Charlie Ball, head of higher education intelligence at Prospects, looks ahead and considers what's in store for the graduate labour market in 2019
It's never easy - or, often, wise - to make predictions about the labour market, and the ongoing, ever-more serious absence of clarity surrounding Brexit means 2019 is about the worst year to do it. The only certainty is uncertainty, at least until we know the terms (or lack of them) under which the UK is to leave the European Union (EU).
Looking back, 2018 again saw a favourable graduate jobs market, but what might we expect in 2019?
Occupational shortages could intensify
The British Chambers of Commerce began the New Year with the release of findings from their Quarterly Economic Survey for Q4 2018. The message was consistent with previous findings and came through loud and clear - businesses are struggling to recruit key professionals.
As many as 81% of manufacturers reported recruitment difficulties, and just before Christmas the Bank of England reported that businesses were struggling to recruit in 'IT, professional services, construction, engineering, hospitality, health and social care and logistics', many of these being industries where particular occupations face a shortage of graduates.
These squeezes will only get more serious as the UK has to forge new relationships with the countries from which it draws a lot of the graduate professionals it needs to cover national shortages of highly skilled workers.
Graduate underemployment to persist
A great deal of ink has been spilled on this subject, but little headway has been made in understanding it.
How can we have, on the one hand, too few graduates entering many roles (including some that are theoretically open to any degree subject), but, on the other hand, have too many graduates in jobs that do not appear to require higher education qualifications at all?
There appears to be a complex mix of factors involved: graduates lacking skills, graduates not having the ability, capability or confidence to effectively articulate the skills they do have, and an increasing realisation that geographic factors may have rather more of an effect than has previously been understood.
But the trend will persist in 2019 and it will require a concerted effort by universities, employers, regional actors, and the organisations that support them all, to start to address this issue.
Potential global slowdown concerns employers
Taking a broader view, there are clear economic warning signs around the globe. It is now over a decade since the start of the last recession and there is a growing consensus that the next may be no more than a handful of years away.
Data from Europe and China suggest an economic slowdown may take place in 2019, and graduate employers with a global reach will be monitoring these indicators carefully.
No-deal Brexit a threat to engineering
If the UK exits the EU without a deal, disruption to just-in-time supply chains is very likely to have severe effects in many sectors. Manufacturing is expected to be particularly affected and in that event it is difficult to see how the strong employment performances of the last few years can be sustained.
This might have a particular bearing on the labour market for engineers - one of the strongest graduate labour markets at the moment, and one with a significant graduate shortage. Recent news of manufacturing job losses does give rise to concern in the field.
Overall, the prospects for 2019 are very uncertain but are likely to become clearer in the early part of the year as some resolution comes to the UK's relationship with the EU. At that point, it will be a little easier and more fruitful to predict where we might go from there.
Also in this series
- Four predictions for graduate recruitment in 2019 by Rebecca Fielding, managing director of Gradconsult.
- Graduate employers optimistic for 2019 recruitment by Tristram Hooley, chief research officer at the Institute of Student Employers.
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