Graduate recruitment through the pandemic

For What do graduates do?, Stephen Isherwood - chief executive at the Institute of Student Employers (ISE) - looks back at how graduate recruitment fared during the COVID-19 crisis

The graduate labour market broadly follows the fate of the economy, and while the circumstances of COVID were exceptional, the response of many graduate employers was not as severe as many expected. Graduate vacancies dropped by only 12% in 2019/20.

As large parts of the economy shut down, why didn't graduate vacancies fall further? Maybe because many recruitment targets were met when lockdown hit in March 2020, or maybe employers initially thought the pandemic would quickly pass. I'd like to think the real reason that business leaders resisted short-term pressures is they realised that to cut recruitment too far would hurt their organisations in the long run.

In previous economic downturns, employers who didn't deal effectively with the interns and graduates in their recruitment pipelines damaged their employer brands and caused resourcing difficulties that unnecessarily increased their cost base as the economy recovered. Many employers lost business when they couldn't find enough talent to meet the uplift in demand, or they paid a significant premium in the labour market to fill roles which in turn damaged their profitability.

Unless a business was in a hard-hit sector such as retail or travel, leaders minimised the negative impact to the students in their pipeline to ensure they were able to grow again when the economic climate changed. Many of the graduates who joined organisations in 2020 are now coming to the end of their training programmes, often into junior management roles.

As the COVID crisis deepened, in some sectors hiring remained constant or even increased. Public sector vacancies actually grew by 4% in 2020. But other sectors did have to take significant action. Built environment vacancies few by 25% and retail/FMCG vacancies by 45%. In generalising about the graduate market, we can forget that in reality there are significant sector and regional variations.

Impact of online applications

The pandemic also impacted student recruitment. As employers moved the entirety of their selection process online, students were able to progress applications without the need to travel. With employers only able to use online channels to reach students, many expanded the range of universities they recruited from. Concerns about the availability of jobs and the decrease in vacancies drove up applications per vacancy, but so did a more accessible selection process.

Students in previous recessions have struggled to disentangle bleak news headlines from the realities of the jobs market (the ISE reported unfilled vacancies in 2009, the worst period in the financial crash). With recruitment levels now well above pre-pandemic levels and students returning to campus life and catching up on missed social experiences, it's no surprise that some employers are struggling to attract enough students.

The war in Ukraine, and the resultant economic fallout, may yet cause short term damage to the early talent labour market. But as the COVID crisis demonstrated, employers have a long-term need to recruit and retain graduates.

Written by

Stephen Isherwood

Joint CEO

Institute of Student Employers