COST OF LIVING 

 

 

 

 

Young people starting out in the labour market in London might be expected to be in a favourable position with it’s diverse labour market and opportunities.

 

Even young school leavers with no or low qualifications should benefit from living in more successful urban labour markets. But in the context of London these potential advantages do not appear to have translated into better labour market outcomes for young people. In the first instance, London has consistently registered higher than average rates of youth unemployment compared to the UK . Meanwhile, the employment chances of people with low-skills in Inner London have been shown to be lower than those for similar people living elsewhere in the UK. Young people with lower level skills have poorer employment prospects.

 

“One reason for this is that people moving to London may be willing to accept lower wage jobs in the short-term as they establish themselves or develop other skills, reducing the number of “entry-level” jobs available to young people”

 

Who struggles to enter work in London? Each year, ambitious young people move to London from all around the world. They join a large, young and relatively highly skilled resident population. There are certainly advantages to working in London, particularly for young, mobile and highly ambitious people for whom the city can serve as an ‘escalator’ enabling them to progress further and faster than their peers elsewhere But not everyone benefits from living in London. Some newcomers and graduated will struggle to find work, perhaps choosing to take-up lower-skilled work instead. Recent analysis suggests that young people in London were more than twice as likely to be stuck in low-pay as other low paid Londoners, at least in the short-term.

 

 

Young people and competition for jobs in London Though there has been strong employment growth in London in recent years, the number of jobs has not kept pace with the resident working-age population, let alone the overall number of people that seek work in London. In one year alone the population increased by 950,000 new comers { job seekers) whilst the number of jobs increased by only 229,000 Figures like these give an indication of the relative mismatch between supply and demand and have raised concern about the level of competition for jobs in London The level of competition for jobs is driven by a number of factors.

 

Firstly, London is a global city which attracts skilled and mobile workers from other parts of the UK and overseas. There is evidence to suggest that new migrants may accept jobs which are below their skill level putting pressure on the lower end of the labour market. Secondly, the overall number of jobs has not kept pace with the working-age population. This means that employers are able to be more selective for some roles. This puts young people, especially those with limited work experience and lower qualifications, at a disadvantage. This chapter presents some indicators of the level of competition for jobs and considers how the employment prospects of young people may be shaped by the wider dynamics of the labour market.

 

 

Labour supply and demand The change in the number of working-age people in London is linked to migration, with people moving to London to seek employment from abroad and elsewhere in the UK. London attracts large numbers of workers from abroad, and increasing numbers of people are also moving to London from other areas in the UK (more than 200,000 new Migrants each year. It is important to recognise that there are not a finite number of jobs in London. The city benefits from the skilled workers that live in the area, many of whom undertake highly productive work, boosting the economy and increasing the supply of jobs – for instance through increasing demand for other services such as hairdressers, restaurants, retail, child care, and dental care. Yet it may be that the clustering of immigrants and graduates in London has impacted on the employment prospects of young people, and particularly those that have lower skills. With demand for labour in London skewed toward higher skilled positions relative to the rest of the UK, previous analysis has suggested that the low-skilled are at a particular disadvantage in London.

Clearly, not all jobseekers are in competition with each other. 

 

The ratio of jobs to people The number of jobs has not kept pace with the resident working-age population and whilst the actual level of competition for a job will depend on a number of factors, broad analysis of the number of jobs and workers can give an indication. The ratio of people to jobs varied significantly across London on this indicator, with many boroughs registering more than 3 people per job. Many of the highest rates of youth unemployment are also found in the outer East of the city.., This is likely to have an impact on the job prospects of lower-skilled young people, with higher skilled workers ‘bumping down’ in the labour market and taking up lower-skilled employment. These indicators suggest that competition for jobs is high, and varies significantly across London.

 

Of course the actual level of competition will depend on the role. But given the large number of potential workers relative to the number of jobs, employers are likely to be able to exercise a greater degree of selection for some roles. Furthermore, higher-skilled people arriving in London may be willing to take-up lower-skilled jobs in the short-term whilst they look for other employment.

 

 

Bumping down in the labour market There is a longer term trend toward graduates being employed in lower skilled occupations as well as a shorter term recessionary effect whereby graduates have taken up lower wage, lower skilled work – the concept of ‘bumping down’. This section reviews the impact that this has had on competition for work in the city and the implications for the employment prospects of lower skilled young people. The employment prospects of young people in London may be particularly affected by these trends in light of the high skill profile of the working-age population in London as well as the fact that the city attracts many people from elsewhere in the UK as well as abroad (many of whom will be highly educated).

 

Young graduates have seen their employment rates dip and so they may have become more amenable to undertaking low-skilled, low-paid work. The graduate substitution effect suggests that where graduates find it difficult to secure employment commensurate with their education they may take up lower-skilled employment. Meanwhile, higher-skilled people arriving in the UK may struggle to find a job that matches their qualifications and instead take up lower-skilled work, a process described as ‘occupational downgrading’. Data on the labour market experiences of graduates and migrants supports the idea of occupational downgrading for these groups. First, at a national-level an increasing proportion of recent graduates are employed in non-graduate roles and lower-skilled occupations.

 

 

Understanding Employers
While previous research has shown that 96% of employers would choose mindset over skill set when recruiting,
60% of young people placed skills ahead of mindset.UK...
...so we decided to an experiment to better understand  

 

The Job-Seeking Experiment 

 

36 FICTIONAL CANDIDATES
739 JOB APPLICATIONS
see outcome below

 

 

 

THE FICTIONAL CANDIDATES

The fictional candidates were intended to be relatively strong candidates for jobs that nominally required limited education and skills. The aim was to limit the number of cases in which none of our three applicants was successful, which would hinder our investigation of variation in results between candidates, and to provide a clear contrast and limiting case for more disadvantaged young jobseekers.

Employers had indicated that qualifications were generally not crucial to selection. Nonetheless, 44 per cent of the experiment applicants had five to ten GCSEs. These included applicants to security, kitchen hand 36 young people looking for work and cleaner posts. Thirty-four per cent of applicants had five to nine GCSEs and a vocational qualification relevant to the post they were applying for. These were mainly applicants for accounts clerk, office admin and chef jobs. Twenty per cent of the total applicants (mainly applicants for accounts clerk and office admin jobs) had six to ten GCSEs and two or three A levels.

In addition, all of the applicants had continual work and relevant records since they had completed education and some were given Saturday job experience before this. Thus, although they were aged 22–24, they had between four and nine years’ work experience. All were given clean driving licences and cars for jobs with unsocial hours. None disclosed criminal records or any indication of caring responsibilities. 

 

THE JOBS APPLIED FOR  (739 JOBS)

 

We searched for jobs in our seven types using  key websites including www.gumtree.com. We excluded those that appeared to demand substantial education, skills or experience and those that did not fit the nature of the experiment: for which applications could be made only face to face or over the phone and where the application had to be sent to a regional or national office and it appeared that at least part of the decision was made outside the local labour market.

We did not exclude any on grounds of criteria that many real jobseekers might have to or want to apply: location within the labour market and accessibility, total hours available, days and hours of work and pay. We applied for 739 jobs 

 

Box 1: Selected job titles of jobs applied to in the experiment •

Office trainee, receptionist, secretary, clerical assistant, administrator, office clerk, business administrator, data entry assistant • Sales assistant, shop floor sales, shop supervisor, legal cashier, estate agent assistant, delivery/sales assistant • Grill chef, chef, commis chef, trainee chef, chef de partie, pizza chef, cook, breakfast chef • Kitchen hand, kitchen porter, catering assistant, food prep assistant, pot washer, fish fryer • Cleaner, cleaner driver, oven cleaning assistant, housekeeper, room attendant • Book keeper, accounts producer, accounts assistant, accounts administrator, sales controller • Security operative, security officer
 

  • Seventy-eight per cent of the jobs with wage data available paid  £7 per hour 
  • Fifty-four per cent paid at the minimum wage level
  • Minimum wage pay was found across all of our job categories and all our local labour markets. However, it was most common for kitchen hand, sales and cleaning jobs and also for office assistant jobs
  • Only a handful of the jobs stated pay close to, or at the level of national median pay rate
  • None stated above average pay 
  • We encountered four employers offering pay below the standard national minimum wage
  • Altogether 76 per cent of jobs we applied to did not offer a traditional full-time (, ‘9am–5pm’ work schedule) 
  • A large proportion were part-time, including office admin and accounts posts
  • Others offered full-time hours but included early morning work (especially for cleaning) or evening or night work (especially for kitchen hand, chef and security jobs). 

This largely reflects the supply of jobs available for applicants with school leaver experience and or graduates, with relatively unattractive pay, conditions and security reduce the marginal benefit of getting a job.
 

Experiences of jobseekers

What happens when candidates are well qualified and suitably experienced and are applying full time for work? In the experiment conducted for this research, seven out of ten applications – and these were good applications for the vacancies in question – heard nothing back. No feedback is the norm. This is very discouraging for jobseekers who have spent time and effort on preparing their applications.

Nevertheless, the experiment also revealed that good applications do succeed eventually. Typically, the fictional candidates received a positive response (such as a request for interview or more information) to their fourth application, although experiences even for these candidates varied from success on the first attempt to having to make over 50 applications before a positive response was received.
 

 

Competition for vacancies

This data suggests that looking for some kinds of work will generate many more vacancies to apply for than looking for others and that jobseekers would be well advised to broaden their searches early on, as well as having a good understanding of where employers are advertising for different kinds of work. However, the chance of being successful will also depend on the extent of competition. that competition

Typically it will look like like this; 

  • Office Admin Assistant
  • Permanent, full-time
  • £20,000 - £28,000 per annum
  • 100+ applications
  • Require skilled / experienced minimum 4 years

OR 

 

  • Temporary Weekend Office Administrator
  • Temporary, part-time
  • £9.50 per hour
  • 100+ applications
  • Experience not advertised, hence the high number of applications 

 

Results of the experiment for unqualified candidates (Less than two years work experience 

  • Three applicants were offered a post right away
  • However, most first-stage positive responses did not lead directly or with any certainty to job offers
  • Thirteen per cent of applicants were invited to meet employers
  • Two per cent of applicants were asked for further information for example what days and hours they might be able to work
  • Thirteen per cent of applications received one of a range of negative responses (as opposed to no feedback), with the most common being an acknowledgement but no further correspondence (4 per cent of all applications) and an outright decline
  • Two per cent of applications were declined, but employers stated that the applicant details were ‘put on file’. Only one of these applicants was contacted again by employers during the course of the experiment, so this response appears to operate more as a courtesy than as offering any real chance of future employment 
  • One per cent of all applications were declined, with employers indicating that the post had already been filled although in some of these cases applications were made on the same day that the vacancy advert first appeared

 

Our contacts with employers in the experiment and in interviews suggested that first-stage positive responses divided into two kinds

  • For office admin, accounts clerk, sales and chef posts, a positive response appeared to imply an invitation to a planned, formal interview at which the candidates would be assessed against formal criteria and competing applicants
  • For kitchen hand and cleaner posts, a positive response appeared to imply an informal meeting arranged at short notice which would be very likely to lead to a job trial or a job offer, in both cases with a further stage of on-the-job assessment before the applicant became settle

Thus, fewer than one in five of the experimental candidates got through the first round of selection for jobs that required limited skills and experience and that generally paid close to the minimum wage. Young people with fewer labour market advantages would be likely to experience lower, possibly much lower, first-stage positive response rates when applying for the same sorts of jobs. 

 

Qualified Candidates in the experiment had a much better experience  
 

The experiment suggests that more qualified candidates will achieve first stage positive responses from employers with relatively high frequency (about one in five times, although these will not all lead to jobs). However, at the same time, a very high proportion of applications, even from such candidates, receive no response at all. Sixty-nine per cent of applications received no response at all from the employer .Among the well-qualified and experienced candidates in the experiment, median experiences were a little better than this, although even among these candidates there were cases of people applying for up to 50 vacancies before getting a positive response.

 

 

 

 

 
Working holiday Visa Experiment And Outcome 

10 FICTIONAL CANDIDATES
498 JOB APPLICATIONS
see outcome below

 

 

THE FICTIONAL CANDIDATES

 

The fictional candidates were typical 18-24 year old Australian and New Zealanders, some were very strong candidates and others stepped right our of the class onto a plane. The aim was establish the magic cross were experience , age and experience, nationality met making for a The Diamond Candidate recruiters are always looking for. . Australasian and Kiwis have for decides been renowned as the for their high entry and friendly happy people. Candidates in this experiment have been in London for only one week. Candidates were booked into a hostel in Central London and would move once job was secured. Candidates motivation are split between career development and travel frequently

 

Box 2: Selected job titles of jobs applied to in the experiment •

Office admin, receptionist, secretary, clerical assistant, administrator, office clerk, business administrator, data entry assistant • Sales assistant, shop floor sales, shop supervisor, legal cashier, estate agent assistant, delivery/sales assistant • Grill chef, chef, commis chef, trainee chef, chef de partie, pizza chef, cook, breakfast chef • Kitchen hand, kitchen porter, catering assistant, food prep assistant, pot washer, fish fryer • Cleaner, cleaner driver, oven cleaning assistant, housekeeper, room attendant • Book keeper, accounts producer, accounts assistant, accounts administrator, sales controller, live in pub  staff,  events and festival

 

The jobs applied for 

We searched for jobs in our seven types using all major online job boards including, seek, indeed and monster.com .uk, including www.gumtree.com. We excluded those that appeared to demand substantial education, skills or experience and those that did not fit the nature of the experiment: for which applications could be made only face to face or over the phone and where the application had to be sent to a regional or national office and it appeared that at least part of the decision was made outside the local labour market. We did not exclude any on grounds of criteria that many real job seekers might have to or want to apply: location,  total hours available, days and hours of work and pay . As part of the experiment, We applied for 498  jobs

 

Office Admin jobs in London (653

  •  Permanent (516)
  •  Temporary (85)
  •  Contract (52)
  •  Full-time (630)
  •  Part-time (32)
Out of 653 admin jobs found only 11 were suitable for our working holiday candidates. 516 jobs were for full time permanent staff admin staff not suitable for a working visa.  One candidate received and immediate interview request for an interview, the legal secretory CV, the CV;s  with less than two year admin experiences did not. 
 
 
Receptionist jobs in London (411)
  • Permanent (307)
  • Temporary (90)
  • Contract (14)
  • Full-time (387)
  • Part-time (38)
Out of 411 admin jobs found only 13 were suitable for our working holiday candidates. 307 jobs were for full time permanent staff admin staff 
 
 
 
Data Entry jobs in London 434
  • Permanent (316)
  • Temporary (73)
  • Contract (45)
  • Full-time (422)
  • Part-time (15)
Out of 411 admin jobs found only 2 we showing as temp part time
Paid well £12.00 - £15.00 per hour however the ratio seems 1:100 

 

Sales Assistant jobs in London 2,049 
  • Permanent (1,844)
  • Temporary (135)
  • Contract (70)
  • Full-time (1,952)
  • Part-time (143)
Out of 2029 admin jobs found only 26 left for temp/ part time / contract
Paid OK, £7.00 - £12.00 per hour however the ratio seems 1:20
 
 
 
Cleaner jobs in London (156) 
  • Permanent (109)
  • Temporary (39)
  • Contract (8)
  • Full-time (134)
  • Part-time (32)
Out of 2029 admin jobs found only 26 left for temp/ part time / contract
Rate offered averaged on  £7.50 per hour with ratios 1:00 for inner London,  dropping down to 1: 10 in Zone 5 

 

Employment barriers encountered by the working holiday candidates 

  • The primary barrier to employment is a lack of experience, with 63% of our candidate citing it as a factor
  • The next main barriers are too much competition in the labour market (51%) and a lack of suitable opportunities (29%)
  • While 58% of 21-25 year olds without any qualifications are ‘very optimistic’ about finding work in the next three months, only 29% of graduates were
  • Most of our recruiter survey suggested a top reason for an employment barrier was the lack of UK companies they recognized on the CV, automatic bin 
  • Another top factor was the lack of UK references to accompany the CV, again automatic bin
  • Candidate applying for role which were customer facing received negative feedback out right rejections (75%), more UK experience required
  • Only a 2% reposes was archived on CV with less than 24 months admin experience, non of which would resulted in an offer
  • Our recruiter contacts confirmed multiple CV were blacklisted for " over exposed" to many recruiters and job board had it registered  

 

Graduates mindset and employment barrier 

Reed and Stoltz asked thousands of top employers which they would rather: someone with the desired mindset who lacks the complete skill set for the job, or someone with the complete skill set who lacks the desired mindset. These findings are not surprising to many of our Employment Advisers, who report frequently dealing with young people with limited understanding of the key attributes employers are seeking.  Many of our Advisers told said the wrong mindset is the biggest barrier to people finding work, because they lack the drive, resilience and determination to succeed in today’s job market. Improving mindset is the first - and most challenging - step to employment. 

They say that graduates often have the hardest mindset to change, as they leave university with unrealistic job goals. While qualifications are important, we are concerned that they have become a proxy for skills in the minds of many young people and those formulating education policy.

 

Experiences of jobseekers 

Most working holiday makers upon arrival we interviewed wanted work and had taken steps to find it. They understood employers’ requirements, and were, in general, realistic about the types of jobs and wages they could hope to attain. More confident jobseekers also made speculative applications, by email, by post or in person.

Search schedules and the amount of time spent searching and applying for jobs varied markedly, from the intensive to the episodic. Some jobseekers fired off applications relatively quickly, while others spent more time searching for and researching job opportunities, and tailoring their applications.
Most young jobseekers did not appear to make a special effort to apply to jobs soon after they had been advertised. New comers may not of realise the likely length of unemployment implied by sporadic application, high rates of competition and low positive response rates.
 

 

 

 

TOP INDUSTIRES AND MITGRANTS HIRED  

 

 

Migrants come to London for a variety of reasons About half of all EU migrants initially move to London for employment and approximately 15% come to London to study. Just over a quarter of EU migrants come to London as a dependent of either a UK or foreign citizen. Non-EU migrants have slightly different reasons for coming to London. Approximately 20% come for work, 20% to study and just under half come as the dependent of a UK or foreign citizen

Migrant workers in the UK make up 10.9% of the total workforce, but according to the Migration Observatory, that number increases dramatically in certain key sectors. Some 31% of cleaning and household staff, 30% of food preparation and hospitality workers, and 26% of health professionals are foreign-born.

 

CONSTRUCTION

Construction is historically a highly cyclical sector, with significant volatility. However, since 2009, the construction industry in London has steadily increased its quarterly output from £5bn to £8bn, with much of this growth arising as part of the recovery from the credit crunch in 2013 onwards.

Facing Facts:

The impact of migrants on London, its workforce and its economy 

  • The construction industry in London employs approximately 300,000 people, of whom 50% are UK born, 30% are born in the EU and 20% are born outside of the EU.
  • The majority of workers in this sector are lower and mid-skilled.
  • Demand for workers in the sector looks set to grow as London addresses its historic under-supply of homes and infrastructure. However, the industry has been unable to meet this demand with ‘home-grown’ workers and so has increasingly recruited migrant workers to fill the gaps.
  • It is estimated that approximately 60,000 more construction workers are needed in London and the South East as of 2017.
  • The UK-born construction workforce is aging, with just under a fifth due to retire within the next five years. Without migrant workers to make up the shortfall, London would be facing significant skills shortages in the construction industry, as the supply of younger workers – via channels such as apprenticeships – cannot meet demand at the rate needed.

 

Financial Services  London has been long recognised as a global hub in financial services, and faces stiff competition from similar centres such as New York, Singapore and Hong Kong. The sector covers a diverse range of skilled services, such as banking, insurance, securities trading and fund management. Financial Services employs nearly 300,000 workers in London and accounts for just over one sixth of the total London economy. Approximately 60% of the sector’s workforce in London are UK-born, 25% are born outside of the EU and 15% born within the EU. This breakdown of workforce has remained relatively static over the last ten years

 

Hospitality Approximately 250,000 people (typically lower-skilled) are employed in the Hospitality Sector in London, which has a GVA of more than £11bn per annum. Around 70% of London’s hospitality workforce (175,000) are born outside the UK. At 100,000, non-EU workers are the biggest group within the sector, with EU workers numbering just over 75,000. UK-born workers are in the minority in this sector in London, numbering just under 75,000

 

Wholesale & Retail Wholesale & Retail is characterised by a young, flexible, lower-skilled workforce with a fifth of workers aged under 25 and a third working part-time. London’s workforce in this sector totals 250,000 – with 56% UK-born, 32% non EU-born and 12% EU-born. On average, London’s Wholesale and Retail workforce has grown by 9,000 workers per year – 3,800 of whom were UK-born workers, 1,800 EU-born workers and 3,300 non-EU-born workers

 



 


COST OF LIVING LONDON 

 

 

 

 

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