Job Market Lessons from 2016
It was the year that gave us Trump, Brexit, and the highs and lows of the Rio Olympics – perhaps it was only right that it was narrated by a resurgence of crudely captioned (yet hilarious) Sesame Street memes.
With December tiptoeing to a close, it’s time to look back and evaluate what all the political turbulence has meant for the UK job market. What should graduates finishing their studies in 2017 be preparing for?
The Great Migration
Continuing the trend of recent years, graduate migration to London has proven unstoppable. An independent report by Centre for Cities calculated that during 2014-2015, the capital provided jobs for 22% of all new working graduates. When examining the destination of high achievers after university (graduates with a 2:1 or higher from Russell group universities) the report saw this figure surge to an astonishing 38%.
The magnetic pull of the capital is not hard to understand; over 535,000 private firms operate within its 33 districts and reap the benefits of hiring from a deep pool of skilled employees. It is the equivalent of luxurious watering hole in a rain-starved desert and this oasis is continually being topped up by an annual influx of the UK’s best and brightest graduates.
But with an increasingly oversaturated job market, some of the worst pollution levels in Europe and a hellish daily tube commute, is it time that graduates started looking to other major cities for jobs post university?
A major pull factor for many university leavers flocking to London has been the tantalising promise of superior wages for entry-level graduate positions. In 2014, the average graduate in London was earning just over £25,000, placing the capital a close second behind Aberdeen for the most prosperous graduate salaries. However, this figure fails to take into account the extortionate living costs associated with London life. With rental prices up to 60% higher than other parts of the UK, the average Londoner has just £300 of disposable income after paying bills in comparison with workers in Edinburgh, Cardiff and Sheffield who enjoy £800, £625 and £580 respectively. It is therefore unsurprising that Londoners have the lowest levels of savings relative to annual gross earnings than anywhere else in the UK.
Without a doubt, London is a fantastic place to live and work, but too often the capital is ogled through rose tinted spectacles that perpetuate the misconception that a thriving career must come at a personal impoverishment.
This belief that London is the only option for work is simply no longer valid. Tech companies in Bath and Bristol have enjoyed extraordinary seasons of growth, employing 275,000 people and generating cumulative revenue of £96.6 billion. Edinburgh plays home to industry titans such as Skyscanner, Amazon and Rockstar North, who employ a significant proportion of the 17,000 technology workers in their Scottish headquarters. For the budding financiers, Deutsche Bank and HSBC’s impending move to Birmingham is a promising sign of on-going commitment to financial innovation within the city. This goes without mentioning the blossoming employment opportunities in Newport, Derby, Cambridge, Brighton and the competitive salaries to match. So third years, don’t rule out sipping on your double vodka red bull somewhere more affordable.
Regardless of your political persuasion, Britain leaving the European Union has left a huge question mark over graduate prospects. The European environment in which UK professionals and companies have traditionally sought employment has been irrevocably changed by the results of the June referendum.
For the moment, it seems that 2016 graduates will have emerged relatively unscathed from the political upheaval. However, there have been some gloomy early indicators for a bumpier ride for those graduating in 2017. Theresa May has promised to trigger Article 50 by the end of March 2017, thus kick-starting Britain’s negotiating timetable. The annual survey from the Association of Graduate Recruiters found that the number of graduate vacancies offered by top companies has dropped 8 per cent from last year, despite promises made by HR top dogs at KPMG and IBM that graduate recruitment will remain stable.
The most conclusive analysis of Brexit’s impact on the employment market has been provided by CIPD in their Autumn Labour Market Outlook. They argue that despite the slight falter in employment figures compared to previous years, employment remains robust and in a period of growth, albeit it somewhat reduced. There will be some volatility across private sector services, the UK’s biggest and most profitable export. This is bad news for those studying economics, law or humanities degrees and looking for a future in media, PR or advertising. They’re likely to find it more difficult to find work as companies cut back on hiring to combat potential economic uncertainty.
Crucially, much depends on the UK’s ability to hang on to its reputation as an international hub for business, art and trade. The retention of major legal and financial titans will depend on Theresa May’s insistence on a “hard” or “soft” Brexit, and whether corporations can foresee a prosperous future in the UK if access to the European single market is halted.
Frustrating though the current political stalemate is, there are signs that Brexit will not be a repeat of 2008’s financial crisis.
- UK banks have 10x the capital on hand so they can continue lending to small businesses and stimulating economic growth.
- With regards to the candidate marketplace, times of uncertainty tend to prompt people to seek stability elsewhere in their lives by minimising risks they might normally have taken. In practical terms, it is likely that there will be a reduction in professionals seeking new jobs, thus shrinking the talent pool somewhat and giving a chance for new graduates to shine through.
- Studies have also shown that in times of necessity, great innovation takes place. Nowhere is this more evident than in the rise of the startup. During the UK’s recession startups were the most bullish industry of all; 21% hired new staff during this period of economic volatility. Startups launched during the recession also proved more profitable in general than companies that launched during times of plenty.
2017 will require graduates to be more innovative than ever, looking outside of the box to new regional hubs for job opportunities, getting involved with up and coming startups and learning to pick up some of the lost skills from a depleted European workforce. It is easy to feel helpless in a time of political uncertainty, particularly when there is an information deficit on what the future holds, but never has there been a better time to capitalise on the skills that are readily available to all of us: learning foreign languages, volunteering within our communities and building online portfolios. We must overcome inaction and the “we can’t do anything” rhetoric with a fervent desire for self-improvement and a deep-rooted confidence in ourselves as young, hardworking professionals.
Anna Howell is a regular contributor for the Inspiring Interns blog and is currently in her third year studying English Literature and Creative Writing at Brunel University London.
She has a passion for social justice journalism and short story writing and is looking forward to a career in copywriting and freelance journalism. You can read more of her work on her blog: www.themothership.live
Inspiring Interns is a graduate recruitment agency which specialises in sourcing candidates for internship jobs and giving out graduate careers advice. To hire graduates or browse graduate jobs London, visit our website.