UK graduate labour market update: 9th March 2021 - Qdos ...

UK graduate labour market
 update: 9th March 2021
Written and published by Prospects Luminate

The latest round of the Office for National Statistics (ONS) fast
response experimental statistics on the impact of COVID were
released on the 4th March:

  •   73% of businesses are currently trading.
  •   19% of the workforce is currently furloughed.
  •   32% of the workforce worked exclusively from home in the last
      week, while 49% of the workforce travelled to work at some
      point.
  •   In the week to 27 February 2021, daily retail footfall continued
      to be substantially lower than its level in the equivalent period
      of 2020. In particular, daily retail footfall was weakest in the
      East Midlands, Wales, Scotland and Northern Ireland when
      compared with the same week of 2020. In contrast, retail
      footfall was stronger in the West Midlands, the South East and
      the South West.
  •   In the week ending 26 February 2021, the proportion of UK
      online job adverts was 86% of the level seen in the same week
      last year.
  •   Online job adverts increased in 25 of the 28 Adzuna categories
      when compared with their level in the same week last year.
      Online job adverts in the 'catering and hospitality' and
      'education' categories saw an increase of five and seven
      percentage points compared with two weeks ago to 28% and
      75% of the level seen in the same week last year, respectively.
      The 'wholesale and retail' and 'healthcare and social care'
      categories remained broadly unchanged from two weeks ago.

•   The most notable rise was for 'transport, logistics and
      warehouse' and 'manufacturing' categories, which increased by
      36 and 21 percentage points to 151% and 149% of their level
      seen in the same week of last year, respectively. The year-on-
      year increase for manufacturing reflects, in part, a subdued
      level of online job adverts at the start of 2020.
  •   The largest fall in the last two weeks came from 'legal', which
      decreased by 18 percentage points to 63% of the level seen in
      the same week last year.
  •   In the last two weeks, the volume of online job adverts as a
      proportion of its level in the same week of last year increased
      across all UK countries and regions.
  •   Northern Ireland, the North East and East Midlands have a
      higher proportion of online job adverts than that seen in the
      same week last year.
  •   Online job adverts in London remain the lowest, at 73% of the
      level seen in the same week last year.

   Job adverts offering flexible working attracted up to 30% more
                              applicants.

The ONS have also produced a very interesting paper on graduates in
the labour market during COVID:

  •   The unemployment rate for graduates, non-seasonally adjusted
      was 4.6% in Quarter 3 2020 (i.e. in the months after the 2020
      cohort graduated), compared with 5.1% for the overall
      unemployment rate.
  •   Graduate skill mismatch, defined as the proportion of
      graduates not employed in graduate occupations, decreased by
      five percentage points to 25.5% between Quarter 3 2019 and
      Quarter 3 2020. Although this measure will soon be superseded
      with a new Standard Occupational Classification (SOC) using a
      more accurate measure of 'graduate occupations', this is still an
      interesting finding.

•   A smaller proportion of graduates (6.7%) switched occupation
    in Quarter 3 2020 compared with that of non-graduates
    (7.0%).
•   42% of the workforce have a degree, but only 24% of the
    unemployed do.
•   Average unemployment for recent graduates came to 6.3%
    over the period Q3 2019 to Q3 2020 and reaching a peak of
    12.0% in Quarter 3 2020. This remains below the youth
    unemployment rate.
•   The proportion of graduates working in professional-level roles
    during the pandemic rose to 73.1% by Q3 2020. The proportion
    in 'administrative and secretarial occupations' saw the largest
    fall.
•   The proportion of graduates who switched occupation was
    consistently higher than for non-graduates - with the exception
    of Q2 to Q3 2020 when occupational switching suddenly
    dropped significantly. Graduates who changed occupations
    have moved out of the highest-skilled jobs and into
    intermediate and low-skilled ones, and a reduced level of
    occupational switching suggests that those who hold a degree
    were better able to remain in their jobs over the period.
•   In all years, the largest proportions of graduates without a
    graduate job are observed in the government services, hotels
    and recreation, and in financial services. In the case of
    government services and financial services, graduate workers
    may choose to enter the sector at positions which do not
    require a degree, in order to build up experience.
•   Skill mismatch in most sectors has marginally decreased during
    the coronavirus crisis, with the exception of government
    services, where the mismatch increased by 4.5 percentage
    points, if compared with the average period between 2017 and
    2020. By Q3 2020, 35.3% of graduates working for Government
    services were considered overqualified.
•   Graduate workers were better able to change occupations in
    the periods prior to and in the first few months of the crisis,

compared with workers in the total labour force in the UK.
      These occupational shifts may have been helped by their wider
      skillset. Given the higher level of human capital, graduates may
      be in a stronger position to adjust to challenges imposed by the
      pandemic in terms of retaining jobs and finding new
      employment opportunities.

The Behavioural Insights Team, working with Indeed, have conducted
a mammoth randomised controlled trial on flexible working in job
ads. This is an interesting piece of work both for workplace insight
and for aficionados of clever methodologies (not least because of the
candid discussion of how the methodology didn't quite end up
randomising).

  •   The team included a new screen, which prompted employers to
      choose flexibility options for their vacancy.
  •   20 million job applications passed through the trial.
  •   This led to a 20% increase in the number of jobs advertised as
      flexible.
  •   Job adverts offering flexible working attracted up to 30% more
      applicants.
  •   Women and men were both more likely to shortlist job adverts
      mentioning flexibility.
  •   The BIT estimate that all things being equal, this nudge would
      add at least 174,000 flexible jobs to the UK economy in a year.

The latest KPMG and Recruitment & Employment Confederation
(REC) Report on Jobs is out. Data was collected 11 to 22 February:

  •   After falling solidly at the start of 2021, overall vacancies were
      broadly unchanged in February. Underlying data showed that
      permanent vacancies were close to stabilisation, while demand
      for temporary workers increased solidly.
  •   February data showed a modest rise in supply of workers.
      Permanent worker availability was little-changed on the month,

and temp candidate numbers increased at a softer, but still
      marked, pace.
  •   Recruiters mentioned that the latest lockdown and concerns
      over job security had dampened candidate availability.
  •   Permanent placements declined across all English regions bar
      the North of England. The South of England registered the
      sharpest rate of reduction overall, closely followed by London.
  •   On a regional basis, the steepest increase in temp billings was
      seen in the Midlands. London meanwhile recorded a further
      decline, and one that was the quickest since mid-2020.
  •   Permanent vacancy trends diverged in February. In the public
      sector, demand for permanent staff fell sharply, while
      vacancies rose modestly across the private sector. Open roles
      for short-term workers meanwhile rose strongly across both
      the private and public sector midway through the first quarter.
  •   Demand for permanent staff rose across four of the ten
      monitored job categories in February. Nursing/medical/care
      saw by far the steepest increase, followed by IT and computing.
      Hotel and catering saw the sharpest drop in permanent
      vacancies.
  •   Nursing/medical/care also topped the rankings in terms of
      temp vacancy growth in February, while Blue Collar placed
      second. Demand for temporary workers meanwhile fell
      markedly across the hotel and catering, and retail sectors.

The Bank of England expects that by the end of the first quarter, UK
  GDP will still be around 12% below its level at the end of 2019.

The Governor of the Bank of England, Andrew Bailey, gave a speech
at the Resolution Foundationon 8 March:

  •   COVID has been both a demand and supply shock to the
      economy, and the recovery therefore has to be in both
      elements - this is unusual in economic recoveries and presents
      unusual difficulties.

•   There are reasons to believe that so-called longer-term scarring
    damage to the economy will be more limited than in some past
    recessions, but there will most likely be structural change that
    will influence the future of supply and demand. This is partly
    because task and job reallocation has increased since previous
    shocks so workers will need less significant retraining to move
    between sectors.
•   The Bank expects that by the end of the first quarter, UK gross
    domestic product (GDP) will still be around 12% below its level
    at the end of 2019. Needless to say, this is a huge shortfall.
•   The impact has been synchronised across economies - the
    similarities of this shock far exceed the differences in terms of
    economic impact.
•   This follows the monthly Decision Makers Panel report from
    the Bank. This is a survey of 3,023 chief financial officers and
    their equivalents:
•   In February, businesses estimated that their sales in 2021 Q1
    would be 22% lower than they otherwise would have been
    because of COVID-19, with employment 10% lower and
    investment 22% lower.
•   The impact of COVID-19 on sales was expected to ease during
    2021, from -22% in 2021 Q1 to -11% in 2021 Q2 and -6% in
    2021 Q3, and be around zero from 2022 onwards.
•   The estimated impact of COVID-19 on employment in 2021 Q1
    was revised down to -10% in the latest survey. That impact is
    expected to start to diminish in Q2 and Q3, to -8% and -6%
    respectively, as some recovery in employment is expected.
    However, these near-term employment expectations were
    around two percentage points lower than in the January
    survey.
•   The proportion of full-time employees working from home for
    at least one day a week was estimated to be 49% in 2021 Q1.
    That was an increase from 14% of employees working at least
    one day a week from home in 2019. In 2022 and beyond, 34%
    of workers were expected to work at home for at least one day

a week with two or three days a week expected to be the most
      common working pattern.
  •   The percentage of employees on full-time furlough (still
      employed but not required to work any hours) remained steady
      at 15% in February.
  •   The percentage of businesses that viewed overall economic
      uncertainty as high or very high fell from 67% to 57% in
      February, but it remained higher than the 41% at the start of
      2020. COVID-19 remained the largest source of uncertainty for
      47% of businesses, and in the top three sources for around
      82%, similar to previous months.
  •   Brexit-related uncertainty remained unchanged in February,
      with 43% of businesses reporting that Brexit was in their top
      three sources of uncertainty.

The BDO Services Optimism Index increased sharply in February:

  •   The BDO Services Optimism Index moved from 86.60 in January
      to 94.13 in February - a 12-month high. The growth of the
      Index, which encompasses a range of industries from retail and
      hospitality to professional services, suggests that many
      businesses had anticipated a significant return to normality
      even before the government set out its lockdown roadmap at
      the end of February.
  •   BDO's Manufacturing Optimism Index edged marginally
      downwards by 0.27 points in February, taking the Index to
      83.99. Any optimism felt by manufacturers due to the
      continued success of the vaccine rollout has been offset by
      Brexit border tensions which continue to impact the sector.
  •   The BDO Employment Index rose slightly from 107.64 in
      January to 107.68 in February, as the UK labour market shows
      some early signs of stabilising.. With the furlough scheme now
      extended until the end of September, concerns of an
      immediate spike in unemployment have been staved off,
      paving the way for continued stability in the months ahead.

And Indeed have analysed job postings to 26 February:

  •   Job postings on Indeed were 36.2% below the 1 February 2020,
      pre-pandemic baseline, seasonally adjusted, as of 26 February
      2021.
  •   Job postings remain 75% to 80% down on pre-pandemic levels
      in sectors most affected by social distancing, namely beauty &
      wellness, food preparation & service and hospitality & tourism.
      Job postings in sports are down 54%.
  •   The only role where job postings are above pre-pandemic levels
      is medical technician (up 4.1%). Construction is now only 1.7%
      below the baseline, while community and social service,
      veterinary and production and manufacturing are also not far
      below baseline.
  •   The West Midlands and North West are closest to the pre-
      pandemic baseline.

Written by

Charlie Ball
Head of higher education intelligence
Prospects
https://luminate.prospects.ac.uk/uk-graduate-labour-market-
update-9-march