Slump in Demand for Graduate Jobs in the UK Continues

In its June 2023 Labour Market Overview, the Office of National Statistics (ONS) revealed the following unemployment, job vacancy, and salary trends:

• A 0.1% decrease in the unemployment rate from February to April to 3.8%

• A 79,000 fall in estimated vacancies between March and May 2023 to 1.05 million

• Growth in regular pay (excluding bonuses) of 7.2%, which is a substantial increase on the 6.7% in the previous update.

As usual, in this month’s UK Labour Market Review we use our data to offer real-time insights into some of these trends, and also take a look at employer demand trends for industries.

New job postings down 6% compared to this time last year

After a dip in the number of new job postings in April, May saw the situation stabilise, with the rolling 3-month average of new postings again at 1.07 million. While this shows stability in recent months, the number of newly posted vacancies is actually 6% down on this time last year.

Behind the headlines, different types of jobs continue to follow different trajectories. While non-graduate job postings grew, albeit at a slow pace, graduate job postings continued to decline for the third consecutive period.

Advertised salaries being offered have stagnated

Whilst the ONS figures show growth in regular pay from 6.7% (January - March) to 7.2% (February - April), when we look at the more real-time insights offered by our job posting data, we actually see the median advertised salary for new job postings in May 2023 remaining unchanged compared to last month, at just shy of £32,500.

However, the drop in median advertised salaries for graduate job postings, which we reported on in our last UK Labour Market Review, has continued for the third consecutive month. Graduate median advertised salaries are now at £38,850 - 1.30% below the median advertised salary level for these roles last year.

In addition, for the first time in over a year, median advertised salaries for non-graduate roles have decreased compared to last month.

A Yorkshire job postings boom

When we look at the top 20 hotspots for job posting growth, we can see a clear winner: Yorkshire, with eight of its towns or cities being in the top 10 for month-on-month job postings this month. These are Doncaster (91.9% growth); Wakefield (75.1%); Bradford (67.7%); Kirklees (62.5%); York (53.4%); Kingston-upon-Hull (41.2%); and Sheffield (39.3).

The same is true of job postings for graduate positions. Again, the top 20 is “Yorkshire-heavy”, with Doncaster (123.1% growth); Wakefield (102.9%); and Bradford (92.7%) leading the pack.

Much of the rest of the top 20 in both charts is made up of a number of coastal cities and towns in the South of England, including Portsmouth, Plymouth and Bournemouth.

Sectors dominated by graduate roles are seeing the largest fall in job postings

According to the ONS, the biggest fall in the number of estimated vacancies over the last quarter (March - May 2023) compared to the previous quarter (December 2022 - February 2023), was in the Financial and insurance activities sector (18.7% decline), followed by Transport and storage (-18.3%), and Motor trades (-14.7%).

Using our job postings data, we can pan out from the quarterly view to get a sense of how demand is tracking on a yearly basis. The chart below looks at job posting growth for industries in the quarter March-May 2023 compared with the same quarter in 2022 (note: we’ve only included sectors that account for more than 1% of job postings).

Construction leads the way, with almost 20% growth in postings year-on-year, followed by Wholesale and retail trade (12.9%), and Education (10%). At the other end of the chart, the sectors with the biggest decline in employer demand over the year are Information and communication (26.6% decline); Financial and insurance activities (-11.4%); and Professional, scientific and technical activities (-1.7%). What makes this particularly interesting is that it highlights what we mentioned above, that the “worst” of the labour market at the moment is to be seen in white-collar, graduate jobs.

Elena Magrini, Lightcast's Head of Global Research commented:

We’ll be back with another UK Labour Market Review in July, just after the next ONS Labour Market release.