Thinking ’bout this ‘n’ that – UK graduate labour market news to 19th May

Let’s Pump It Up with a bit of Elvis – Costello, that is. Don’t try dancing like this, you’ll hurt yourself.

What we’re hearing:

  • The fall in vacancies appears to have stabilised
  • SMEs have taken a serious hit and we shouldn’t expect much graduate recruitment from them for the time being.
  • Applications for taught postgraduate courses will probably increase but we hear that some students are not particularly enthusiastic about courses being delivered online.
  • The allied health professionals have an important role to play in rehabilitation of those who have had COVID-19 and recovered. The UK is currently in shortage of these professions. A recruitment campaign had begun before lockdown and we think this area could see renewed focus
  • Some employers may stagger their annual graduate intake and could recruit in the autumn if trading conditions have improved. Some have decided to cease graduate recruitment. A minority have cancelled offers, but others are still working out if and when they will rescind.

The Office of National Statistics released their estimates for the number of jobs and vacancies in the UK in May on the 19th. They estimate 637,000  vacancies in the UK in February to April 2020, down 170,000 on the previous quarter (about the population of Watford) and down 210,000 on the same period last year (a little more than the population of Newcastle). Needless to say, these are big numbers. Accommodation and food service activities saw the greatest fall, healthcare the least.

The Institute of Student Employers conducted another survey of their members, with a summary posted here. ISE members have cut entry level positions by an average of 23%. New graduate roles are down by 12%. Employers anticipate reducing recruitment of apprentices and school leavers by 32% and interns and placement students by 40%. Much of these falls are driven by employers ceasing recruitment activity early, but 14% of employers say they have already reneged on offers and another 14% are considering it later.

IFF Research surveyed businesses about the effects of pandemic on their workforce. 50% of businesses expect trade to return to (or even above) pre-pandemic levels once lockdown is lifted, but a sizeable minority expect a hit to their business even when restrictions are eased. 73% of surveyed businesses had furloughed staff. Most businesses are furloughing under 10 staff, although this is partly a reflection of the number of SMEs surveyed – small and microbusinesses have furloughed, on average, 51% of staff.  86% of businesses in wholesale & retail have furloughed staff, and 85% of businesses in accommodation & food (85%). Manufacturing (82%) and construction (81%) businesses have also been prominent users of the furlough scheme.

McKinsey have examined potential impacts of COVID-19 on the labour market. They estimate that around 7.6 million jobs, or 24 percent of the UK workforce, are at risk  (vulnerable to permanent layoffs, temporary furloughs, and reductions in hours and pay) because of COVID-19-related lockdowns. Risks are significantly greater for non-graduates than graduates and nearly 50 percent of all the jobs at risk are in occupations earning less than £10 per hour.

601 businesses were surveyed for British Chambers of Commerce’s COVID-19 impact tracker to 8th of May . 70% of businesses can make provision for staff wanting to work remotely, and 63% of firms think that they will be able to bring staff of furlough once working restrictions are eased. 36% do not, though and that points to job losses.

On a more local level, Greater Manchester Chambers are monitoring their own position and providing a more detailed picture of local business sentiment. To May 5th, GMCC found that local businesses had largely completed their furloughing plans already and the large majority did not intend to furlough more staff in the short term. Many businesses are now reliant on Government support but many report difficulty in accessing the schemes that are available.

Indeed’s weekly analysis of vacancy data for the UK to May 15th  continue to show a significant drop in vacancies compared to last year. However, the situation may have plateaued. Job postings are down -57% on last year, whilst new job postings are down 71% year on year. A now-familiar set of patterns by sector continues. Food preparation & service, hospitality and tourism and beauty & wellness have experienced  the largest drop in vacancies. Healthcare, and particularly nursing, is faring the best.

The Institute of Employment Studies analysis of Adzuna vacancies to the 10th  of May reported 329,000  vacancies. This is only a slight fall on last week and is another source of data suggesting that the labour market has now stabilised. Last week there were 68,000 new vacancies. They report a 64% drop in the number of vacancies between £15,000 and £24,999 a year and believe that there may now be 6 unemployed people per vacancy, compared with 1.5 pre crisis.

The Institute of Fiscal Studies have also analysed job vacancies, using the DWP’s ‘Find A Job’ site. They judge that although it appears as if vacancy numbers are recovering, it may be largely driven by vacancies in health and social care – and those vacancies are mainly in affluent areas. Health and social care vacancies recovered from half their 2019 levels in the first week of April to 85% of their 2019 levels in the first week of May. In all other occupations, new vacancies in the first week of April were 21% of their 2019 levels, and were only at 26% of their 2019 levels in the first week of May. They also note that the new jobs that are emerging require high levels of training. Even outside healthcare, which requires significant training, labour demand has recovered more in occupations that require higher levels of preparation and this does not bode well for laid-off workers in sectors like food, accommodation and retail.

In summary:

  • The graduate labour market is severely affected but things are far worse for non-graduates
  • However, new entrants to the labour market who are leaving education are being particularly badly hit
  • Job creation activity is down on last year but may have stabilised
  • The most heavily affected sectors are primarily employers of non-graduates, with one exception – the badly-hit arts industry. Other important graduate recruiting industries taking a hit include manufacturing and construction, although not all subsectors have been as badly affected
  • The sectors experiencing less disruption are heavy recruiters of graduates. Health and social care have only seen modest falls in activity and IT and professional services also seem to be faring better
  • Geographic impact is also mixed and evidence is mounting that areas already suffering weak labour markets will be amongst the worst affected

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