Is there still a graduate labour market?

Jul 27, 2020 | Sector & policy

As things start to get back to what many are calling ‘the new normal’, Charlie Ball, Head of HE Intelligence for Prospects at Jisc considers if there is still a graduate labour market out there and what it means for employers?

There is still a lot we don’t know about Covid-19, but on the quiet a lot of good work has been done by many able and committed organisations to examine the effects of the pandemic on the economy and particularly on the jobs market. As a result we’re starting to form a reasonably informed picture of the way the labour market has fared and may go in the future, and what that means for graduate recruitment.

What we know now

Available data suggests that the jobs market hit bottom around the end of March. It has slowly improved, but plateaued since mid-June. The level we’ve reached appears to be somewhere around 50% down on the position pre-pandemic, according to the highly respected research group at the Institute of Employment Studies. So, we’re a long way from getting the jobs market back to where it was pre-lockdown.

However, it has to be acknowledged that the pain is not shared equally across sectors. The graduate labour market has suffered significant damage, particularly in the arts – but things are far worse for non-graduates. Hospitality, retail, sports, entertainment, accommodation, tourism – all absolutely crucial sectors for workers without higher education qualifications – have been hit particularly badly.

Things have also been very difficult for the self-employed, partly because a lot work in sectors, such as the arts, that have been badly affected and partly due to sheer lack of cash reserves.

Many key graduate employment sectors – health, social care, IT, business services – have been much less affected in terms of lost output and reduced jobs vacancies than other areas of the economy. And it has been the lowest paid jobs that have been the worst affected.

What may come

There could be more to come. At the start of July, 8.7m workers in the UK were furloughed, but the fear is that many of those jobs could be lost as the scheme winds down. The government has taken action to mitigate the impact, but many still fear that the UK could see record levels of unemployment in the autumn. Some of the recent announcements of jobs losses, particularly in retail, could be linked to this as consultations will be underway in firms that will need to lay off staff at the end of the scheme and there could well be more to come.

On top of that is the announcement that UK GDP rose 1.8% in May. Ordinarily this would be a tremendous increase during a calendar month and a reminder that 2020 is going to break every economic trend you have ever seen, but it was well below expectations. Although there is still optimism out there, a ‘V’ shaped economic recovery now looks rather less likely than something showing an early initial surge to a lower level than before followed by slower and shallower recovery that may take some time.

Optimistic outlook

But there is also cause for optimism. SMEs have had a hard time of it during this period with business drying up and cash shortages, but many also feel that they can get back to operation relatively quickly once it is safe to do so and that could mean that recruitment may come back onto the table in the autumn.

And the other big element is that for many professional employers, the pandemic has demonstrated that widespread remote working is actually effective and viable, and it looks increasingly like a long-term legacy of the pandemic will be a move away from the traditional office to more smart and home-based working.

The majority (80%) of workers in professional services and IT have worked from home and that has allowed these industries to escape the worst of the pandemic’s effects. The opportunity to reduce overheads in maintaining large offices in expensive city centre locations is likely to be seized upon by many employers.

Going hand-in-hand with this is the discovery that virtual recruitment and assessment can be very effective and may even reduce geographic barriers to applicants. It now may be less important for your employees to travel to work in London every day, for example, and that will significantly widen your pool of prospective applicants. There are downsides as well – as geographic barriers to recruitment fall away technological barriers may replace them – the need to own a computer of your own and have reliable Internet access simply to be able to make an interview will rule out some able potential candidates if measures are not taken.

In general, there are still jobs for graduates – just rather fewer of them – and over the medium to long term some of the most profound changes will be to how graduates are recruited and work as well as to the jobs that they are doing. At the other side of this pandemic there is a new business landscape that will need new tools, skills and perspectives to thrive, and as always, able, adaptable, resourceful young talent will be in demand.

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