The early careers labour market is evolving. The pandemic severely impacted internships, hybrid working is changing graduate recruitment, and many employers are reviewing their entry requirements to cast a broader net for talent.
My guest this week is Dr Charlie Ball, Head of Labour Market Intelligence at Jisc. Charlie is one of the UK’s leading experts on Graduate employment with deep insights to share on current market trends that are applicable globally. A must-listen for anyone involved with interns, graduates and college recruiting.
In the interview, we discuss:
• How the early careers labour market has evolved in the last three years
• The long term consequences of the pandemic’s impact on internships and work experience
• Hybrid working and accredited apprenticeships
• The changing link between person, place and employment
• Why this recession is different for the labour market
• Why are employers dropping or lowering entry requirements?
• What does the future look like?
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Transcript:
Seek Out (0s):
This episode is sponsored by Seek Out, the number one in talent intelligence and diversity recruiting software for enterprise companies.
Matt Alder (28s):
Hi there. This is Matt Alder. Welcome to episode 498 of the Recruiting Future Podcast. The early careers labor market is evolving. The pandemic severely impacted internships. Hybrid working is changing graduate recruitment and many employers are reviewing their entry requirements to cast a broader net for talent. My guest this week is Dr. Charlie Ball, head of Labor Market Intelligence at JYSK. Charlie is one of the UK’s leading experts on graduate employment with deep insights to share on current market trends that are applicable globally.
Matt Alder (1m 10s):
A must listen for anyone involved with interns, graduates, and college recruiting. Hi, Charlie, and welcome to the podcast.
Dr. Charlie Ball (1m 20s):
Hello, Matt. Nice to be here.
Matt Alder (1m 21s):
It’s an absolute pleasure to have you on the show. Please, could you just introduce yourself and tell everyone what you do?
Dr. Charlie Ball (1m 28s):
Well, I’m Dr. Charlie Ball, and I’m the head of labor market intelligence at JYSK. JYSK is the large organization not-for-profit organization within the higher education sector that looks after services and supports for students and practice. It’s the digital organization for the sector and I’m the lead market expert there.
Matt Alder (1m 51s):
Tell us a little bit more about what that entails.
Dr. Charlie Ball (1m 53s):
Well, essentially my role is to do a lot of the primary research or to lead a lot of the primary research that underpins a lot of the practice of the UK’s higher education career services. Now, as you know, as some of our many analysts know, the higher education system in the UK has a very strong and very well integrated career service system, or institutions have some kind of career service. They rely on basic information about the graduate labor market in order to be able to operate. My role is to oversee the production of that basic information that HR career services use, and also to an extent, colleges and essentially anybody else who wants to know about the employment of graduates.
Dr. Charlie Ball (2m 41s):
The list of stakeholders there is quite long.
Matt Alder (2m 44s):
Yeah, absolutely, including lots of people who are listening right now. Really keen to start, to digging into some of the things that you are seeing in 2023 and some of the things that might happen. Before we do though, it’s probably worth just having a little bit of a look into how graduate recruitment and the labor market for it has evolved over the last two or three years with the pandemic and everything. What trends have we been seeing? What’s changed? What’s was the state of the market going into 2023?
Dr. Charlie Ball (3m 15s):
It’s a very interesting question, Matt. In order to answer it effectively, I’m going to overjoy your listeners by taking us back to 2020, in the start of the pandemic because I think we all want to relive that period. What first happened is, in fact, it was around three years ago in the UK certainly that it became clear that all was not well. I remember being at Houston Station in early February, 2020, having just delivered a keynote speech and a conference. It was on the BBC news that a large conference, which had taken place at Earl’s Court, which had been attended by a number of MPs, a number of people there had been tested positive for Covid and been forced to isolate.
Dr. Charlie Ball (4m 0s):
It was starting to really strike home with the UK public that this was something that was gonna be a bit out of the ordinary. March, 2020 was the first lockdowns for the UK, but what actually happened in practical terms for the labor market was, in about a fortnight, the whole of the UK economy shut down. Well, in physical terms, it didn’t shut down in entirely. Everybody went to their untested virtual solutions on. We started using conference programs and home working in a big way. I think the fear was that these systems were not going to hold.
Dr. Charlie Ball (4m 45s):
As a consequence, business will be phenomenally disrupted and we would see widespread hardship, business failure, and unemployment. What actually happened is the systems held, and particularly for professional workers, and now we are going to move into the graduate labor market here. I acknowledge that many elements of the graduate labor market are very different to other parts of the UK employment experience. In particular, much of the graduate labor market was well suited to virtual working, so the large numbers of professional workers in IT, in professional services, in office and desk jobs, it turned out that they were able to transition and their businesses were able to transition to virtual working and hybrid working very, very effectively, far more effectively.
Dr. Charlie Ball (5m 41s):
It beats out all of the most optimistic case scenarios. March and April of 2020 is when you would would start to see budgets being set for things like work experience or budgets being spent for things like work experience and apprenticeships. Those were hit very badly. Work experience and apprenticeships in particular pretty much vanished from the market overnight, or graduate training schemes. The money had already been spent. In many cases, the recruitment had already been done for summer 2020. We did hear quite a few stories of offers being rescinded, but by and large, quite a lot of graduate labor market activity for graduates who were leaving in the summer had already started.
Dr. Charlie Ball (6m 31s):
As the summer went on and the furlough scheme, which we must remind ourselves in the UK certainly was very effective, preserved many jobs that started the outset. There were respected lead market economists saying that by autumn 2020, we might be seeing four to 5 million people out of work. An absolutely phenomenal number. The furlough scheme was originally intended to only last until September, 2020. After that, the outlook for particularly for small businesses looked very, very bleak. Of course, in the event, because of that bleak outlook, the fur scheme was extended. At the outside of the pandemic, the World Health Organization told us it might take to 18 months to get a vaccine.
Dr. Charlie Ball (7m 16s):
In the end, the lead time to a vaccine was substantially shorter. By autumn 2020, it was clear that virtual working was more effective than people believed and productivity was up. In fact, in some cases, worker satisfaction was up. We had a vaccine on the way and mass unemployment hadn’t taken place. By autumn 2020, it was starting to become clear and I was having quite a lot of conversations. It’s starting to become clear that, if anything, many graduate businesses, particularly those that had successfully switched along with their clients to hybrid working, may, if anything, had under recruited during the pandemic itself, the main parts of the pandemic.
Dr. Charlie Ball (8m 2s):
We then fast forward to the recruitment season for 2021, early to late spring. In May, 2021 was when all the remaining restrictions were lifted in the UK on movements and everybody tried to recruit at once. The recruitment market went absolutely mad, and that’s when we started to see all the big headlines in the UK. They’ve been bubbling under in the trade, and we were already getting really quite concerned in late 2020 and early 2021 about shortages in health, education, social care, IT engineering. The other thing that happened is, towards the end of the pandemic, we started to get to a situation where we have more vacancies than unemployed people in the UK and that’s now become the status quo.
Dr. Charlie Ball (8m 48s):
To cut a long story short, the pandemic did not have the effect on the graduate labor market that I think the large majority of people predicted. It didn’t wreck the labor market for graduates. It did cause some problems in terms of ability to access work experience, but those graduates who graduated during the pandemic, actually, we’ve now got the data for their first destinations 15 months after graduating. The graduates who graduated during the pandemic actually saw very little or seem to have seen very little short to median term scarring of their labor market prospects. The main effect has been that now, and this is still very, very profound, still 80% of the IT workforce, 70% of the professional services workforce is now working in a hybrid way, have been working in a hybrid way for three years.
Dr. Charlie Ball (9m 42s):
Now, we can assume that’s embedded and that has been the main change for graduates of the pandemic. The fact that hybrid working is now the business model for large parts of the jobs market, large parts of the professional jobs market, many possibly most, it’s difficult to get put an exact figure on it, but it’s certainly a large portion of graduates will now work in a hybrid way in the future. Most people who are working in a hybrid way in the UK at least have degrees. I think that is an underappreciated distinction. Hybrid working is basically for graduates.
Matt Alder (10m 21s):
Before we move forward into 2023, I suppose a couple of things to ask you about that. Firstly, obviously, the lack of people getting work experience and internships back in 2020, 2021. Do you think that will have a material effect down the line?
Dr. Charlie Ball (10m 44s):
I think the whole work experience training question is a really, really interesting one because if your company’s now working on a hybrid model, delivering training, delivering work experience, and apprenticeships, particularly accredited ones and particularly ones that require an assessment, it’s now a different challenge. I think it’s one that business doesn’t yet feel it’s completely met. We have this situation where businesses have not brought that work experience to quite the extent because particularly, say if you’re offering an apprenticeship that’s got an accredited portion at the end, in order to do that, you need people in the office all the time and you need someone to assess the work that your apprentice is doing.
Dr. Charlie Ball (11m 30s):
There are challenges to that that I think industry has not come to a consensus on how to meet. That’s very interesting from my point of view as a specialist in employment. I do think there is a great prize to be won by any organizations, sectors, or individuals who solve those problems to industry satisfaction, because to be candid, I think there are new business models emerging, delivering, and assessing training work experience, and even basic functions like HR. Of course, your average HR, particularly your standard HR models do assume essentially, if you’ve got an an employee who’s struggling at work, for example, your colleagues will notice that and you can have a quiet word is the first process.
Dr. Charlie Ball (12m 24s):
In a virtual environment that’s very different. That’s some of the issues to do with wellbeing and and and mental health have started to come up. I think there are a lot of implications in those lines that have yet to be worked out. The work experience model and the way that work experience is delivered is, I think, we are still going to be as a society and, particularly, in terms of the way that we look at work expectations for people to have certain kinds of work experience. I think it’ll take a few years before that settles down.
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Matt Alder (13m 41s):
If graduate work is mostly becoming hybrid or perhaps even remote, what effect does that have on location mobility in terms of where people work?
Dr. Charlie Ball (13m 56s):
This is from my point of view. From my own research interest, you’re right. This is a particular interest to me. I’ve worked for a long time on questions of less developed areas, remote peripheral, rural locations, and the way that you furnish a professional job market or the way that graduates move around between locations. Hybrid working throws an entirely new factor into the mix because, of course, your work or your business may based in one location, but you might be in another. My optimistic hope is that this will democratize to an extent some of those questions.
Dr. Charlie Ball (14m 42s):
For example, in the UK and in many parts of the developed world, this is an issue particularly in the US, with its wide geographies and large amounts of rural occasion, you have this flight of skilled workers away from smaller towns and rural areas to the cities where the jobs are. They take their spending power with them. They take their economic and social power with them, but now, if you are, say, a worker from rural North Yorkshire, you may no longer need to relocate to leads on London in order to pursue your career.
Dr. Charlie Ball (15m 22s):
You may be able to continue based in a location that’s got a lower cost of living or has lifestyle features that you like, and then continue to work and get roles that were previously concentrated in the cities. That’s my optimistic reading of the situation. We may see, for example, younger people more easily able to access the housing market because they’ll be able to get decent jobs and be based in parts of the world that are cheaper to live in, less fashionable, more remote.
Dr. Charlie Ball (16m 3s):
My worry is, however, that it will also fuel house price input inflation in places like coastal areas where everybody will want to work at the beach, in the hills, or in the countryside. There is a danger that it may also accelerate hollowing out of less fashionable urban areas. I think, fundamentally, it remains to be seen how this will work, but I do think that I’m basically going to have to start again on a lot of the work that I’ve done. I’m one of those people who’s done 20 years of work on a particular topic and found the pandemic has thrown that all up into the air.
Dr. Charlie Ball (16m 50s):
Personally, I quite relish that. I enjoy doing that work and I don’t mind doing it again, but I appreciate some of the old ways of thinking about the link between person, place, and employment may not hold for many workers. I mean, obviously, if you’re a nurse, you are still going to go work in hospital, but if you are an IT worker, the whole of the UK, indeed international, is theoretically open to you. That will change things in ways that we can’t foresee yet.
Matt Alder (17m 25s):
I suppose moving on to the current state of the economy in 2023, I was reading through the predictions you were making about the market for the next 12 months. One of the things that you say is that we are not gonna see the type of graduate labor market that we normally get in a recession. Can you explain what you mean by that and what you’re seeing happening?
Dr. Charlie Ball (17m 50s):
Well, normally you will see the graduate labor markets suffer during recession. It’s worth stressing that the labor market for graduates always suffers the least of all the labor markets. That’s the first thing, most qualified. There isn’t a situation, despite some popular discourse about people being overqualified for jobs. There isn’t a situation where people with better qualifications and credentials fair worse than people without them. In general, what you would ordinarily seen a recession, by this point in a recession is you would’ve seen, in advance, the recession happening because recessions are rarely a surprise.
Dr. Charlie Ball (18m 30s):
They rarely come by surprise, particularly to recruiting businesses. You would’ve seen a drop-off in business confidence for about 12, 18 months before the recession happened. Reduced investment, which includes hiring. It’s more usually on things like R&D, equipment, plant, and location spend, but it it’ll also be on hiring. You’d already started to see a gentle drop-off in employment for graduates, which would then, as the recession kicked in, be then followed by a sharp off, and particularly in areas that are reliant on large upfront spend.
Dr. Charlie Ball (19m 11s):
You would see, for example, the engineers usually start to see a downturn in their normally excellent graduate prospects early, because you have the engineering project need quite a lot of upfront overhead to kick in. Two very good canaries in the coal mine, if you like, for the graduate labor market is the first thing is the IT contractor market. You look at IT recruitment firms and when they start to report significantly reduced billing and reduced placements, that’s usually a sign that difficult labor market time is on the way.
Dr. Charlie Ball (19m 53s):
The other thing is you look at engineers and particularly civil engineers. When they start to get laid off in large numbers or their prospects start to diminish, that’s a sign that the construction and infrastructure market is gonna take a bath. That’s a usually a key leading indicator of a labor marketing recession. Neither of those things have happened this time or have happened so far I should say. We likely will know if we have recession or have one coming, but it’s not behaving in the ways that you would normally associate with a normal graduate labor market. At present, the graduate jobs market is defined gravity a little bit.
Matt Alder (20m 38s):
One of the other things that we’ve been seeing over the last few years, but it seems to becoming more of a trend, is employers dropping their entry requirements, either dropping the need to have a degree completely or lowering the class of degree that they’re looking for. What’s driving this and do you think that it’s a long-term trend?
Dr. Charlie Ball (21m 3s):
I do think it’s a long-term trend. What’s driving is simple, a candidate availability, or rather the increasing concern from recruiters, from hiring managers that are missing talented people, which, of course, they have been. There’s the realization that degree grade is linked to other factors than sheer ability. Certain demographic groups are more likely, not withstanding any other factors to get to ones, and they’re all the people who experience advantage in the first place and all the people who are generally overrepresented in professional firms anyhow.
Dr. Charlie Ball (21m 45s):
The other factor is, to be honest, most graduates get to ones, so filtering for them is sometimes more effort than it’s worth. You don’t actually filter out that many people. Some of those people you filter out might have all the qualities that will be valuable to your business, which your business is underrepresented. People who’ve done a lot of extracurricular work, people who have done a lot of actual employment, and people from non-traditional backgrounds are all more likely to get two twos, but they all bring something useful to businesses.
Dr. Charlie Ball (22m 31s):
I do think this is a trend, but of course, it wouldn’t be so much of a trend if we didn’t have widespread candidate shortage in a lot of areas. Fundamentally, that’s what’s driving it. We don’t have enough candidates for tech roles. We don’t have enough candidates in large parts of education, health, and social care. We don’t have enough candidates in large parts of professional services. Fundamentally, hiring managers do want to broaden out their talent pool with the least possible risk to quality, and dropping the 2-1 requirements seems to be an effective way of doing that.
Matt Alder (23m 11s):
There are lots of very disruptive things happening here. We’ve got hybrid working affecting the geographical mobility, we’ve got demand holding up in a recession, and the third thing that we were talking about was, obviously, people reevaluating their entry requirements for these roles. Lots of very disruptive things. Now, as we know from the last few years, it’s impossible to predict the future, but I’d love to get your view on where you think we are going in terms of early careers and graduate recruitment, and what things might look like in, say, five year’s time?
Dr. Charlie Ball (23m 46s):
I think that’s a very good question. I’ll preface that is I am an expert in this area and much of what I say when I predict the future will be wrong. However, I don’t think it’ll be very wrong. Your listeners can take that as they see fit. My definition of an expert is somebody who will admit that they don’t know, so we can’t be entirely sure. My experiences of working in this area is actually things change a little less generally as long as we don’t have a worldwide pandemic that forces everybody to go virtual within a month. Things generally change less in a slower pace than expected.
Dr. Charlie Ball (24m 28s):
If I’ll be honest, I’d say that a hiring manager looking who got into a wormhole to hire early careers hiring in five years time would probably see much that most of it they would recognize, and most of the landscape would be familiar to them. I don’t think it would change out of all recognition, but I think where the biggest changes will be will be innovations that make use of rather than work around this hybrid paradigm. We’ll see innovations, we’ll see further innovations in recruitment and hiring that make use of the ability to leverage hybrid technology and hybrid working.
Dr. Charlie Ball (25m 15s):
We’ll see, as I say, things like training, work experience, apprenticeships, and general HR and employee support are issues in search of a solution. I think in five years time, industries will have settled around the consensus on the best way to address those particular topics. I don’t think they’ll be very different to what we have now, but I think they will be different and we’ll see innovation within the early career space being driven to some extent by those particular topics because that’s where innovation is needed.
Dr. Charlie Ball (26m 0s):
We’ll see much clearer thinking of the effects of hybrid working on things like geographic mobility, and also things like office use. the question of hybrid working is now bound up in people physically using space and how that affects urban local landscapes. We know a lot of businesses divesting themselves of office space and office portfolio and what effect that will have. in five years time, we’ll start to have a clear review of some of the longer term implications OF the effects of the pandemic because the pandemic itself might be effectively over in terms of its large scale effect on individuals.
Dr. Charlie Ball (26m 49s):
Now, we’ve got a vaccine and things are more under control, but the long-term effects of the things that we did will play out over the long term. Things will happen that will be unforeseen events and consequences that we still to chart and it will be interesting to see how we deal with them, but the one lesson we’ve learned from Covid, I think as hirers and as businesses, we can and will cope with it.
Matt Alder (27m 21s):
Absolutely. Charlie, thank you very much for talking to me.
Dr. Charlie Ball (27m 24s):
A pleasure, Matt. Thank you very much.
Matt Alder (27m 27s):
My thanks to Charlie. You can subscribe to this podcast in Apple Podcasts, on Spotify, or via your podcasting app of choice. Please also follow the show on Instagram. You can find us by searching for Recruiting Future. You can search all the past episodes at recruitingfuture.com. On that site, you can also subscribe to our monthly newsletter, Recruiting Future Feast, and get the inside track about everything that’s coming up on the show. Thanks so much for listening. I’ll be back next time and I hope you’ll join me.
