The last couple of years have been politically and economically tumultuous. Debates raged over Brexit, prime ministers fell and rose, elections took place, the pandemic emerged and the economy was locked down. All of these factors had an impact on the graduate labour market.

Although people often discuss the ‘changing world of work’, things actually tend to change slowly. In 1980 about 70% of the UK population were in employment, 40 years later it is about 76%.

Of course this figure has gone up and down over the years, but the overall pattern is one of stability. Most people in Britain are working for a living and this is even more true of graduates, who are typically about 15 percentage points more likely to be in employment than the rest of the population.

Given this, it is important not to go into panic mode. The economic situation is currently deteriorating, graduate jobs are getting more competitive, but this doesn’t mean that there are no jobs available for graduates.

Graduating in 2018

If you were graduating in 2018 you joined a labour market in which there was pretty much full employment. In the ISE’s survey of large graduate employers we found a 7% increase in the number of graduate hires on the previous year. Salaries were rising, and although things weren’t necessarily back to their recession high point, things were getting better for graduates.

Of course there was the uncertainty of Brexit still hovering on the horizon, Theresa May was still prime minister and the government was wobbling fairly regularly. Despite this, and despite some concern from employers, for the most part they continued to recruit. This was also true in 2019 when ISE employers reported a 10% increase in graduate recruitment.

For the graduating class of 2018 times were pretty good and the first year or so of their careers were conducted in relative boom time.

Christmas 2019

By Christmas 2019 Boris Johnson was back in Downing Street with a huge mandate to ‘get Brexit done’. About 78% of students responding to the Graduate Outcomes survey analysed in Prospects at Jisc’s What do graduates do? report were in some form of employment and less than 4% unemployed with no immediate prospects of a job.

The UK was still enjoying historically high levels of employment, but there was clearly some uncertainty on the horizon. We asked ISE employers how they felt about the economic climate at the time and most reported that they were adopting a ‘wait and see’ stance. As we entered 2020 we were predicting that graduate recruitment would stagnate, but probably not decline over the next year.

The rest is history. Covid-19 has hit the economy hard and we’ve seen a 12% drop in graduate recruitment this year. The impacts of the Covid recession are very sectoral with areas like retail (where about 10% of 2018 graduates were working at Christmas 2019) and the built environment (about 8% of graduates) being more seriously hit. Those students graduating in 2020 are entering the labour market in much worse circumstances than the 2018 cohort. Predictions are still difficult but we are currently anticipating another, hopefully smaller, drop in the number of graduate jobs next year.

Responding to change

Graduates and current students will already be aware that times are tough. But it is important for them to put the decline in graduate jobs in context. The cohort who graduated in 2018 entered an unusually buoyant labour market. Although it is likely to be more difficult to get a job for the next few years, the overwhelming majority of graduates will still find work and many of them will still find good work.

Careers professionals need to try and help students to arrive at a balanced take on the current state of the labour market. There are good reasons to be concerned, but there are also reasons to be optimistic and resilient. This is why it is so critical for universities and the government to make sure that they support graduates to stay engaged and make as rapid a transition into their careers as possible.

Read more about the graduate labour market in Prospects at Jisc’s What do graduates do?