Are July’s ONS figures bad news for 2023’s graduates?

We discuss the latest labour market figures released by the Office for National Statistics.

According to the latest report by the Office for National Statistics (ONS), the UK’s unemployment rate soared to 4 per cent during the three-month period ending in May, representing a notable increase from the previous three-month period’s rate of 3.8 per cent. The number of vacancies in April to June 2023 has fallen to 1,034,000, a decrease of 85,000 vacancies from January to March 2023. And in the April to June 2023 period, total vacancies were lower compared to the same period in 2022, down by 265,000.

At a time when they are just starting to come into the labour market, should 2023’s graduates be concerned by these numbers?

Figures vary in terms of quite how many graduates are expected to be looking for roles - estimates suggest around 800,000 undergraduates and postgraduates graduate each year in the UK, and the Higher Education Statistics Agency puts the figure at around 570,000 UK students looking for jobs. (And let’s not forget that there will also be around 100,000 people leaving education at eighteen too.) Despite variation in estimates about exact numbers, the fact is that there’s a lot of talent coming onto the market right now.

Where will all the graduates go?

There continue to be many downbeat messages about the overall state of the economy at the moment, and the headlines around the ONS figures confirming the downwards trend for vacancy numbers won’t help that. Estimates are suggesting that the number of graduates applying per vacancy will increase this year and it’s likely that many graduates will join the jobs market with the perception that it’s a tough time to find a role.

But it’s important to remember that even though the jobs vacancies figures might have fallen, they continue to remain at a very high level nationally. There are still over a million vacancies, with vacancy figures staying above pre-coronavirus (January to March 2020) levels. And there also remains another very significant issue which is a relevant part of the backdrop against which graduates find themselves entering the labour market: skills shortages. 

Skills shortages remain a huge problem for organisations

The recently published Business Barometer report from The Open University and the British Chambers of Commerce indicates that the skills shortage crisis isn’t improving anywhere nearly as quickly as it needs to – in fact, it highlights that 73% of UK organisations are still trying to cope with skills shortages. And 42% of organisations haven’t been able to fill vacant positions as they haven’t found the right applicants.

Employers need to take action urgently, and graduates could certainly provide part of the solution. Not all of the vacancies currently advertised will be roles that graduates will be targeting of course.

But many roles have the potential to appeal to them and while graduates might not have the skills needed to immediately hit the ground running in a role, they certainly do have the capability to be nurtured and trained to quickly develop the right skills to take on many of these positions.  

The knock-on effect of skills shortages can be harmful to organisations in many ways. The Business Barometer report highlights several consequences of skills shortages: rising levels of negative wellbeing for the existing employees trying to take on additional work, a decline in job satisfaction, a decrease in productivity and a negative impact on long-term growth plans. Looked at within the context of all the damage being caused by these skills shortages, a willingness to invest in training and support means there could be a win/win here for employers and graduates.

Attracting the best graduates

With overall job vacancy levels still high, the battle to secure the very best graduates out there will be taking place right now – so our advice is act soon to make sure they are not being snapped up by competitors.  Here are some pointers to help you ensure your vacancies are being seen and are attracting graduates:

• Think carefully about your advert copy so it’s written to appeal to graduates. Share what your culture is like and mention any plans for growth, or innovative or creative projects that are on the go. Promote flexible working clearly, along with training and career development opportunities.
• Make sure your job advert title includes the word “Graduate” - that might sound obvious but you need to make sure it stands out and will be found in search results too.
• Make the most of the opportunities social media offers and create highly visual social media campaigns to grab graduates’ attention.
• Approach universities – many will be happy to promote your vacancies via their career services.