Has graduate recruitment returned to 'normal'?

Stephen Isherwood, CEO of the Institute of Student Employers (ISE), writes that the graduate jobs market has recovered - with online recruitment and remote working here to stay

Graduate jobs bounced back in 2021/22 from the COVID-19 suppressed market of 2020. ISE data shows graduate vacancies increased by 9% in 2021 and another 17% in 2022.1 Graduates whose university experience was marred by lockdowns found employers keen to catch-up on hiring and a labour market experiencing widespread shortages.

Not to say that graduates found the job hunting experience easy. Applications per vacancy dropped by 31% as employers returned to the market, but graduates still competed with an average of 61 other applicants per job.2 The graduate market remained, as always, competitive.

Employers in the engineering and energy sectors, along with finance and professional firms, increased their vacancies the most, by over a third on average. Charity and public sector employers reported one of the lowest rates of increase at 7%, but these employers were the least likely to reduce hiring during the pandemic.

Employers also told us they had to work harder to hire graduates, particularly in the charity and public sector where only 75% of graduates made a job offer accepted it. And just over a tenth of graduates who accepted a job offer later reneged. This caused a headache for employers when graduates pulled out just before joining as the roles then became impossible to backfill. More and more employers now 'over' recruit so they aren't left with unfilled vacancies.

Online recruitment 'aids diversity efforts'

While the jobs market returned to normal, hiring practices didn’t. Graduates had to contend with online interviews, tests and assessment centres (mostly, they still do). Employers find the online process more efficient in terms of time and office space used - they also report that students appreciate the time saved.

Anecdotally, many employers found that online recruitment practices also aided their diversity efforts, perhaps negating the bias that can creep in based on how a candidates presents themselves. The continued emphasis on diversity combined with an increased use of testing, also meant that the number of employers who use a 2.1 degree classification to screen out candidates fell below half to 48% for the first time.3

Remote working a 'permanent outcome'

As the move to online recruitment seems a permanent outcome of the pandemic, so does remote working. Only 5% of employers expected their graduate hires to be fully office based and nearly a quarter expect them to work from home for at least three days per week.4 We've yet to see a change in the skills profile employers hire to, but long-term changes to the way graduates work may cause employers to focus on hybrid working and collaboration skills.

One area where this cohort of graduates will struggle more than most is the cost of living crisis. Average ISE member graduate salaries did increase by 1.2% in 2022, but at a far lower rate than inflation.5 This reflects a trend we’ve seen since the financial crisis of 2008 where many companies focus pay increases on existing employees. This trend may prove unsustainable as competition for graduate talent increases over the coming decade.

While all employer graduate hiring practices may not have returned to pre-COVID norms, we expect ISE employers to remain committed to their graduate hires. ISE graduate employers' comments on their increasing need for highly skilled employees echo the findings of Universities UK's recent report, 'Jobs of the future'.6 ISE employers remain positive about the quality of their graduate hires: 88% tell us they are 'almost always' or 'often' able to recruit the quality of graduate hires that they need.

Notes

1. 5 biggest trends in student recruitment in 2022, ISE, 2022.
2. How are employers recruiting graduates in 2022?, ISE, 2022.
3. 2:1 degrees and personality tests lose favour, ISE, 2022.
4. How hybrid working is impacting development programmes, ISE, 2023.
5. What is the average graduate salary?, ISE, 2023.
6. Jobs of the future, Universities UK, 2023.

Written by

Stephen Isherwood

Joint CEO

Institute of Student Employers