Graduate job market update: July 2024

Following on from the general election, we take a look at the state of the graduate job market and what we might expect to see over the next few months

Since last year, the graduate labour market has worsened a little, although it remains relatively strong by historic standards. The economy has not been strong in the years following COVID-19, but long-term worker shortages that were made worse by the pandemic meant the jobs market was largely faring better in most graduate employment sectors than might be expected.

Most of this had unwound by the end of 2023, and 2024 has seen a gradual slow but steady decline in terms of graduate employment prospects. However, this is far from uniform, and most of the employment pain has been in sectors largely employing non-graduates, such as retail and services. It may mean that term time and weekend jobs might not be as easy to come by though.

Skill shortage areas for graduate jobs

The Bank of England expect headcount to increase slightly in the UK over the next six months, with growth largely in graduate sectors, particularly pharmaceuticals, aerospace and especially the crucial business services sector - the largest private sector industry for UK graduates. We still have widespread shortages in health, education, social care, engineering, software development and finance, and although they have (largely) eased in the last two years (except in health and education), they're still a real issue for employers. The bank reports that many employers have had to resort to costly offshoring to fill gaps in talent available in the UK.

July has seen a further drop in vacancies, to around 889,000 in the UK at the end of June. But what is not often well understood is that although just over half of all UK jobs are now at the professional level that indicates a required level of skill or education equivalent to a degree, the proportion of vacancies at that level is higher - at the end of 2023, over half (57%) of vacancies were at graduate level. This seems reasonably stable since the end of the pandemic (which caused an increase in the proportion of vacancies that were degree level due to weaknesses in the rest of the economy). It would mean there are approximately half a million graduate-level vacancies in the UK economy.

These vacancies are not evenly spread - they're mainly in cities, for example - and nor are they all, or even mostly, for new graduates. But it does show substantial and sustained demand for degree level skills that is unlikely to fall in the near future. Over the next few months we can expect that level of vacancy to drop a little but there would still be around half a million graduate-level roles available in the UK.

A long term growth strategy

The new government's agenda does not necessarily suggest an immediate increase in graduate opportunities in the short term. There will need to be recruitment to meet health, teaching and building policies, but these sectors are already struggling with a lack of workers and will need a longer term plan for training and development to meet labour demand.

Indeed, some of the more ambitious building targets the government have might be hard to meet without more workers. This would involve skilled trades but also engineers, planners and surveyors - already some of the hardest jobs in the UK for employers to fill.

A new industrial strategy and more devolved powers might help to revive job opportunities outside London, although cities like Manchester, Leeds, Birmingham, Glasgow, Edinburgh, Cardiff and Belfast provide good opportunities already.

There are also signs that the self-employment jobs market, hit especially badly by COVID, might be recovering. However, this summer won't see quite as much chatter about artificial intelligence (AI). The business world has largely concluded that it has its uses - and being proficient with large language models certainly won't hurt your prospects - but it's not going to be displacing huge numbers of skilled jobs right now, as many feared last year.

But by and large, if you're graduating this summer, the jobs market will not necessarily be bad as such, but it will be a bit tougher than the last couple of years and finding a job will take some effort. Fortunately, your careers services have seen this sort of thing before and know what to do to best support you, and Prospects have tons of useful insight and advice, so do make use of it.

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