What Does the Graduate Labour Market look like right now?
Updated: Oct 16, 2020
After six months of adjusting to the new normal of remote working and virtual meetings, it’s clear that the graduate labour market could be facing one its largest setbacks yet. The global economy has been forecasted to enter into one of the deepest recessions since World War II, according to The World Bank.
This means that this year, young graduates will be entering into one of the toughest labour markets in decades. Although the economy is gradually recovering in some sectors, such as retail and hospitality, we are still a long way away from the much brighter job market graduates would have entered into earlier this year.
Those aged 18 to 24 years, faced the biggest decline yet in employment and the largest increase in unemployment, according to the latest ONS report on the UK labour market from May to July. They are experiencing the second-largest increase in economic inactivity, after workers aged 65 and over.
The report cites that from February to April, youth employment has dropped from 3,463 to -152,299 since the May to July period. This decline has been linked to younger workers “tendency to work in industries that were worst affected by the pandemic”. This consists of accommodation and food service activities and arts, entertainment and recreation, the report further explains.
The unemployment rates for young people from ethnic minority backgrounds have also been significantly affected. Unemployment rates were highest for 16-24-year olds from a Bangladeshi or Pakistani ethnic background (26%) and a Black ethnic background (27%). The rate being 10% for those from a White ethnic background. This is according to data conducted by the government between April 2019 to March 2020,
Graduate part-time work and internships
Research conducted by Milkround, and Dig-In, shows that a mere 18% of graduates are securing jobs this year, compared to the average 60% seen in previous years. A further 3 in 5 students are also worried that their current job position will be impacted, according to the survey published this April. These statistics likely still hold bearing today with certain lockdown measures resuming around the UK.
The Institute for Fiscal Studies has also warned that, based on data collected from the last three recessions, graduates will likely find it harder to find work and will start off in lower-paying occupations as a result. Graduates will also likely face increased competition and fewer opportunities.
Graduate internships also remain at significant risk with 63% citing that current circumstances have “impacted their internship”, with less than 1 in 4 being terminated. These survey results were conducted from 2,500 UK university students and over 100 graduates between 28th March and 3rd April.
In addition to this, according to a July survey by The Sutton Trust, 61% of firms who previously offered internships or work experience placements have cancelled them, with just over three-fifths cancelling some or all of their placements. 49% of SME’s were also more likely to have cancelled internships and work experience placements, compared to just 29% of large employers.
With a lack of internships on offer, paid internships are also becoming harder to come by. This adds another burden onto students, particularly those from low socioeconomic backgrounds who cannot afford to work for free on unpaid work experience opportunities.
The act of applying for internships and part-time work is also a very stressful experience for students, who are up against a significantly higher number of applicants. In July, there were reports of the top fifteen most popular job roles receiving thousands of applicants, according to CV-library, an online recruitment website.
Part-time jobs have also been severely affected, with lockdown hitting young workers the hardest. The collapse of retail, catering and hospitality employment has had a huge impact on many students returning this September. Sectors shut down as a result of social distancing measures employed nearly 30% of employees under 25, according to The Sutton Trust.
Term-time employment is a crucial part of university for students as a way of supporting themselves financially whilst living away from home. The impact of Covid-19 on these industries has an even larger impact on those from less advantaged backgrounds who are unable to rely on additional financial support from relatives.
The impact on the graduate labour market
In terms of overall employment trends, 1% of employers have frozen recruitment or are planning to, 19% have increased recruitment or were planning to, 45% had frozen or delayed wage increases or were planning to and 16% had cut pay for some or all of their staff, with 7% planning to. This is according to a survey conducted by CIPD of 1,000 employers on their reaction to the pandemic to the end of June, reports Prospects Illuminate.
The Open University’s 2020 Business Barometer report for Q3 also shows that 56% of UK organisations are continuing to experience skills shortages. When employers were asked what skills applicants lacked when they struggled to recruit, 34% cited lack of leadership skills, 34% for managerial skills, 26% for IT skills, 24% for technical/operational skills, 20% for industry-specific skills and 19% for soft skills.
61% of organisations also say that they are not as agile as they need to be because of shortfalls in these skills. The report also shows that 48% of employers felt that apprenticeships and work-based learning initiatives will be vital to their organisation's recovery over the next year.
How we can help
Here at TG Consulting, we understand the graduate market in its fullest. We know what students want and what they need from employers and higher education institutions in order to succeed and how to truly engage them.
We are experts in our field and understand all aspects of the higher education environment, including employability, progression, student engagement and experience.
Whether you are looking for individual programme analysis, graduate and student training and coaching, help with embedding employability frameworks and models, or an employability and careers service health check-up, we are here to help.
We also provide useful insights into the higher education space including the student journey and recent trends. This includes recruitment campaign consultation, talent attraction strategies, higher education insights and student voice campaigns
Want to find out more about our services? Check out our full list of services here.
By Katie Watson, TG Consulting Intern