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Weekly media briefing -14 October

This week’s topics:

  • Research findings: employers’ views on grades, skills, the curriculum, and more 

  • PwC comment on ONS September labour market data

  • PwC comment on ONS August GDP and trade data

  • Consumer sentiment survey reveals slight decline in optimism

Employer survey - does the UK education system equip young people for work?

PwC research has found employers have divided opinions on the UK education system but are keen to collaborate on curriculums. Key findings from the survey of 150 employers are:

  • 70% say there is too much focus on grades in secondary education; 86% rate A-levels as important in their recruitment process

  • Half (50%) say that the secondary education system and curriculum provide young people with the skills they need to be prepared for work. Slightly more - 54% - back the higher education system

  • Lack of preparation for the world of work (60%), personal skills such as time management (51%), and communication skills (45%) rank among the biggest challenges for employers recruiting direct from schools, colleges, or universities

  • Encouragingly, just 11% say young people’s digital and tech skills aren’t up to scratch

  • Over three quarters (78%) agree there should be more input from local government and businesses in the curriculum to help address regional skills requirements and/or shortages.

For additional data, see PwC Media Centre

Laura Hinton, Chief People Officer at PwC UK, explains the firm’s position:

  • The education system undoubtedly gives students an important foundation for the world of work - it's not just about the grades but the broader experience of learning, participating, and meeting deadlines.

  • We focus our entry assessment on future potential rather than past performance, which can be unduly influenced by school and background. We're looking for problem solvers with curiosity, and can assess this partly through psychometric tests. For graduates we don't look at GCSEs or A-levels, but we do for our school leaver programme where there are fewer alternative ways to judge ability.  But we do contextualise results and accept lower grades from those who attend disadvantaged schools.

  • Schools and colleges shouldn't have to second guess the skills that employers need; the onus should partly be on employers to help shape the curriculum. We've seen huge benefits from working with universities on specific programmes, such as our technology degree apprenticeships.

Caitroina McCusker, Education Leader at PwC UK, said: 

  • Equipping school, college, and university leavers with the skills they need for future jobs is critical to improving productivity and delivering inclusive growth across the UK. As we look beyond the pandemic and towards a recovery in education in particular, it's hugely important we draw on the broader opportunity to reform and reimagine education services.  

  • Educators and employers must work together to bridge the gap between education and the world of work, and employers have an important role to play in providing practical pathways into the workforce - particularly amid uncertainty about exactly what the future of work will look like. 

  • This can take many different forms, from investment in apprenticeship programmes and partnering with local schools through to curriculum development. It’s equally vital that educators and employers bring in a broader ecosystem of support, thinking about mental health and wellbeing needs, and how they can address digital poverty and social disadvantages. The need for a more joined up approach has never been so important.  

  • In practice, this could be anything from the public sector and business conducting skills planning together on the basis of local labour market opportunities and challenges, to employers co-developing programmes with education providers.


PwC comment on ONS September data on labour market

Rob Clarry, economist at PwC UK, comments on September’s ONS labour market data

  • September marked another positive month for the UK labour market. The number of payrolled employees reached a record high of over 29 million, exceeding the pre-pandemic level for the first time. And demand for employees remained elevated with a record 1.2 million job vacancies open.  

  • However, with the furlough scheme winding down at the end of September, the labour market now faces its sternest test since the start of the pandemic. We expect to see a period of adjustment as workers made unemployed either enter sectors experiencing high demand for labour, such as transport and construction, or retrain to pursue new vocations.

  • The gradual increase in the supply of available workers should also soften wage growth over the coming months, as people move into the sectors which are running hot. This could provide some welcome respite for the transport sector, which recorded a 56% increase in the number of vacancies open over the last three months.

PwC comment on ONS August data on GDP & trade

Jonathan Gillham, chief economist at PwC UK, comments on ONS August data on GDP and trade:

  • The economy bounced back further in August with 0.4% GDP growth driven mainly by a major boost to the tourism and leisure sector. August was the first full month of no COVID restrictions. 

  • However, key sectors of the economy are still struggling notably retail, construction (which has fallen for three of the last four months) and many sectors are being hit hard by supply chain issues. High gas prices are also damaging the economy and there are still issues relating to self isolation that are particularly affecting the parts of the economy that sell goods overseas. If the effects of inflation are stripped out the trade deficit worsened by £1.6 billion over the last three months.

  • Acute labour shortages are being reported in professions such as welders, events staff, industrial workers, automotive workers, engineers, upholsterers, builders, care workers, factory workers, cleaners, accountants, chefs, and security staff. But also, many people are still searching for work - available skilled workers are not aligned with the skills required for the vacancies that businesses are carrying. 

  • Coupled with the spectre of permanent rather than temporary inflation, there are mounting risks that could jeopardise the pace at which the UK economy can recover from the COVID crisis.

 

Consumer sentiment survey reveals slight decline in optimism

PwC’s latest consumer sentiment survey was conducted between 17-20 September 2021 and includes responses from a nationally representative sample of 2,070 adults. It has found that:

  • Consumer confidence has returned to pre-pandemic levels, following record highs earlier in the year, as inflation, concern over supply chains and out-of-stocks cause a slight decline in optimism.
  • Overall at +3 on the index, sentiment remains positive meaning that more respondents thought they would be better off in the next 12 months than worse off.
  • Sentiment is now at the same level we saw in December 2019, the last survey before the pandemic. And while it’s at the lowest level we’ve seen in 2021, confidence is still higher than at any point between 2016-19, following the EU referendum.

 

Lisa Hooker, consumer markets lead at PwC UK, said:

 

  • It’s little surprise that consumer sentiment has not maintained the record levels we saw earlier in the year. But with confidence stronger than last year - and for most of the post-referendum period - it’s not all bad news.
  • But the general positivity must come with a warning. The inflationary factors that have triggered the decline in sentiment are unlikely to ease in the short term, particularly for grocery, utilities and petrol. Combined with the current problems facing those industries in relation to supply, we’re beginning to see it affecting consumers’ day-to-day lives and, in turn, sentiment and demand.
  • For both retail and leisure sectors, the timing couldn’t be worse. After the disappointment of last year, retailers and hospitality operators desperately need a strong run up to Christmas. Even without lockdowns, they will need to convince consumers to part with savings to have any hope of recovering to pre-pandemic levels.
  • For many, the coming weeks will be make or break: can the driver shortages be addressed and supply chain pressures eased? When will the crisis at the petrol pumps be resolved? And will higher energy prices cause more widespread inflationary pressures and a reluctance from consumers to spend?

For more information on the survey, please see PwC Media Centre.

Something to listen to: 

In the latest PwC Innovation in Energy podcast, Claire Reid and Colin Smith of PwC, Lawrence Slade, Global Infrastructure Investors Association and Jaroslava Korpanec, Allianz Capital Partners explore what is needed from COP26 to bridge the investment gap and deliver the outcomes the UK needs to become a Net Zero society. Listen here

Something to read

Esports enjoyed significant revenue growth during 2020, but is a new business model needed to propel the sector forward? PwC looks in detail at esports and its relationship with the wider sector here

Something to watch:

Health and fitness companies are creating stronger, deeper relationships with customers through innovation and data. Cat McCusker, Partner, Responsible Growth joins this panel, in collaboration with Sky News, to explore how all businesses can use these lessons to drive responsible growth.

Contact us

David Bowden

Manager, Corporate Affairs, PwC United Kingdom

Tel: +44 (0)7483 365049

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