How graduates got on in the Covid-19 job market

The pandemic has not changed this starting position fundamentally, but new analysis from the Office for National Statistics offers some insight into how the lockdown experiences of graduates differ from others in the workforce. Graduates have been more likely to have been forced by circumstance to take “a job” rather than “a skilled job”, and unemployment in very recent graduates was double what might otherwise be expected in Q3 2020.

We’re working here with the Quarterly Labour Force Survey and the Longitudinal Labour Force Survey, using data from the first three quarters of 2020 alongside comparators from previous years.

Overall unemployment

And on the face of it, recent graduates are having a tough time of it.

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While by Q3 2020 (July to September) the unemployment rate had risen to 5.1 per cent, and 4.6 per cent among the graduate population, unemployment among recent graduates sat at an astonishing 12 per cent. It should be noted that there is a seasonal peak in Q3 ever year – the quarter immediately after graduation in most cases – but this grew in 2019 (up to 8.3 per cent).

The pandemic affected business in profound ways we are still endeavouring to understand – but the uncertainty at least does appear to have slowed hiring behavior this year. This particularly affects younger people and those without current work – both groups are overrepresented in recent graduates.

Highly skilled roles

However, for those graduates in employment, employment in the three “highly skilled” roles (managing directors and senior officials, professional occupations, and associate professional and technical occupations) has risen as a proportion of all graduate employment. We can assume here that this shows employees outside of these roles being more likely to be laid off during the pandemic, in common with non-graduates who are more likely to be in such roles.

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So, even though being a recent graduate isn’t great right now, we can see that graduates tend to be employed in highly skilled roles (yes, that’s 73 per cent!) and that these roles are more resilient to economic downturns than others. Do remember that these skills buckets are pretty arbitrary, and a fair few graduate jobs turn up outside these categories.

ONS gets into this issue more deeply, by examining the way graduates move between roles. And it turns out that graduates are more likely to change jobs in regular times, though this slowed down in Q2 and Q3 of 2020. Job changes includes stuff like promotions within employment as well as finding new jobs – graduates generally are more likely to move up the skills ladder, with the ONS suggesting a wealth of general and transferable skills supports cross-occupation moves as well as those within a single occupation.

Moving jobs

But Q2 and Q3 broke this pattern. What this suggests is that graduates may have to take lower skilled jobs during an economic downturn – but again we should note that the ability of graduates to successfully take any jobs at all in such a contraction is not to be sniffed at. Clearly having graduates work in low skilled roles is not our best use of the graduate workforce, but against that we can hardly blame people for taking what jobs are available.

Here’s how graduates flowed in (and out) of different skill level categories in between Q2 and Q3 of 2019 (blue) and 2020 (orange):

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There’s a lot to take in here – but the takeaway should be that in a regular year (like 2019) graduates move up the skill ladder, but 2020 saw slightly more graduates move to lower middle skilled jobs (likely to be admin or caring based) even though there were less graduates in such roles overall.

For this reason, ONS reports that the proportion of graduates who are “overeducated” for their role has actually fallen during lockdown – from a third of graduates in Q3 2018 we’re at nearly a quarter for the same period in 2020. As we’ve been over on Wonkhe before, skilled job identification is a far from exact science and many “graduate jobs” are not “high skilled jobs”.