A recession could be coming. What does that mean for graduates?
A series of shocks have hit the UK economy, and economic volatility is rising. The Bank of England is already concerned we may be in a recession or at least looking at one.
Not a normal recession
Traditionally in a recession, we expect a significant fall in recruitment, hitting new entrants to the jobs market the hardest and seeing an exodus of older workers. Recruitment schemes, work experience and training programmes are cut back. Graduate unemployment goes up. Some graduates will be hit worse than others – not always the “usual suspects” in the arts, but those in fields most exposed to significant reductions in spending, such as engineers and graduates in construction.
These are, however, often the first to see an upturn in recruitment once things start improving again. So, if we were in a typical recession, we would see the rest of 2022 getting steadily worse for recruitment as employers cut back. We would expect 2023 to be very tough as job losses begin in earnest, perhaps starting to recover a little later in 2024 as businesses adapt and adjust to returning demand.
Demand for professionals is at an all-time high.
But we are in an atypical employment and skills situation. Older workers have left the labour market in droves due to COVID-19. Demand for professionals is at an all-time high. High demand for workers in health and social work (up 180,000) and professional, scientific and technical activities (up 146,000) have helped to increase workforce jobs to above pre-pandemic levels.
Notably, these industries – alongside education, and information and communication – are at record employment levels, and they predominantly employ graduates.
More vacancies than candidates
We have an outright shortage of workers: the most recent ONS labour market figures showed we have 0.9 unemployed people for every vacancy. Earlier this year, the UK experienced more vacancies than unemployed people for the first time on record. This is now the status quo.
Not only that, but the exodus of older professional workers from the jobs market means businesses are finding a widespread shortage of professionals – usually graduates – in more senior positions in large parts of the economy.
This has knock-on effects down the experience ladder and means the ultimate result is increased demand for graduates, not just in traditional shortage occupations but across the professional services industry that is the backbone of skilled employment in the UK.
What should graduates do?
So, with a recession looking possible, even likely, what should students be doing? The first thing is to look at the history of employment in the UK during downturns and be mindful that even when the economy has been at its absolute worst, most graduates get jobs quickly.
For example, graduates from 2020 left university in the teeth of the COVID pandemic, with the economy shut down and recruitment at 30% of its normal levels – the lowest on record.
Graduates are resilient, adaptable, and in demand.
Fifteen months later, 89% were in work or further study. Just 6% of graduates were unemployed, but a quarter of those had jobs lined up within a month. Graduates are resilient, adaptable, and in demand.
Their institutions have dedicated careers and employability functions that can help them think about their options, articulate their skills and understand what the world outside university looks like and how they can be part of it.
We strongly advise them to use those services while they still can – they are far better equipped than the facilities available for people outside education.
They must be mindful that despite the rhetoric of the ‘dream job’, they shouldn’t feel under pressure to get into that perfect job straight away. They have a long career ahead of them.
They might not even know what they want to do, and that’s ok too. In fact, that’s normal; few people settle into their final career in the first few years out of education. They might want to try a few things out.
Above all, they should remember that the UK labour market wants and needs their qualification, and it’s with them for life.
Above all, they should remember that the UK labour market wants and needs their qualification, and it’s with them for life. It doesn’t guarantee them a good career, but all the data and evidence tell us that they’re likely to get one in time, even if it doesn’t happen straight away.
How Jisc and Prospects can help
Here at Jisc, one of our official roles is to support careers services. Graduates can read the advice and guidance on the Prospects website and use that information to help them in their discussions with the career professionals at their university. They are dedicated to helping graduates make the right decisions for them.
To get a deeper understanding of the job prospects for graduates right now, check out our recent webinar on the graduate labour market that unpacks the latest figures in more depth.
About the author
I am the in-house specialist on the graduate labour market. I research and analyse all things to do with post-18 employment, including regional economies, skills supply and demand and postgraduate issues, usually with a careers and employability perspective.