Graduate careers - what a difference a year makes

A new report reveals the impact of Covid 19 restrictions on mid-career graduates, the persistence of the gender pay gap, and the potential longer-term implications for the nature of the graduate labour market.

  • The report captures the impact of the pandemic on a national sample of graduate workers in their early thirties, the majority of whom had by 2019 achieved reasonable job security, and many of whom were balancing work and parenting or other caring roles when the pandemic hit.
  • The findings reveal how the pandemic has impacted workers’ economic position, reshaped their motivations and aspirations, and affected their mental health.
  • Experiences of the pandemic have reinforced existing inequalities in terms of access to secure and enjoyable employment.
  • The gender pay gap revealed in this study of mid-career graduates is unchanged from that shown in a study undertaken in 2002.
  • Working from home creates new potential for discrimination, particularly in access to training and promotion
  • Graduates with confidence in their employer’s concern for the welfare of their staff coped better with the challenges of the pandemic
  • These graduates had faced a difficult start to their careers thanks to the 2008 recession, many reporting that this made them more resilient to the challenges of Covid. Their experience has implications for graduates now leaving higher education, and for policymakers and employers.
What a difference a year makes: the impact of Covid 19 on graduate careers*, published today by the University of Warwick’s Institute for Employment Research, and funded by the Nuffield Foundation, captures the impact of the pandemic on a national sample of graduate workers in their early thirties, the majority of whom had by 2019 achieved reasonable job security, and many of whom were balancing work and parenting or other caring roles before the pandemic hit.It illustrates how the pandemic affected these mid-career graduate workers’ economic position, reshaped their motivations and aspirations and affected their mental health. The report also highlights challenges and considerations for employers as they adapt working conditions and practices to the post-pandemic landscape.Professor Kate Purcell said:“We wanted to find out how the participants in our long-running Futuretrack** study saw their work change during the Covid-19 restrictions, and how the immediate economic impact on demand for products and services had affected their material circumstances, employment and financial security, and their career plans and wider aspirations.”“We found that almost all of our participants experienced dramatic change in their working lives, whether they were furloughed, worked from home, or continued in frontline roles. Many participants working on-site reported ‘frontline fatigue’ while those working remotely often reported exhaustion caused by the breakdown of boundaries between work and non-work time and space, and the difficulties of managing these boundaries.“Employers played a vital role in managing negative impacts: our participants reported that good communication and support led to increased commitment while the lack of communication and support led to a loss of trust in employers and trade unions.”Among the many findings, the authors highlighted the following:
  • Income: 16 per cent of participants said they had seen their personal incomes decline between March 2020 and December 2020.  Some highly-paid graduates experienced pay reductions, but  the groups that saw their incomes fall tended to be mainly among the lower paid graduates, those with gross annual incomes less than £21,000, the self-employed, and those holding jobs in the hardest hit sectors, transport and tourism, hotels and catering and construction.
  • Job security: Only a third of self-employed respondents had been able to rely on government compensation for lost income.  Among the self-employed graduates there was polarisation according to the sustainability of the demand for their knowledge and skills.  Those operating in sectors characterised by erratic work opportunities and high competition had become more insecure and vulnerable during the pandemic, but those in traditional graduate professions and those using and developing new technology mainly reported continued, secure, and even increasing demand for their expertise.
  • Rapid rise of remote working: The Covid restrictions amplified development of new ways of working already being established in many organisations: virtual team-working, online meetings, reduction of non-essential work-related travel, use of technology in production and administration.  Companies which coped well included highly-profitable global and national multi-site organisations which tended to be better-equipped and more able to take account of the changed circumstances in which they were required to operate, but also charities committed to employee participation in decision-making and environmental sustainability, and small companies accustomed to working collaboratively across occupational boundaries.
  • Potential loss of collaboration opportunities and risk to innovation: graduates working in scientific and creative professions and those requiring advanced interpersonal and communication expertise reported that without face-to-face collaborative working, innovation may proceed more slowly and the labour market for the graduates working in the relevant fields will be diminished.
  • New potential for discrimination: the introduction of flexibility into the location of employment is not necessarily a ‘win-win’ situation for employers and employees.  Face-to-face working facilitates informal consultation and greater non-verbal communication in ways that a computer screen cannot.  This is important for recognition of efforts and for promotion.  To the extent that certain groups may find themselves more likely to be working remotely than others, the potential for discrimination may increase.
  • Fear for the future: between 2019 and 2020, 8 per cent fewer participants agreed with the statement ‘I am optimistic about my long-term career.’  Those most likely to remain optimistic about their long-term career prospects were male, had been under 21 when they embarked on their undergraduate studies, came from managerial and professional backgrounds, and had studied in fields such as Medicine & Dentistry or Maths & Computing.
  • Changed views about work/life balance: living through the pandemic and working at home had led many of the graduates to question their previous career-centred lives. In particular, although restrictions about household mixing, and the closure of schools and childcare services had created huge difficulties for parents, there was evidence of both men and women adapting their work patterns to accommodate this challenge – and appreciating how unbalanced their previous lives had been.
  • Changed aspirations: a substantial proportion of respondents said their career plans, values and aspirations had been affected by their experiences during the pandemic and they had re-evaluated what was important to them in their career.  This was reported by more than half who had first degrees in Creative Arts, non-STEM academically focussed subjects and, more surprisingly, Law, Economics and Management, and also by those working in Marketed Services.
Cheryl Lloyd, Education Programme Head at the Nuffield Foundation, said:"This study provides rich evidence about the experiences of mid-career graduates during the pandemic, including the financial and employer support they have received and how this has varied by sector, occupation, job stability and key worker status.“The report also sets out recommendations that could promote fairness and better support all employees, including extending gender pay gap reporting to smaller organisations and introducing rigorous procedures around flexible working arrangements."Gender Pay GapCommenting on the gender pay gap findings, Professor Peter Elias said:“We were surprised to discover that the gender pay gap for these mid-career graduates (the difference in average annual pay for between men and women) remains almost the same as the gap measured for similar national sample of mid-career graduates in 2002.  We are urging employers to tackle the gender pay gap and take care to ensure that increased reliance on remote working doesn’t discriminate against certain categories of employee.”Sources: Elias, P. and K. Purcell (2004) ‘The earnings of graduates in their early careers’, Futuretrack Research Paper No.5, Warwick Institute for Employment research, and Elias, P., K. Purcell, G. Atfield, E. Kispeter, R. Day and S. Poole (2021) ‘Ten years on – life after graduation’, Warwick Institute for Employment Research.Reflecting further on the role of employers, Professor Purcell commented:“Looking at the long-term impact of the pandemic on the rise of remote working, the pandemic has accelerated changes that were already beginning to be made by many organisations and demonstrated in one year the feasibility of changes that might otherwise have taken considerably longer to gain wide acceptance.“Many graduates commented positively on employers who had reacted proactively, positively, and reassuringly to preserve their highly qualified labour, but there was disenchantment among those where their organisations had simply made use of furlough money and waited for things to get better, with little planning for the post pandemic period.”Recommendations The report concludes with recommendations to policymakers and employers in five priority areas intended to address not just the problems identified by the study but the probable future labour market issues that graduates will face.  These are (i) addressing the gender pay gap, (ii) facilitating flexible working arrangements, (iii) dealing with the impact of the Covid-19 restrictions and requirements on employee welfare, (iv) the need for more comprehensive and timely information about higher education outcomes, and (v) taking account of increasing fragmentation of jobs and employment precarity.

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