have been published by Universities UK. The first is a survey of 3,505 UK graduates and 3,506 UK business leaders by Censuswide:

• 73% of graduates say they found their job/role in under a year and, on average, it takes UK graduates 11.8 months to find a job that reflects their graduate career ambitions.
• 79% of graduates say going to university enabled them to build skills that have proved professionally valuable.
• 71% of first in their family UK graduates said that going to university gave them opportunities they might not have otherwise had.
• 97% of senior managers stated that graduates reach managerial positions faster, as a result of going to university.
• UK graduates see their salary increase by 8.2% on average with their first promotion.

The second is the Jobs of the future report, which I authored. This uses data from a range of sources - Annual Population Survey, Unit for Future Skills, Graduate Outcomes, Census and DfE data to name a few - to build a picture of graduate supply and demand.

• At the end of 2021, there were over 15.3 million people in the UK workforce with a degree or equivalent qualifications, or 49.7% of the workforce. At the same time, over 16.2 million people were employed in professional-level jobs, or 50.5% of all UK jobs.
• 26% of UK workers are underqualified for the job they're in. The UK currently has a particular shortage of teachers, healthcare workers and STEM professionals.
• At the end of 2021, 86.7% of graduates were employed, compared to 70.2% of non-graduates.
• Of graduates who graduated in 2021, 78% were employed in high-skilled jobs 15 months after graduating.
• 3.2% of graduates were unemployed, compared to 5.5% of non-graduates.
• The median salary for a graduate in England was £36,000, compared to £26,000 for non-graduates.
• In 2022, the number of people working in graduate-level employment in the UK rose by 469,800. Jobs below degree level fell by 165,400.
• Between 2004 and 2021, the number of people in the UK working in graduate-level jobs increased by 4.75 million, whilst the number of people working in jobs below degree level fell by 865,000.
• 16 out of 20 occupations with the highest projected growth in numbers to 2035 are graduate-level jobs.
• The largest increase in jobs due to AI by education level will be at degree level.
• Due to AI, there will be around a 10% net increase in roles that require a degree over the next 20 years.

Some of these figures will be familiar to those reading these updates or listening to me speak over the last year or so.

Elsewhere, the Recruitment & Employment Confederation's (REC) new Report on Jobs adds more evidence that the labour market is loosening.

Permanent placements contracted at the quickest rate for just over three years, while temp billings growth weakened notably from June, as business confidence falls and a recruitment slowdown and increased redundancies means more workers are becoming available. However, inflation and cost of living pressures mean that starting salaries are continuing to rise.

Note, though, that we're still talking about an increase in vacancy numbers, it's just that the rate of increase has slowed substantially, and it is largely driven by the private sector taking on temporary workers rather than permanent ones. REC are being admirably cautious about this but it does look as if the jobs market as perceived by recruitment agencies has slowed down significantly this summer.

However British Chambers of Commerce see less loosening of the market. Its Quarterly Recruitment Outlook (QRO), a survey of 4,800 UK firms of all sectors and sizes, shows that the percentage of firms facing recruitment difficulties stands at 79% in Q2 2023, only slightly down from the historical high of 82% in Q4 2022. This has now remained above 75% for the last two years:

• Attempted recruitment in Q1 was virtually unchanged from the previous quarter, with 60% of those surveyed looking to find staff (59% in Q1 2023). 
• While recruitment difficulties are being experienced across the economy, the construction & engineering, and hospitality sectors were the most likely to report problems with 86% of firms reporting difficulties (up from 81% and 83% respectively in Q1). This is closely followed by manufacturing on 81% (83% Q1) and then professional services on 77% (79% Q1).
• Of the firms in the construction & engineering sector facing recruitment difficulties, 76% faced difficulties in finding skilled manual/technical workers. However, for hospitality businesses that struggled to recruit, 69% faced difficulties in finding semi/unskilled workers, so there are issues across the board with worker availability but they will be experienced in differently depending on the sector we're examining.
• Investment in training remains low with 27% of firms reporting an increase in their training investment plans over the last three months (the same as Q1), while 14% report a drop (also the same).
• BCC tends to be more oriented towards smaller and more local firms and this is in line with the continued stronger performances of the small employer sectors shown in the new Office for National Statistics (ONS) figures below. If and when the labour market starts to turn down, different employer groups will experience it differently at first and we will keep an eye on those trends to help readers make sense of what is happening.

The latest data from small businesses with fewer than 20 employees, from the ONS, shows that paid jobs increased by 4% in June 2023 compared with May 2023 and were 1% higher than last year.

Jobs in IT and telecoms and professional and scientific services are above the levels of four years ago in 2019 - both these sectors are very strong graduate recruiters. All other industries are below 2019 levels.

The total number of online job adverts decreased by 3% on 28 July 2023 when compared with previous week and was 10% below the level seen in the equivalent period of last year, according to data from Adzuna. The graph below shows trends since 2018. February 2020, when the COVID pandemic restrictions began in the UK, is 100, so we can see things have not changed much this year.

Date,Percentage of online job adverts
07-Feb-18,127.3
15-Feb-18,130.4
22-Feb-18,128.7
01-Mar-18,128.6
08-Mar-18,115.8
15-Mar-18,130.9
22-Mar-18,128
29-Mar-18,125.1
05-Apr-18,124.2
12-Apr-18,123.4
23-Apr-18,125.4
26-Apr-18,130.4
03-May-18,131.9
10-May-18,128.1
17-May-18,134.4
25-May-18,136.2
31-May-18,130.3
08-Jun-18,133.7
15-Jun-18,130.9
22-Jun-18,132.6
29-Jun-18,134
06-Jul-18,129
12-Jul-18,131.5
19-Jul-18,125.6
26-Jul-18,129.7
02-Aug-18,128.6
09-Aug-18,127.9
16-Aug-18,129.4
23-Aug-18,125.8
30-Aug-18,122.8
06-Sep-18,124.3
13-Sep-18,126.6
20-Sep-18,128.8
27-Sep-18,130.4
05-Oct-18,132.1
11-Oct-18,132.2
19-Oct-18,127.7
25-Oct-18,129.2
01-Nov-18,125.2
09-Nov-18,127.3
15-Nov-18,127.2
23-Nov-18,128.2
30-Nov-18,128.5
07-Dec-18,124.8
14-Dec-18,118.7
20-Dec-18,112.6
27-Dec-18,105.7
04-Jan-19,98.9
11-Jan-19,108
18-Jan-19,111.6
24-Jan-19,112.9
01-Feb-19,122.2
07-Feb-19,121.8
15-Feb-19,126.8
22-Feb-19,123.7
28-Feb-19,120.6
07-Mar-19,118.9
14-Mar-19,117.3
21-Mar-19,129
28-Mar-19,121.2
04-Apr-19,118.7
11-Apr-19,119.6
18-Apr-19,116.2
25-Apr-19,111.9
02-May-19,111
09-May-19,110.8
16-May-19,116.2
23-May-19,115.9
30-May-19,111.6
06-Jun-19,114.1
13-Jun-19,113.3
20-Jun-19,116.5
27-Jun-19,107
04-Jul-19,112.8
11-Jul-19,118.5
18-Jul-19,117.6
25-Jul-19,111.5
01-Aug-19,108.9
08-Aug-19,111.8
15-Aug-19,112.2
22-Aug-19,111.9
29-Aug-19,106.9
05-Sep-19,106
12-Sep-19,106.8
19-Sep-19,106.1
26-Sep-19,109.5
03-Oct-19,109.6
10-Oct-19,110.8
17-Oct-19,105.8
24-Oct-19,111.7
31-Oct-19,110.8
07-Nov-19,108.7
14-Nov-19,106.7
21-Nov-19,104.7
28-Nov-19,102.7
05-Dec-19,106.4
12-Dec-19,99.4
19-Dec-19,92.4
27-Dec-19,85.4
03-Jan-20,88.2
10-Jan-20,91.4
16-Jan-20,94.7
23-Jan-20,99.2
30-Jan-20,99.9
07-Feb-20,101.3
13-Feb-20,104.1
21-Feb-20,95.5
27-Feb-20,99.2
06-Mar-20,102.8
12-Mar-20,95.4
20-Mar-20,92
27-Mar-20,80.9
03-Apr-20,68.4
09-Apr-20,62.4
17-Apr-20,53.1
24-Apr-20,45.2
01-May-20,41.2
07-May-20,41.2
15-May-20,37.5
22-May-20,39
29-May-20,39.7
05-Jun-20,40.7
12-Jun-20,44.4
19-Jun-20,43.8
26-Jun-20,45.7
03-Jul-20,43
10-Jul-20,44.4
17-Jul-20,48.6
24-Jul-20,47.6
31-Jul-20,49.7
07-Aug-20,57.5
14-Aug-20,57.9
21-Aug-20,57.2
28-Aug-20,58.3
04-Sep-20,53.3
11-Sep-20,56.8
18-Sep-20,58.3
25-Sep-20,62.3
02-Oct-20,63.6
09-Oct-20,65.6
16-Oct-20,68
23-Oct-20,71.8
30-Oct-20,71.8
06-Nov-20,68.9
13-Nov-20,70
20-Nov-20,70.7
27-Nov-20,75.2
04-Dec-20,73.3
11-Dec-20,68
18-Dec-20,70.7
24-Dec-20,71.5
31-Dec-20,63.7
08-Jan-21,61.9
15-Jan-21,61.3
22-Jan-21,68.9
29-Jan-21,75.2
05-Feb-21,77.1
12-Feb-21,79.1
19-Feb-21,79.4
26-Feb-21,79.7
05-Mar-21,82.9
12-Mar-21,87.3
19-Mar-21,88.3
26-Mar-21,89.7
01-Apr-21,91.4
09-Apr-21,93.3
16-Apr-21,95.3
23-Apr-21,97.6
30-Apr-21,99.6
07-May-21,101.7
14-May-21,109.2
21-May-21,112.9
28-May-21,122.8
04-Jun-21,123.8
11-Jun-21,121.5
18-Jun-21,124.2
25-Jun-21,125.5
02-Jul-21,130.5
09-Jul-21,121.8
16-Jul-21,122.9
23-Jul-21,123.2
30-Jul-21,126.2
06-Aug-21,119.1
13-Aug-21,118.8
20-Aug-21,118.7
27-Aug-21,116.7
03-Sep-21,120.1
10-Sep-21,120.7
17-Sep-21,123.7
24-Sep-21,126.4
01-Oct-21,129.8
08-Oct-21,129.2
15-Oct-21,130.3
22-Oct-21,126.6
29-Oct-21,133.6
05-Nov-21,139.7
12-Nov-21,137
19-Nov-21,136
26-Nov-21,136.7
03-Dec-21,134.8
10-Dec-21,132.8
17-Dec-21,126.2
24-Dec-21,120.8
31-Dec-21,115.7
07-Jan-22,111.6
14-Jan-22,115.3
21-Jan-22,130.8
28-Jan-22,133.5
04-Feb-22,138.8
11-Feb-22,139.2
18-Feb-22,139.9
25-Feb-22,138.7
04-Mar-22,139.4
14-Mar-22,140.2
21-Mar-22,130.1
25-Mar-22,129.5
01-Apr-22,130.5
08-Apr-22,133
14-Apr-22,138.6
22-Apr-22,129.7
29-Apr-22,131.1
06-May-22,132.5
13-May-22,128.9
20-May-22,138.7
27-May-22,133.4
03-Jun-22,128.1
10-Jun-22,122.8
17-Jun-22,118.4
24-Jun-22,116.1
01-Jul-22,124.1
08-Jul-22,121.3
15-Jul-22,118.9
22-Jul-22,120.4
29-Jul-22,117.8
05-Aug-22,115.2
12-Aug-22,114.7
19-Aug-22,115.1
26-Aug-22,114.3
02-Sep-22,109.6
09-Sep-22,106.4
16-Sep-22,110.8
23-Sep-22,109.1
30-Sep-22,110.7
07-Oct-22,114.3
14-Oct-22,115.5
21-Oct-22,114.9
28-Oct-22,114.6
07-Nov-22,112.3
11-Nov-22,113.7
18-Nov-22,116.1
25-Nov-22,113.9
02-Dec-22,113
09-Dec-22,109.4
16-Dec-22,104.8
22-Dec-22,102
30-Dec-22,95.9
06-Jan-23,92
13-Jan-23,99.6
20-Jan-23,101
27-Jan-23,107.5
03-Feb-23,108.5
10-Feb-23,108.7
17-Feb-23,108.3
24-Feb-23,106.3
03-Mar-23,107.4
10-Mar-23,109.2
17-Mar-23,107.4
24-Mar-23,108.1
31-Mar-23,106.8
06-Apr-23,107
14-Apr-23,104
21-Apr-23,103.2
28-Apr-23,104.2
05-May-23,102.8
12-May-23,104.7
19-May-23,105.1
26-May-23,107
02-Jun-23,108.9
09-Jun-23,108.1
16-Jun-23,110.4
23-Jun-23,109.3
30-Jun-23,109
07-Jul-23,108.3
14-Jul-23,108.8
21-Jul-23,106.7
28-Jul-23,103

Meanwhile, this chart (below) shows the relative levels of the key UK employment sectors at 28 July. Again, 100 is the level of each sector in February 2020.

Sector,relative levels of the key UK employment sectors
Health and social care,80.9
Travel and tourism,96
Transport logistics and warehouse,128.6
Scientific QA,91
Sales,77.5
Wholesale and retail,176.4
Property,81.3
Marketing advertising and PR,74.4
Manufacturing,123.1
Management exec and consulting,93.9
Legal,79.2
IT computing and software,74.9
HR and recruitment,107
Facilities and maintenance,134.5
Engineering,116.8
Energy oil and gas,105.9
Education,146.5
Customer service and support,108.3
Creative design arts and media,90.9
Construction and trades,103.2
Catering and hospitality,144.1
Admin clerical and secretarial,103.2
Accounting and finance,92.2

Finally, the US firm ActivTrak have released findings from an analysis of 134,260 anonymised employees between January 1, 2022 and June 30, 2023 across 20 industries.

• Total work time remained flat quarter-over-quarter, decreasing a mere six minutes year-over-year for a total of 7.6 hours per day.
• The length of the workday decreased 33 minutes quarter-over-quarter, and 37 minutes year-over-year, suggesting improved time management as productivity and focus remained steady.
• 28% of employees work 10+ hour days, and are considered overutilised. Overutiliisation has, however, fallen 3% in Q2, and year-over-year, possibly related to small improvements in multitasking.

Written by

Charlie Ball

Head of labour market intelligence

Jisc