Charlie Ball looks ahead to predict the key trends in the graduate labour market over the next 12 months - with apprenticeships, training, and the hybrid workplace all high on the agenda
Sorry about that, but after a few minutes trying to think of a title that one popped into my brain and stayed there.
One tradition we have here at Luminate is for me, someone famously reluctant to try to predict the future, to start each new year by doing exactly that. By and large, my hit rate is pretty good (let's gloss over 2020), so let's see how we do this time around.
Normally I'd start with a review of 2021's predictions, which I did with Gradconsult's Rebecca Fielding for this webinar early last year. We were pretty good on most things here. I did say I thought youth unemployment would go up, but I didn't reckon on what actually happened - which was it came down, but hours worked also fell as furloughed workers did go back to their jobs though often on reduced hours.
I'm particularly pleased that we spotted the occupational shortages that characterised the labour market in the latter half of 2021 several months before they actually happened, and that part of the market behaved very closely to our predictions.
So, let's look forward instead of back. How do I see the graduate labour market going? Here are five predictions for 2022.
1. The graduate labour market will continue to improve at first, but may level off later in the year
There's still pretty clearly increased demand for talent in large parts of the labour market, particularly in tech, health, education and parts of business services. It's not been clear how new graduates have been though, and anecdotal evidence has been mixed. But the indicators look favourable for now and I'd expect the jobs market for graduates to be relatively kind for the first few months of the year. However, business confidence is starting to slowly drop as some dark economic clouds gather - in particular, inflation (rarely much of an issue in recent years) looks to be back on the agenda. Increased costs means decreased money to spend on hiring, so I'm not sure the current relatively benign employment climate will persist over the whole year.
A climate with talent shortages, recruitment more difficult and more retention problems emerging looks very fertile ground for a real boom in apprenticeships.
2. But employers will still find many kinds of recruitment harder than they're used to
Nevertheless, a slower economy doesn't get over the fundamental issue that there are not enough professionals available to go around in a lot of areas. One interesting development in 2021 was the retention issue as a lot of experienced professionals saw a good market for their skills and it became very tricky for businesses to hire or replace more experienced workers. This often has a knock-on effect on new hires as someone leaving in middle management frequently sparks a series of promotions and a final opening appearing lower down the experience chain, so it does affect new graduates. And that looks likely to continue in 2022.
But we're also short, as mentioned, of qualified workers in whole industries, and these issues are getting worse not better. This also means recruitment is more expensive, riskier and takes longer. I've spoken to a lot of businesses who made offers in 2021 only to find the graduates they'd tried to hire didn't show up on starting day having had offers elsewhere. This is not something a lot of organisations are used to, and while many organisations simply have to recruit and so are plugging away trying to fill their roles, some are making do and not filling roles. They may hire at a later date or…
3. A big year for apprenticeships
Apprenticeships were hit hard by COVID - many businesses found it difficult to offer, and particularly to properly assess, good quality apprenticeships with remote and hybrid working so prevalent. But a climate with talent shortages, recruitment more difficult and more retention problems emerging looks very fertile ground for a real boom in apprenticeships. Businesses now have had a couple of years to adjust to new working arrangements and employee support and a lot have missed their apprentices having not been able to offer them to the same extent during the pandemic. 2022 could - or perhaps should - be a big year for apprenticeships.
4. The training renaissance?
UK plc has not covered itself in glory in terms of investment in training over the last few years, but the same forces that have led to candidate shortage and suitable conditions for apprentices also make businesses look to internal training to meet their skills needs. Online training offers are slick and easy to access and we may see a long-overdue renaissance in workforce skills development. This might be me delivering a wishlist but I'm optimistic!
5. The hybrid future becomes the hybrid now
The data is pretty clear that hybrid working, although a minority sport among UK workers in general, is much more common amongst degree-educated workers and particularly in the big employment sectors of business services, tech and education. 2022 is the year where the hybrid model settles into the status quo for many businesses. And students need to be ready for a working life that, for many of them will now be partly office and partly home-based. That's the reality of professional work in 2022.
But there are still things that need to be worked out. There is no 'standard' hybrid model for a start, and businesses and workers are still slightly further apart in expectations - business prefers a hybrid model with the majority of time in the office, workers prefer the majority at home, for example. This may lead to workplace tensions, particularly in a time when experienced workers are in more demand than businesses are used to. Businesses that get this wrong will suffer. But there are other crucial issues, particularly around management and support. The Health and Safety Executive found that that stress, anxiety and depression were the cause of half of all work-related illness in the last year,1 and it's plain that business has not yet cracked how to properly support a healthy hybrid workforce using models designed for office-based working where good colleagues can spot co-workers who are struggling and help out. There may even be demand for a new kind of professional whose job will be to support hybrid workers in the future.
And we also have the question of the future of hybrid working in general. Is this going to be a coveted form of working that ends up largely accessible only to people who have been to university? That danger does exist - and what happens if that's the way it becomes perceived?
Whatever happens, Prospects Luminate will be with you throughout 2022 to keep you informed about what's happening, to help you with your questions and to support you with your decisions.
Also in this series
- Predictions for the 2022 graduate labour market - Kylie Cook from Gradconsult provides an essential guide to the year ahead for employers looking to recruit talented graduates.
- Tech, climate and neurodiversity on recruiters' 2022 agenda - The ISE's Nicola Thomas expects graduates to be increasingly climate-conscious in their choice of employer and recruiters to focus on neurodiversity in 2022.
Notes
1. Health and safety at work: Summary statistics for Great Britain 2021, Health and Safety Executive, 2021.
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