The Impact of Covid-19 on Recent Graduates’ Career Decisions and Outcomes

Southampton Education School, University of Southampton and AGCAS

Dr Michael Tomlinson , Associate Professor

This report, which is a collaboration between the University of Southampton and the Association of Graduate Careers Advisory Services (AGCAS), is the first release of a longitudinal study into how the pandemic has affected recent graduates' career decisions and outcomes. The project has been funded by the Economic and Social Research Council (ESRC) as part of UK Research and Innovation’s rapid response to COVID-19.

Introduction

The Covid-19 pandemic has had an unprecedented impact on health, education, employment, and society in general, on a global scale. The magnitude of the recession caused by the pandemic is unparalleled in modern times. Gross domestic product (GDP) declined by 9.8% in 2020, the steepest drop since consistent records began in 1948.  The Bank of England has predicted that the level of economic output (as measured by GDP) will regain its pre-pandemic level by the end of 2021, but even when the economic shock of the pandemic does eventually dissipate, the crisis may result in permanent damage, or “scarring”, to the economy.

“Scarring” is also a phenomenon that affects individuals. Individuals whose employment outcomes are impacted by situations outside of their control can experience the depletion of their immediate and longer-term career prospects, akin to scars forming in their employment experiences and identity.  Evidence from previous economic shocks, such as those seen in the 2008/9 labour market, shows that individuals who have recently left formal education (including university) are at increased risk of scarring. These scars may appear as sustained unemployment, financial hardship, wage reductions and lowered job quality, plus social and psychological impacts. The economic turbulence during the 2008/9 Global Financial Crash had significant short and long-term effects on workers, with individuals entering the labour market for the first time more likely to experience job mismatch, decreased earnings and reduced opportunities for career development.

Whilst the Global Financial Crash of 2008 and the economic crisis induced by Covid-19 share similarities, they are also different in terms of how different sectors have been affected, the speed and shape of the shock and the extent to which different international markets and currencies were affected. As a result, we cannot make direct conclusions from previous data about the experiences of new labour market entrants into the Covid economy, and longitudinal studies will be needed to understand the long-term scarring of the pandemic on the employment outcomes and career prospects of graduates. However, early indications suggest that graduates are already experiencing occupational mismatches (employment in non-graduate level roles), delays in labour market entry and prolonged unemployment.

Not all industries and jobs have been subject to equal economic shock. While some industries shrank by up to 90% during 2020, others recorded marginal growth. The hospitality industry recorded almost no output during periods of lockdown, but industries such as information and communication, where staff could largely work from home, saw little change. On the other hand, the UK’s arts and entertainment sector has been one of the areas worst affected by the pandemic, with a furlough rate second only to the accommodation and food sector. Nearly a fifth (16.6%) of 2017/18 graduates studied subjects in creative arts, with a third of creative arts graduates working in arts, design, and media professions. Graduates from these subjects were already more likely to be unemployed than the general graduate population (5.4% unemployed 15 months after graduation compared to 5.1% for all graduates) so specific policy interventions may be needed to support these, and other graduates disproportionately affected, into meaningful outcomes.

The one-year period following graduation represents a significant transitionary period for higher education graduates, many of whom will have made considerable investment choices and accrued substantial costs towards higher education. It was clear, even very early into the pandemic, that the weight of economic fallout would be unequally shouldered by people aged 18-24, those from an ethnic minority group, women, young workers, and disabled workers. Many graduates from higher education will be part of a number of these intersecting identities.

Even before the 2020, the competitive graduate labour market combined with rising youth unemployment and increasing volume of students experiencing mental health difficulties at university means that entering the labour market for the first time or re-entering the labour market with different skills, qualifications, or expectations, can have a significant impact on mental health and wellbeing. The cohort who graduated from university in 2020 have already overcome significant challenges in the final months of their degree, such as adapting to online learning and assessment, lack of formal graduation celebrations and disruptions to post-graduation work, travel and study plans. It is possible that the challenges that already existed in the labour market will be exacerbated by the pandemic, but the evidence on how Covid-19 is affecting graduates’ integration into the labour market remains limited.

Recommendations for higher education institutions and career services

1. Higher education institutions (HEIs) should recognise the impact that Covid-19 has had on graduate employment and opportunities for career development and the vital role that careers and employability professionals play in supporting graduates. As a result, they should explore the extension of access to relevant university support and infrastructure, e.g. via career and skills development online learning resources.

2. Careers and employability services should be resourced appropriately in order to provide targeted support to graduates most affected by the challenging labour market, which may involve the recruitment of additional and/or specialist practitioners or investment in further professional development in best supporting graduates during challenging labour market transitions.

3. HEIs should ensure that careers education, information, advice and guidance (CEIAG) and opportunities for work experience, experiential learning and skills development are considered as essential parts of the university experience and integrated in ways that best complement existing programmes and values that exist within the institution’s employability ecosystem.

4. HEIs should continue to draw on alumni networks to support graduates, which might include targeted support and mentoring for those experiencing greatest challenges. Continued effort should be made to ensure that graduates – particularly female graduates and those who are first in their family to go to university – are aware of the support on offer for them. Any increase in demand for support from graduates needs to be resourced appropriately.

5. Careers and employability services should continue to offer opportunities for graduates to develop their social capital, with a particular focus on disabled graduates and continue to explore new ways of helping students develop meaningful professional relationships in a virtual environment.

Recommendations for employers of graduates

1. Employers should commit to high-quality development programmes and on-the-job training to support a cohort of graduates that will need to be agile in a challenging labour market.

2. Employers should demonstrate a commitment to equality, diversity and inclusion through ensuring the job vacancies clearly asks candidates whether they require reasonable adjustments, adjusting recruitment process accordingly and providing structured support and mentoring for graduates who may find the transition into employment more challenging.

3. ransparent information about available openings and how they recruit graduates.

4. Employers should inform graduates if they have been unsuccessful in the recruitment process, wherever possible. All unsuccessful applicants who reach the final interview stage of the recruitment process must be informed that they are unsuccessful and given the opportunity to receive feedback.

Recommendations for sector organisations and policy makers

1. Graduates should be considered separately to other groups (e.g. young people who are classed as NEET) in policy recommendations.

2. Sector organisations, including but not limited to AGCAS, should continue to facilitate the sharing of best practice in HE careers and employability delivery, including models and initiatives that have proven value, and relevant resources across institutions.

3. This research has shown that graduates have experienced the Covid-affected labour market differently based on their personal characteristics, but it does not explore the impact of multiple intersecting identities. Funding is recommended to conduct further research to understand how personal characteristics influence the transition into the labour market and develop evidence-based interventions.

4. Funding should be provided to UK regions to allow HEIs to collaborate locally to create programmes, such as paid internship programmes, that support SMEs to recruit students and graduates.

5. Any funding or policy interventions should be directed through higher education careers services as experts in the career development and outcomes of their graduate population.

Facebook Twitter YouTube LinkedIn RSS