Student Life

Recession? What recession? The UK labour market in February 2023

The UK labour market is in recession.  It’s difficult to predict exactly what this means (including recent statements in the media which contradict this statement). However, Prospects Luminate’s labour market expert Charlie Ball predicts a reduction in recruiter confidence in the short term. This may mean that training and hiring face a temporary reduction.

However, there remain labour market shortages – especially in IT, professional services, technology, engineering, health, social care and related industries. There are more jobs available than people to fill them. Recruitment in many sectors is unlikely to reduce substantially even as the economy goes into recession. Most graduate recruiters have learned from previous recessions that cutting training schemes only hurts them when recovery comes around.

SME’s may struggle to compete with the salaries offered by large graduate recruiters

Those companies struggling to recruit but which can afford to pay more, are luring employees from those that can’t. Small and Medium Sized Enterprises (SMEs) in particular are most likely to struggle in the competition for talent, where large firms can afford to pay more. There is likely to be an increase in incentives to retain staff, such as more flexible working. In the current economic climate, graduates will be in a better position than non-graduates, with more socially and financially advantaged groups having it easier.

For those working in IT, 79% are working remotely or hybrid. For those employed in professional services it’s 64% and in education, 51%. The future of work very much remains hybrid.

Charlie say some graduates will be hit worse than others – this time that’s not necessarily the ‘usual suspects’ in the arts, but those in fields most exposed to large reductions in spending, often engineers and graduates in construction. These are, however, often the first to see an upturn in recruitment.

The good news

  • Recruiters are increasingly willing to consider graduates without a 2:1. 
  • Equity, Diversity and Inclusion will continue to be a focus in 2023, despite the recession, as businesses have realised not only does it help maintain a balanced talent pool, but also current employees take Diversity seriously. Indeed and Glassdoor report that 72% of workers aged 18 to 34 said they would consider turning down a job offer or leaving a company if they did not think that their manager (or potential manager) supported EDI initiatives.
  • While popular and well-paid roles will be hotly contested and posts quickly fill, as some recruiters are exercising caution, it’s likely some will continue to hire beyond the normal recruitment window as they release jobs gradually where finances permit- so keep an eye out for jobs on MyAdvantage and on company websites.
  • Internships and work experience continue to help set candidates apart when making applications for graduate jobs.

Rebecca Fielding, Founder and MD of Gradconsult anticipates the following recruitment trends for 2023:

  • Graduate recruitment will plateau
  • Sectors likely to grow: Utilities, Energy and Defense. These are tricky areas for universities to navigate given recent student fossil fuel protests. Medicine, Nursing, Midwifery and Teaching also face substantial staff shortages.
  • In decline: Technology, the Charitable sector, Consultancy, Hospitality, Recruitment and Training.
  • After 3 consecutive years of almost 100% online assessment and interviews there may be a return by some recruiters to in-person assessments and final interviews. While virtual assessments have proved a more efficient and cost-effective way to do business and a way to create greater equity for candidates, leaders and managers are pressing for more in-person elements. This is likely to lead to no-shows at interview by students who cannot afford the travel costs in the current economic climate. Organisational and institutional responses will be required to address these potential inequities. Recruiters unwilling to offer virtual opportunities or the cost of travel to interview may find themselves scoring an own goal in the EDI department

In conclusion, the most talked-about topic for many people currently is around Chat GPT. What impact will it have on the recruitment process? How will recruiters respond to application forms completed by a bot? As larger recruiters already deploy plagiarism tools to sift out offenders, applicants need to take care to ensure their applications are authentic. Expect much more around this topic as the both the opportunities and risks of AI evolve.

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