Writing for the new edition of What do graduates do?, Charlie Ball puts the employment outcomes of 2019/20 graduates into the uniquely challenging context of pandemic lockdowns and labour shortages
This edition of What do graduates do? is a particularly significant one in our goal of understanding the nature and shape of the UK graduate labour market. It covers graduates who left university in the 2019/20 academic year, and who were surveyed using HESA's Graduate Outcomes survey in 2021, so 15 months after graduation.
These dates are highly important. Graduates in this edition left university during the COVID-19 pandemic, and during the summer significant restrictions were in place throughout the country and with specific extra restrictions in certain parts of the country, such as Scotland and parts of the North and Midlands of England.1
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What do graduates do? 2023
At this point, the labour market was very difficult. On 8 July 2020, the government released its Plan for Jobs.2 Crucial measures included:
- a one-off payment of £1,000 to UK employers for every furloughed employee earning above £520 per month who remained continuously employed through to the end of January 2021
- a new Kickstart Scheme, to create six-month work placements aimed at those aged 16 to 24 on Universal Credit and deemed to be at risk of long-term unemployment
- an additional £32million funding over the next two years for the National Careers Service
- £2,000 to employers in England for each new apprentice they hired aged under age 25, and a £1,500 payment for each new apprentice they hired aged 25 and over.
This demonstrates the severity of the issues in the labour market. By the end of June 2020, nearly half a million people had lost their jobs, and the number of people in the workforce continued to fall throughout 2020.3 Job vacancies, meanwhile, reached bottom in June 2020 with vacancies running at around 39% of pre-pandemic levels.4 However, there were already signs that the graduate labour market might escape the worst of the effects.5
By the time that these graduates were surveyed, it had become clear that the labour market in general, and the graduate labour market in particular, had outperformed not merely the worst predictions, but also most of the more optimistic ones.
The large majority of restrictions had been removed some time previously, job vacancy levels returned to pre-pandemic levels in May 2021, and had been comfortably outperforming that level ever since. By December 2021, vacancies were 20 to 30% above pre-pandemic levels, all graduate recruitment sectors (with the exception of energy and law) had vacancies above pre-pandemic levels and had had them for some time, and the narrative switched from job losses to occupational shortages and recruitment difficulties.6
This is the unique context into which this cohort graduated. Having entered some of the most difficult labour market conditions for new graduates in living memory, the market improved rapidly and vigorously and so outcomes for this cohort after 15 months were slightly better than their peers from the previous year, who had graduated into a relatively normal labour market but who were surveyed during severe pandemic restrictions.
As many as 80% of the cohort were employed either full time (with or without further study), or part time, with a small number working unpaid or on a voluntary basis. One fifth were in further study, either solely or alongside work, and Masters qualifications remained the most common qualification for this group.
Just 5.8% were unemployed at the time of the survey, but 28% had a job or, less commonly, a course of study, lined up to go to and so only 4.2% of the cohort were unemployed and did not have something to go to within a month. This is not dissimilar to the figures we might expect for a 'normal' year and demonstrates the employability, resilience and adaptability of UK graduates, and how rapidly the graduate labour market had rebounded from COVID.
Of those who were working, 67% were in permanent, full-time roles and another 15% were on fixed term contracts - note that the latter is very common among professionals on qualifying years, such as junior doctors, and should not be seen as necessarily a sign of insecure employment.
Self-employment had been hit particularly hard by the pandemic, but around 8% of the employed cohort were either self-employed or actively working towards self-employment, and this will be monitored over time to see if COVID has had any long-term effect on the self-employed graduate community.
Even in a pandemic the large majority of new graduates got good jobs. There is no reason to believe that the coming period of economic difficulty will disrupt that.
Location of employment and hybrid working
Arguably one of the most significant long-term effects of the COVID pandemic has been the rapid adoption of hybrid working. By Spring 2022, around 38% of working adults reported working from home for some time during the previous week7, but it was also clear from the data that hybrid working was much more common among high earners, the more qualified and particularly in sectors such as IT and business services. In short, hybrid working is much more common among graduates than non-graduates and it has become the norm for many graduate employees. At present, this tendency is not very clear in the data for new qualifiers.
The data on location of employment is not very dissimilar to pre-pandemic figures. London is the most important location but the large majority of graduates do not, and never will, work in the capital - and most of those who do already hail from the city and its neighbouring regions. But in future, the Graduate Outcomes survey aims to capture not merely where work is based but also where workers tend to work from, and we will be able to examine this topic in much more detail.
Types of work
This cohort of graduates were more likely to be in professional-level employment than their peers a year previously. As many as 74% of working graduates were in professional-level employment after 15 months. The occupations that saw the greatest increases in employment between the two years were:
- 'other nursing professionals', a group including non-hospital nurses, up 860
- marketing professions, up 720
- graphic designers, an occupation that had been hit hard by the pandemic but recovered very rapidly, up 445
- laboratory technicians, an occupation with particular recruitment and retention issues, up 440
- teaching professionals not elsewhere classified (a group including peripatetic teachers of subjects like languages, drama or music), up 430.
All of these roles are considered to be at professional level. The largest fallers were retail assistants (down 535), basic customer service workers (down 455), care home workers, an occupation that saw a large rise during the pandemic (down 410), bank clerks, down 280, and waiters and waitresses, down 240. None of these roles are considered to be professional-level jobs.
Looking forward, the economic signals are not good. Inflation has increased rapidly and to levels not seen for many years, and the expectation is that it will rise significantly further. Energy bills have skyrocketed. The country looks set to enter a very difficult period, but the labour market, particularly for graduates, remains very strong at the time of writing, and it looks as if we head into these much choppier waters with a labour shortage. This is quite unusual in itself and makes prediction even more difficult than usual.
But, even in a pandemic that locked down the UK economy, the large majority of new graduates got good jobs. There is no reason to believe that the coming period of economic difficulty, no matter how severe, will disrupt that. The last few years have been tremendously challenging for graduates and those who support them, but the quality, resilience and adaptability of our graduates has helped them meet challenges in the past, and we can help them meet those that are on their way.
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What do graduates do? 2023
- See the Institute for Government's COVID timeline.
- Plan for Jobs, HM Treasury, July 2020.
- Coronavirus: Impact on the labour market, House of Commons Library, August 2022.
- Data from Adzuna online ad tracking for the ONS, see here.
- See Prospects Luminate's Graduate labour market update from 23 July 2020 for an example of thinking on the then-state of the labour market.
- Our labour market update from 21 December 2021 gives a flavour of the key issues.
- Is hybrid working here to stay?, ONS, May 2022.
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