Can we see what 2025 has in store for the graduate labour market?

Dec 4, 2024 | Attraction & marketing, Home Featured, News, You might have missed

Prospects’ latest issue of What do graduates do? provides insight to the labour market in 2025, says Charlie Ball at Jisc.

I might not have a crystal ball, but the latest issue of Prospects’ What do graduates do? report helps us take an informed look into what the labour market for graduates might look like in 2025.

This annual publication is supported by ISE and analyses HESA’s Graduate Outcomes survey, charting the career paths of nearly 200,000 UK-domiciled first-degree graduates in 2023 – 15 months after they’d left university.

As well as offering an overall picture of graduate prospects, the impact of the economic climate and where in the UK they go to work, it shows subject-level data on the kinds of roles and industries they work in. It offers valuable insight for future graduates, the careers services that support them and recruiters.

Read why is Graduate Outcomes data so useful.

What were the destinations of graduates in 2023?

These graduates will have had a wide range of experiences throughout their university career but they were largely studying during the COVID pandemic and their opportunities for work experience were limited.

Also, although this cohort graduated in 2021/22, they were surveyed 15 months later, at the end of 2023, when the labour market had taken a modest, but noticeable, downturn.

Despite these adverse external factors, in the end their outcomes are not dissimilar to peers from other years, demonstrating the employability and adaptability of UK graduates.

Around 80% of the cohort were employed, with the majority (57%) employed full time. Some 72% of those working were on permanent contracts and 75% were in professional-level employment.

The labour market now

Since this time in 2023, the graduate labour market has worsened a little, although it remains relatively strong by historic standards.

The economy has not been strong in the years following Covid-19, but the pandemic worsened long-term worker shortages – many of which were in graduate occupations such as health, teaching, social care and tech – and this meant that although the economy slowly got weaker in the last year, the jobs market, particularly for graduates, was a little stronger than the rest of the economy might suggest.

By the end of 2023, though, these factors had become less important. 2024 has seen a continued gradual but steady decline in terms of graduate employment prospects. ISE’s annual Student Recruitment Survey showed growth in vacancies is slowing.

However, this is far from uniform, and most of the employment pain has been in sectors largely employing non-graduates, such as retail and services. This may mean that term-time and weekend jobs might not be as easy to come by though.

Into the future

Businesses are cautiously optimistic for the next few months ahead. The Chartered Institute of Professional Development (CIPD) reported that most employers expected to keep the number of people that they employ steady over 2024, but more expected to increase headcount than decrease.

The public sector is expected to be more likely to expect job losses, although the change in government in July may yet mean expectations might change in 2025.

It’s not likely that it will have a huge effect on opportunities straight away as many of the areas that the new government wants to recruit into still have those worker shortages, and so it will take time to train them before new teachers, nurses and construction workers can be hired.

Indeed, in mid-2024, British Chambers of Commerce were reporting that of the firms who tried to hire, 74% reported recruitment difficulties, compared with 66% in the first three months of the year.

And the Bank of England reported that there were widespread shortages in health, education, social care, engineering, software development and finance.

This means that the labour market for graduates into 2025 is likely to be quite similar to the data we see in Prospects’ What do graduates do? – probably slightly, but only slightly, less favourable.

This means that there will be plenty of jobs available to persistent and well-organised graduates, but that they will not be falling into the laps of applicants and students will need help and support to give themselves the best chances of getting the jobs that they would like.

Careers services will gain more priority and importance to give students the best possible chance in a competitive jobs market.