Navigating the future: key trends in graduate recruitment

Stephen Isherwood, joint CEO of the Institute of Student Employers (ISE), explores three of the big trends in graduate recruitment

Skills are high on employers' agendas, and not just because the incoming government is forming a new agency to oversee skills development, Skills England. In a world where tech changes the nature of what people do for a living at a faster pace, the skills that students need to develop are those that they can build a career on.

AI can help employees become on average 66% more productive.1 That is a big number - the UK economy only grew by 0.1% in 2023 - so it's no surprise that employers are investing heavily in AI tools. AI that can draft legal contracts, write software code, crunch large amounts of data, and create a PowerPoint presentation is starting to transform the work that students will do when they enter the workplace.

As graduates progress through education and into work, their ability to learn, manage their development, and gain new skills will help equip them for a longer working life than previous generations experienced.

At the ISE we predict that demographic shifts and technology changes are increasing the pace at which employees' skills need to develop and will lead employers to focus on retention through upskilling and reskilling programmes.2

The AI job applicant

AI is not only changing the work graduates will be doing, it is also reshaping recruitment. In the ISE Student Recruitment Survey 2024, we found that that 21% of employers were using AI in selection and assessment, a considerable increase from 9% in 2022.3 As 81% said that AI increased speed and efficiency in the recruitment process, we expect more and more employers to adopt AI tools to recruit graduates.

As students can use AI in their academic work, so they can use it to apply for jobs. Some use is benign, e.g. using AI to help draft a CV; some of it akin to cheating, e.g. using AI to answer interview questions. In the way that AI can mask a student's true academic ability, AI can mask a student's suitability for a given career.

AI is also helping fuel an increase in the number of applications students make. Our survey also showed that competition for graduate jobs has reached a record high with the average employer receiving 140 applications per graduate job, a 59% increase on the previous year - the highest number of applications per job recorded in the three decades since the ISE began collecting the data in 1991.4

AI can be a useful tool to help enhance applications, but students must be authentic in their job applications to avoid too many rejection emails.

Graduate vacancies still outnumber apprentice vacancies

Our survey found that graduate vacancies have grown 4% in the last year, compared to 6% the previous year. Apprentice/school-leaver vacancies are growing at a faster rate, 9% over the last year, but amongst ISE members, graduate vacancies outnumber apprentice/school-leaver vacancies by over three-to-one.

Neither have degree apprenticeships revolutionised vocational education for young people - only three to four thousand eighteen-year-olds started them in 2022/23.5 Of all apprentice starts the latest government data showed that only 25% (70,020) were under 19.6

This partly explains why the government has said they intend to rebalance spending towards support for 16-25-year-olds - although we still have to learn how this will work in practice. The work of Skills England will also incorporate the role of IFATE, so we expect to see changes through 2025.

The current jobs market is tough for students. Employers forecast just 1% growth over the next year as economic pressures reduce expected hiring numbers. Whilst not a contraction in the number of opportunities, students are going to have to apply their job hunting skills to greater effect in the current jobs market.

But we believe the future career landscape is a positive one for students. As the pace of change in work quickens, the long-term impact of demographic changes and higher skills requirements mean that the UK will need to increase its collective investment in the development of students.

This article first appeared in the 2024/24 edition of What do graduates do?

Notes

1. AI Improves Employee Productivity by 66%, Nielsen Norman Group, 2023.
2. What's the reality of skills based hiring and development?, Institute of Student Employers, 2024.
3. ISE Recruitment Survey 2024, Institute of Student Employers, 2024.
4. 5 trends you need to know from ISE's Recruitment Survey 2024, Institute of Student Employers, 2024.
5. Degree apprenticeships, UK Parliament, 2024.
6. Apprenticeships, GOV.UK, 2024.

Written by

Stephen Isherwood

Joint CEO

Institute of Student Employers