Graduate job market trends in 2023
Last updated: 21 Jun 2023, 15:41
Find out what the future holds for the graduate job market in 2023 with our predictive – not prescriptive – look at emerging patterns in employment.
The graduate job market that opened in September 2022 started well. Post-pandemic recovery appeared to be tentatively underway and graduate employers have set up stalls in the market and rolled out the vacancies. In Autumn 2022 the Institute of Student Employers (ISE) surveyed its members – typically the largest employers with graduate programmes – and revealed that graduate recruitment in 2022 surpassed pre-pandemic levels, and increased by more than 20% on 2021. The same survey expected a 6% increase in student hires for the coming year (2023).
But since then the UK has been hit by economic headwinds: spiralling inflation; forecasts of a recession; what the government has dubbed a cost-of-living crisis; supply chain issues; a seemingly ever-increasing number of workers’ strikes over pay and conditions; dwindling international relations; and energy shortages. Things had started to get better, but there are problems for individuals and businesses alike.
If you’re concerned about how such issues might impact you, why not check out our article on job hunting during a recession or what to do if you’re struggling to find a job after graduation .
So, what is going to happen to the graduate job market in 2023? We have looked through the latest statistics to identify key trends to inform your career thinking.
The caveat is that this is predictive, not prescriptive. Look at the situation in relation to your personal circumstances and remember that if we’ve learned anything from the last couple of years, it’s that anything can change at any time in relation to the economy, employers and the government.
Employers are still hiring. To give you an idea, there are 1,500 vacancies being advertised on targetjobs at the time of writing. This number is double what it was at the end of the last pandemic lockdown. Be aware, too, that some professions or specialisms tend to do better in uncertain economic times than in more stable ones. For example, accountancy and law may have countercyclical work in the sense that companies raise more disputes in a recession to try to reclaim funds and an increase in liquidations or administrations can see more work for accountants.
However, in uncertain times you usually face stiffer competition for roles: the ISE reported that in 2022, among its members, the average organisation received 62 applications for each vacancy – and this was 5% down on the previous year, reflecting what seemed to be the start of a return to normal following the turmoil of the pandemic.
What does this mean for my job-hunting chances?
Keep applying for jobs. While employers could withdraw an offer if faced with a crisis – some employers did so at the start of the coronavirus pandemic – many are reluctant to weather the reputational damage that brings and do so only as a last resort. It is much easier for them to freeze future hiring than to rescind current job offers and so ‘locking in’ an offer early will put you in good stead. If you need more information, check out our article on job offers, how to accept them and what happens when they’re withdrawn .
Make sure, too, to submit high-quality applications. You’ll need to beef up your applications by tailoring them to the employer. You can find out more about this later on in this article.
A recent Office for National Statistics (ONS) flash estimate for October 2022 put the median monthly pay for the UK at around £2,131 (or £25,572 per year). This isn’t a useable estimate of how much you’re likely to earn in a graduate role because statistics such as this one will vary according to region, age and a host of other factors. However, it does serve as a useful benchmark when compared against expected and average salaries for different sectors that tend to hire graduates.
The ISE survey suggests the average salary for graduates sits at £30,921, with average salaries for accounting (£32,316) and law (£42,810) outstripping that. Engineering salaries for graduates fall somewhat short at an average of £28,667, but this may be due to the various disciplines of engineering and qualification status (chartered engineers will likely earn more for example) as well as competition with apprenticeships (extant in accounting, but still very much in their infancy for the legal sector). The variation may also be accounted for by location – while much of the high-flying, high-paying legal sector operates out of London with its equally high-flying living costs, engineering employers will be based around the UK and as such will pay less relative to the hiring area and cost of living.
It is worth noting that the ISE member firms are likely to be the biggest in their industries and will therefore pay more than smaller or mid-market firms. That said, there is a reality that major law and consulting employers still offer in the region of £40,000–£70,000. Add to that the fact that salary increases in law can see your salary rise by more than 100% over the first three years, and the cost-of-living crisis should be weatherable (unless you are Sir Peter Bottomley that is).
What does this mean for you in terms of graduate salary in 2023?
This is a trigger warning that the following sentences are likely to tell you how much your food costs and other essentials are increasing by at the end of 2022. The Bank of England rate of inflation stands at 11.1%, towering above the bank’s own target rate of 2%. If graduate salaries increase by the same meagre 1.4% next year as they did between 2021 and 2022, this could mean that average pay for graduates takes a significant real-world nosedive of 9.7%. This is not to say that being fresh out of university means that you fall to the bottom of the economic ladder – graduates still statistically earn more than school leavers, with the average school leaver starting salary sitting at less than £20,000 per year, and as mentioned above earn more than the national average.
The shifting attitudes to how important wages and personal finances will be is reflected in the most recent research. Graduate research firm Cibyl undertook a cost-of-living survey of approximately 300 UK graduates and found that 81% of graduates now prioritise a high, long-term salary in their employment offer, alongside valuing extra benefits and a high starting salary. This matches up with information provided in the UK 300 , drawn from the Cibyl Graduate Research UK Survey 2022 of approximately 65,000 graduates, which suggested that 35% of all graduates felt that a high starting salary was a very important factor when choosing an employer (up 7% on last year).
Nationally, wages may not be keeping pace with inflation, but there is some evidence that employers are taking action. A release by the Chartered Institute of Personnel and Development (CIPD, a body for human resources professionals) suggested that a third of employers were looking at wage increases to support their staff through the cost-of-living crisis, with further support in the form of flexible working, financial guidance, improved benefits and bonuses also considered.
The rate of inflation is expected to come down again in mid-2023 so, depending on when you start work, you might find that life and living costs are easier. It’s also worth nothing that private sector wages have been increasing at a rate of approximately 6% according to the ONS.
What does this mean for my future earnings?
Life will be tough for everyone in 2023, so bear that in mind and act appropriately. It would be worth looking at the average salary for the type of job that you want, as well as the region of the country that you want to work in and at the average cost of living for that region. For those that are ultra-cautious with their financial planning, you might want to factor in anywhere between a 6% and 12% increase in your potential living costs, at least for the first six months of the year, and have contingency plans in place. If you really want to work in a particular sector, it may be that you’ll be willing to take the risk to get into something that you’re passionate about and you’ll have to find a way to make it work regardless of economic shifts.
You don’t have to look far to find a plethora of occupations that are desperate to hire in 2022 moving into 2023. Though not particularly scientific, Googling ‘UK jobs crisis’ will bring you the news headlines giving the industries that are desperate for workers at the moment. Despite the gloomy economic picture, there are approximately 1.25m job vacancies and a chronic shortage of workers to fill them. Social care has been one of the sectors hardest hit, with nearly a quarter of a million vacancies at the time of writing, but there are further shortages in retail, hospitality, agriculture and manufacturing. A good number of the roles in these areas do not require a degree, however, although it’s not unknown for graduates starting out in these roles to work their way up into management (or be put on the employer’s management training scheme if it has one).
At a graduate level, targetjobs paints a good picture of where most of the vacancies are. Of the 1,500 live on the site at the moment, some of the biggest numbers are in the engineering and science sectors , closely followed by the traditionally higher paying sectors of accountancy , law and consulting .
This is unsurprising, particularly with regards to engineering. Engineering is frequently the sector in which more employers struggle to find graduates to fill the number of roles available. Engineering disciplines top the ISE’s list of hardest to fill jobs, followed closely by IT roles and other technical/analytical roles and accountancy roles (though remember that financial and professional services are a massive part of the UK’s economy).
The UK has had a shortage of engineers for quite some time now and, if anything, this problem is only going to get worse. The Institution of Engineering and Technology (IET) issued a release at the end of 2022 urging the government to tackle the £1.5bn engineering skills shortage through school education. It also suggested that there was an estimated shortfall of 173,000 workers in the science, technology, engineering and mathematics (STEM) sector.
The shortage of STEM workers translates easily into jobs related to the environment as well. Engineering UK released a report in 2022 that deemed the UK to be ‘sleepwalking toward a net zero skills shortage’, referring to the lack of engineers needed to meet many of the commitments that companies have to reach net zero carbon emissions in workplaces. While many of these roles will be with engineering firms and manufacturers (everything from transportation and construction to energy and power), an increased focus on environmental, social and corporate governance (also known as ESG) across the board means that anyone with the skills to reduce the negative impact a business has on the world is likely to be in demand, with STEM skills at the top of that list.
Does that mean you need to retrain into science and engineering as a graduate in 2023?
This does not necessarily mean that you need to retrain. While you would need a specialist degree to enter some specialist professions (you may not be able to use a degree in photography to become an ecologist, for example), the ubiquitous need for IT specialists, data scientists and programmers that underpins every modern business means that there are routes into these roles for graduates of all degree disciplines. You can find out more by taking a look at our article on starting a technology career with any degree .
If you’re not certain what you want to do at all, you could also check out our article entitled I have a degree, now what?
You could also take a look at the UK 300 , which uses the results of the Cibyl survey to determine the employers that graduates find most appealing. Many of the top ten employers are tech companies, such as Amazon, Google and Microsoft. In the top 50 you’ll also find engineering giants such as Rolls-Royce, BAE Systems and Jaguar Land Rover. This year, a lot of these are joined by major pharmaceutical companies such as AstraZeneca, Pfizer and GSK (likely with increased interest as a result of the pandemic). It might provide you with some inspiration as to what you want to do, but it paints a picture of where people want to go, in the sense that there is a general desire to work for these companies from your peer group.
What if you don’t want a job in tech/engineering as a graduate in 2023?
The staple professions that have always had a shortage and are always looking for new hires remain very much unchanged (except for the increased struggle to keep up with wages due to inflation). You could take a look at:
- Becoming a teacher
- Going into medicine
- Working in social care or social work
- Retail, logistics and project management specialists
- The public sector (civil service/government)
This list is always in need of fresh hires, but many of the professions on this list have announced or are already conducting strikes at the end of 2022 related to pay, benefits and working conditions. There is also still a hiring freeze in place for the Civil Service. It could be a rewarding career in a field that you are passionate about, but before you make any decisions, do read around to find out what the issues are and how it might impact your work/life balance or wellbeing.
It’s worth noting that the private sector is not immune from problems of its own. While it’s less likely at major graduate employers with established training and development regimes, upskilling (training workers when they are established in the role to enhance their skills set) often takes a hit at startups, SMEs and other smaller employers as they prioritise clawing back profit over providing for their staff.
According to a blog from the Institute for Future Work in 2021, the pandemic saw many employers cut back on training for their staff, and skill levels in the UK remain low compared to other advanced nations. This means that while you may get a job that you see as a good opportunity straight out of university, you may find it harder to progress, learn more and become more employable (and better paid) later on in your career. This may well have been impacted by the growth of online learning during Covid-19 and the perception that employees will take time out of their own lives to improve their skills (despite the research suggesting that 86% of work training comes from employers).
What does that mean for my career decision making?
It’s always a personal decision where you aim to get a job after you graduate. It’s one that you need to make based on your own skills, qualifications and passions, factoring in your living requirements as well. We’ve put together an article that can help you decide what you’re looking for in a job , so use this to help inform your decision making. You should also have a look at the timelines involved for a lot of graduate roles by reading our piece on when to apply for graduate jobs .
Job sectors with high demand do not mean that you are automatically guaranteed a job if you manage to segue your experience or your degree into them. You’ll still need to stand out from the competition, particularly for graduate schemes or major employers. You can find out more about the first hurdle to cross, application forms, with our graduate guide to applications .
That said, 48% of major graduate employers, according to the ISE, still stipulate a minimum of a 2.1 degree for vacancies. This is the lowest rate of employers requiring the degree grade that it has ever been and there does seem to be a shift away grades on applications, but it is not yet enough to discount it entirely. Only a quarter of employers have moved to no minimum entry requirements but there is increasing focus on ‘cv blind’ recruitment. If your studies haven’t gone entirely according to plan, this will sound like good news, but there is always the possibility that employers will be looking more at the other aspects of your CV in relation to how suitable you are for the position. You’ll need to make sure that you’ve presented any employability skills that you have in a strong fashion, do well in psychometric tests and research employers appropriately to make sure that you can demonstrate that you match their values and needs.
Gamification, virtual reality and various other technological marvels that were due to ‘revolutionise’ the recruitment process are not used in the majority of cases, according to the ISE, but there is an expectation that artificial intelligence (AI) will play more of a role in hiring in future with 9% of employers using it in the recruitment process. This does not mean you’ll be assessed by an AI, fun/grim as that might sound, but rather it will complement the existing recruitment process.
If you’d like to find out more about the most commonly used recruitment processes, check out our article on the most common recruitment methods .
The only other thing to note in terms of employers’ attitudes to recruitment is the likely increase in virtual recruitment. Around half of the ISE’s employers expected that recruitment would be mainly virtual over the coming year, which includes interviews and assessment centres.
The Cibyl survey uncovered that half of all student respondents found virtual meetings with employers less personal and less engaging, and 38% were suffering from ‘Zoom fatigue’. People are keen to get back in person, and it shows in the way that graduates are job hunting, with around a third of all students who have engaged with employers have done so via careers fairs, skills workshops, guest lectures and employer presentations.
What does that mean when I need to engage with employers?
The bottom line is that you can meet employers at events, and employers are visiting campus, but at least for the short-term virtual recruitment is here to stay. This is a double-edged sword. On the one hand, you may be feeling ‘Zoom fatigue’, but it also opens up the opportunity to apply for jobs further away or at bigger companies that you might not otherwise have access to. You may have more of an opportunity to attend insight days or virtual internships that will net you experience for your CV that might have been out of reach otherwise. Try not to look on virtual hiring as a pandemic hangover, but rather look at how you can make it work for you.
If you want some tips on how to make the most of a virtual recruitment process, check out our articles on virtual careers fairs , virtual interviews , virtual assessment centres and virtual internships .
Good luck for 2023
We hope this article was useful in giving an overview of basic recruitment trends in early 2023. If you need more help with career planning, why not check out our dedicated section on career ideas on targetjobs for more inspiration.
Written December 2022.
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