Last year was the year the scales tipped in the global job market. Layoffs in consulting and investment banking that started in early 2023 have continued to mount, and yet the wider jobs market has remained relatively resilient. Demand for engineers and healthcare professionals is reportedly increasing. Blue collar workers in industries such as mining, construction and manufacturing, whose skills graduates have often turned their noses up at, are also in demand.
The country is coming to terms with the fact that, for years, it has been reliant on workers trained in other countries. Couple this with the growing importance of artificial intelligence and its ability to replace white collar jobs and it’s perhaps conceivable to think of a world in which jobs that require technical skills become more important than the supposedly cerebral fields of banking and consulting.
Demand for workers with technical skills, rather than university degrees, is rising
This runs contrary to the dream sold to the many students who walk through university gates every Autumn. True, this isn’t the first time that the ‘graduate premium’ has been called into question: the Intergenerational Foundation concluded in 2016 that, apart from Oxbridge, medical and dentistry graduates, there was no guaranteed graduate earnings premium for people packing their bags for university. Now that demand for blue collar jobs, many of which do not require a university degree, seems to be holding up, this premium risks looking increasingly unicorn-like. The narrative that all good things come to those with an undergraduate degree no longer seems to hold much water.
All of this is a far cry away from the boom of 2021/2. As the pandemic retreated, the City came back with a roar. Global M&A volumes hit a record high in 2021, breaching the $5 trillion (£4 trillion) mark for the first time. As deal teams struggled to keep pace, hiring exploded: job ads jumped by 73 per cent and pay soared. Following the great Goldman Sachs mutiny of 2021, when junior bankers rebelled against the long days and poor pay, working hours became shorter, and the salaries? They had never been better.
How the times have changed. Now, friends studying at top business schools and universities are struggling to find a job. True, they could probably find a job in another sector, particularly those who studied STEM subjects. But they don’t want to; for them, it’s the City or nothing. Though UK business schools are yet to release their graduate destinations, the situation at Harvard might offer some clues. There, job placements are reportedly at their lowest levels in more than five years. Even at the end of 2022, 3.5 people were chasing each financial services job. Given the high fees charged for these schools, it appears that the contract of the well-paying job justifying the student debt has broken as the jobs in question fail to materialise.
It isn’t just young graduates who are struggling to get a foot in the door. On the whole, the number of consulting vacancies dropped by more than 80 per cent last year, with some blaming the over-hiring of 2022 coupled with a drop in demand for the cut-backs. Uncertainty, with unpredictable elections on either side of the Atlantic, a growing conflict in the Middle East and the ongoing war in Ukraine, is hardly helping companies to make expensive hiring decisions. In London, finance vacancies slumped by nearly 40 per cent in 2023. Recruitment, even for experienced candidates, is reportedly taking longer as people grow more reluctant to hire someone who sit around twiddling their thumbs if deals fail to materialise.
It’s true that a lot of this can be explained by boom and bust. However, as the wider jobs market proves relatively resilient, the ivory towers of the Square Mile seem more detached from reality than ever before. Given Britain’s historic underinvestment in technical skills – a gap which used to be plugged by EU migration – this could become part of a longer-term trend. It could even spell the end of the so-called ‘graduate premium’ for many.
A lot of the evidence for this is in the jobs data. In February 2024, KPMG found that only blue collar industries and engineering noted increases in the demand for short-term staff. Nursing, medical and care saw vacancies rise. The situation was particularly acute in 2021, when lorry drivers could reportedly pick up £78,000 a year – almost as much as the average barrister. Meanwhile, fruit and vegetable pickers were reportedly able to command £30 per hour. The Economic Research Institute estimates that blue collar salaries could increase by around 20 per cent by 2029.
As the academic year draws to a close, the once-assumed trajectory of securing a lucrative office job post-graduation is facing big challenges. Demand for workers with technical skills, rather than university degrees, is rising. Meanwhile, the foundations of the ‘graduate premium’ are looking increasingly shaky.
The revenge of the blue collar workers
31
7
08.05.2024
Last year was the year the scales tipped in the global job market. Layoffs in consulting and investment banking that started in early 2023 have continued to mount, and yet the wider jobs market has remained relatively resilient. Demand for engineers and healthcare professionals is reportedly increasing. Blue collar workers in industries such as mining, construction and manufacturing, whose skills graduates have often turned their noses up at, are also in demand.
The country is coming to terms with the fact that, for years, it has been reliant on workers trained in other countries. Couple this with the growing importance of artificial intelligence and its ability to replace white collar jobs and it’s perhaps conceivable to think of a world in which jobs that require technical skills become more important than the supposedly cerebral fields of banking and consulting.
Demand for workers with technical skills, rather than university degrees, is rising
This runs contrary to the dream sold to the many students who walk through university gates every Autumn. True, this isn’t the first time that the ‘graduate premium’ has been called into question: the Intergenerational Foundation concluded in 2016 that, apart from Oxbridge,........
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