(Bloomberg) -- Harry Torrance, a history student at Warwick University, has just finished his final exams. He’s blunt about his education and immediate prospects. “I will graduate with an ever-narrowing job market and a university experience disrupted from every angle,” the 21-year-old from London said.
Torrance’s concern about his future reflects the state of the British economy and how the cohort of students who pursued their higher education through the coronavirus pandemic are facing an unprecedented challenge.
Young people preparing to leave university are about to endure the toughest labor market in years, with fewer open positions and wages that aren’t keeping up with the cost of living. Yet what sets them apart from previous graduate groups is the disarray caused by Covid-19, strikes at their places of learning and the UK’s exit from the European Union’s borderless jobs pool.
Data from Reed Recruitment, one of the UK’s largest employment platforms, shows the number of positions available and marked suitable for graduates is about 40% below 2018 levels, Bloomberg reported this week. Listings have declined steadily for almost two years.
Read More: England’s Graduates Suffer the Worst Jobs Market in Years
Then there’s the question of how equipped graduates are for a workplace after much of their studies were moved online, networking opportunities curtailed and then walkouts by university staff to protest pay deals and changes to their pensions. Even now, some lecturers are engaged in a standoff over assessments of students.
The UK was the final Group of Seven country to recover output lost during the pandemic, however growth remains sluggish and gross domestic product has dipped back below that level. One factor is weak productivity growth.
The next generation of workers, meanwhile, is exhibiting twice the rate of illness than a decade ago, at a time where Britain’s work force is in need of more skills and greater productivity.
“Graduates lacking the relevant skills to fill roles that have traditionally been suitable for individuals fresh out of university is clearly a worrying trend,” said Dan Hanson, senior UK economist at Bloomberg Economics. “It represents yet another scar on the economy following the pandemic and reason to think the economy’s ‘speed-limit’ — its ability to grow without stoking inflation — is likely to be very low.”
Graduate recruitment plummeted as lockdowns halted in-person training schemes. The UK government’s introduction of a Kickstart Scheme in 2020 helped create new jobs for 16-24 year olds on state financial aid who were at risk of long term unemployment. Funding for the scheme closed at the end of 2021, coinciding with the downturn of graduate opportunities.
People leaving university feel their biggest barrier to pursuing a career path is a lack of relevant experience, according to research from Bright Network, a graduate recruitment platform.
Bright’s surveys during the pandemic years found that 38% of students had an application or role canceled in 2020, with a further 32% experiencing the same in 2021. Now, the cost-of-living crisis is pushing more young people to pursue work after university.
Yet the Recruitment and Employment Confederation, which represents recruitment agencies nationwide, said the sentiment among businesses is that recent graduate hires have been lacking skills and understanding of the work place when compared with those whose education and career journey wasn’t disrupted.
“It’s harder to choose to hire a new graduate, as none of them have had workplace experience or built a network,” said Sam Clarke, property exposure manager at Beazley Plc, which has specialist insurance businesses. “A lot of applicants this time around graduated in earlier years and worked in other sectors in the meantime. So they come in with much better experience for the same level job.”
Some employers are adjusting. KPMG’s UK chief people officer, Lisa Fernihough, said the accounting firm is tailoring recruitment after seeing some hires lacking in confidence and exhibiting more anxiety around physically coming together in the workplace. Banks such as Goldman Sachs Group Inc. and HSBC Holdings Plc are engaging with applicants earlier in the assessment and integration process.
Even where jobs are plentiful, the absence of workplace experience because of disruption to education is another issue for employers, said Kate Shoesmith, deputy chief executive officer at the Recruitment and Employment Confederation. She cited students training to be teachers.
“There’s been a high, high demand for teachers and support staff in schools,” said Shoesmith. “But, newly qualified teachers didn’t get the opportunity to go in schools during their studies. Their first experience of teaching in a class room was their first day on the job.”
And disruption to higher education extends even beyond the final examinations for some students. A dispute over pay and conditions has led to marking boycotts and potential delays to graduations.
Like all school leavers during Covid, Warwick student Torrance also had his final year marks awarded by teachers after in-class exams were canceled during the pandemic.
He’s hopeful, though, that he will graduate on time and is considering his options, including going on to study for a master’s degree. The issue is that he may have to do it with a predicted, rather than final grade, said Torrance. “I’m getting a certain déjà-vu surrounding qualifications I’ve worked incredibly hard for,” he said.
©2023 Bloomberg L.P.
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