Jobs for British university graduates are drying up at twice the speed of the remainder of the labor market, fueling concerns that corporations aren’t investing enough of their future workforce.
According to data from job search engine Adzuna provided to Bloomberg, the variety of job vacancies for graduates fell 30.2% in February in comparison with a 12 months earlier. This compares to a decline of 15.1% across the economy.
“These new entrants are fundamental to the success of the economy and the future labor market,” said Kate Shoesmith, deputy chief executive of the Recruitment & Employment Confederation, an industry group. “Companies need to think about how they will attract new entrants in such a market and what their long-term HR strategy will be.”
The decline in opportunities for graduates is a symptom of a loosening labor market as employers cut hiring after the economy slipped into recession last 12 months. This reflects the Bank of England’s efforts to contain inflationary forces with rates of interest at their highest in 16 years, which has helped to ease upward pressure on prices from rapid wage growth.
A separate survey by REC released on Monday showed demand for workers fell within the fifth month to levels near 37-month lows. The industry group measured starting salary growth rose at its slowest pace in three years. It also showed that more candidates were searching for jobs.
“Ongoing economic uncertainty has caused many business leaders to delay key investment decisions,” said John Holt, senior partner at KPMG, which contributed to the REC survey.
For young people, essentially the most alarming trend is the declining variety of entry-level jobs. Those leaving university face a disproportionately tough market. The Adzuna data complements figures from Reed Recruitment last 12 months which showed graduates are facing the issue worst market in years.
The result’s declining wage pressures, a trend welcomed by the Bank of England and lamented by graduates. According to Adzuna data, recent jobs across the labor market yielded salaries 3% higher than the previous 12 months. This is the bottom value in three years.
Across all graduate jobs, wage growth remained flat in 2024 as employers backed away from the massive pay increases that they had to supply shortly after the pandemic to draw needed staff.
The result’s that fewer young individuals are working, reducing the labor supply. More than 500,000 people aged 16 to 24 were economically inactive between October and December 2023 – not in education, employment or training. While that is down from the post-pandemic peak between July and September last 12 months, the figure continues to be 7.5% higher than a 12 months ago.
According to a REC survey, employers’ reluctance to rent entry-level staff is on account of lower confidence within the prospects. Sentiment around hiring and investment decisions is at its lowest level in 12 months. Shoesmith said lower rates of interest would help corporations create “leeway” of their budgets to rent more employees.
“Giving an entry-level professional a chance can be viewed as a risk,” Shoesmith said, “and many employers simply don’t have that economic support right now.”
