From education to employment

Graduate recruitment suffers biggest UK fall since 2008 crisis, causing ‘worry’ for talent pipeline

The number of graduate jobs on offer has fallen by 12% in 2020 – the largest drop in graduate recruitment since the 2008/9 recession, with the majority of employers anticipating further decline next year, reports Institute of Student Employers (@IoSEorg). 

ISE Student Recruitment Survey 2020 reveals that this is the largest fall in graduate recruitment since 2008/9 when the market contracted by 25%. While patterns evident in the last financial crash are emerging, it is not straightforward repetition.

Mirroring 2008/9, some sectors have reduced hiring considerably while others such as the charitable and public sector has increased hiring (4%). Graduate jobs in retail and FMCG have seen the largest cut at 45%.

IT and engineering continue to struggle to source the talent they need. Nearly half (42%) of employers found it difficult to fill IT jobs in programming and development and 35% struggled to recruit engineers. Heavy competition and a lack of graduates with the necessary skills were the most common reasons.

The data also shows the significant increased competition for jobs as seen in 2008/9. This year employers received 14% more applications for graduate roles and 9% more for internships and placements. Applications for school and college leaver roles also increased – by 8%.

The nature of the pandemic has meant that employers have had to make significant, and unprecedented, adjustments to their student recruitment. As offices closed, employers moved attraction, selection and development as well as the delivery of internships online.

Many have been forced to significantly reduce internships and placement opportunities this year – 29% and 25% respectively – the largest drop since ISE started collecting this data in 2010. 

Employers also have a broader range of entry-level opportunities to manage due to the Apprenticeship Levy.

As a result the opportunities for school and college leavers (largely apprenticeships) have been relatively stable this year, increasing by 6%.

Similarly to graduate roles, employers found it difficult to recruit school and college leavers into IT programming as well as in more skilled trades. This was mainly due to the location of job opportunities and that school and college leavers find it difficult to travel or relocate to take them up.

Agata Nowakowska, AVP EMEA, Skillsoft

“Employers have had to make significant adjustments as a result of the Covid-19 pandemic and ongoing economic uncertainty. However, this latest research not only shows a significant reduction in graduate recruitment as employers cut back on hiring, but also a worrying decline in internships and placements. With further falls expected next year, this could have a devastating impact not just on the labour workforce, but also the skills of tomorrow. 

Indeed, the digital skills gap has been growing exponentially for some years, but the pandemic and global lockdowns have forced many businesses to embrace and expand online opportunities to stay afloat. This digital acceleration has put pressure on businesses to deliver, manage and secure new platforms. However, this research shows that IT and engineering businesses are still struggling to recruit graduates and find talent, suggesting that the available workforce is not equipped to meet the demand. 

As the war for talent intensifies due to the post-pandemic circumstances, employee development and talent pooling will become increasingly vital to building a modern workforce that’s adaptable and flexible. Addressing and easing workplace role transitions will require new training models and approaches that include on-the-job training and opportunities that support and signpost workers to opportunities to upgrade their skills. Similarly, investing in digital talent platforms that foster fluidity, by matching workers and their skills with new work opportunities within the enterprise will be key.”

Sam Humphries, security strategist, Exabeam:

“With sectors such as IT and engineering struggling to recruit staff despite leaving graduate jobs open, employers will need to cast recruitment net far wider to bridge the technical skills gap. Women represent a small percentage of a workforce desperate for more skilled workers. It’s a broad issue affecting many industries, but one that is particularly pronounced in cybersecurity.

According to a recent (ISC)2 survey, women working in cybersecurity currently account for only about one quarter (24%) of the industry. Yet in the recent State of the SOC Report 2020, nearly 40% of the organisations surveyed feel their security operations center (SOC) is understaffed. This is the disparity that – to me – makes looking for skills in an all-but untapped female talent pool an obvious solution.

My hope is that by supporting programs that expose and encourage women and girls to the possibilities of an education and career in tech, we can help address the skills shortage by introducing new perspectives and problem-solving skills to the industry.”

Employer stories

Saffery Champness LLP is increasingly recruiting more school leavers. The balance is currently split at around 80% graduates and 20% school leavers.  This year Saffery Champness LLP has maintained school leaver recruitment. They honoured all of the 40 graduate offers they had made up until March, but had to reduce the overall number that they intended to hire this year by 10-15%. All of their internships were put on hold and reoffered to successful candidates for 2021.   

Ian Williams, Recruitment Manager at Saffery Champness LLP said:

“It is important that we protect our current staff as well as new people moving in, so our approach to recruitment has been cautiously optimistic this year. We didn’t want to over hire or be in a position where we had to withdraw offers. While, like many other professional firms, we took the decision to reduce the number of graduate jobs this year this was only by a small amount, and we made sure that we could fulfil our obligations on offers that we had already made and maintained school leaver recruitment.

“Our appetite to recruit school leavers over a longer period is increasing. Partly due to commercial reasons, but also to help build a more diverse and inclusive team. Not everyone can afford to go to university, lots of people are opting for alternative routes and the calibre of those people is increasing.”

This year Fidelity International’s UK entry-level programmes were made up of 31% apprenticeships, 35% graduate schemes and 34% internship/placement programmes. 

Recruitment has been stable overall with 2% fall in graduate recruitment, 2% increase in school leaver hiring and 3% more internships than the previous year. 

Gemma Elsen, Global Head of Early Careers atFidelity International explained:

“We have been really lucky that all of our entry-level recruitment has been relatively stable this year. School leaver hiring has gone up slightly while we have slightly reduced our graduate numbers. This reflects our appetite to bring more school leavers into the business, particularly in operations and technology as well as the investment management space, which has been dominated by graduates. We have also been more successful in converting our placement students into graduate hires this year. Next year we hope to take on more interns than graduates, so they can be an even more effective talent pipeline.

“There is recognition at a senior level that we need junior talent. Regardless of what’s happening economically, we covet young people as they will be our future leaders. They also offer us a fresh perspective. We’re investing in diversity and we know we can turn the dial from a bottom-up approach, particularly with our interns and apprentices.”

This year Severn Trent’s entry-level programmes were made up of 60% apprenticeships, 20% graduate schemes and 20% placement programmes. Despite Covid-19, these programmes have continued. Apprenticeships have increased by 30% and graduate numbers have dropped by the same proportion as programmes are realigned to the company’s skills needs for the future.   

Jade Pearson, New Talent Programme Manager at Severn Trent explained: 

“We’re very fortunate that it’s been business as usual for us since the pandemic. We’ve just entered a new Asset Management Plan cycle, which enables us to identify the core skills and capabilities we’re going to need to be successful over the next five years. We’ve invested in our graduate engineering programme over the last few years whilst also introducing new apprenticeships in a range of occupations.

“Our recruitment strategy this year reflected all of this with a slight reduction in graduate numbers and an increase in apprenticeships. Despite lockdown we’re really proud to continue with our placements as the work is mainly office based and we were able to get onsite when necessary, in a covid-secure way.

“We’re always looking for new ways we can create opportunities for future generations irrespective of background through initiatives such as the Kickstart Scheme and our new talent programmes. We’re seeing a real kick-up in interest in apprenticeships across the business.”

Capgemini offers a range of entry-level opportunities mainly across apprenticeships and graduate programmes, along with some internships and placement roles.

Dan Doherty, Attraction and Recruitment Manager for Early Careers at Capgemini explained: 

“We transitioned to virtual assessment centres within five working days and have run 50+ sessions since March, with no adverse impact on hiring rates. Given our client base sits across many industry sectors, the impact of the pandemic was not equal across the business and the redeployment and recruitment teams were both busy managing the impact of Covid-19.

“Our early careers intakes this year were slightly lower than the YOY average but already we have seen the demand for graduates and apprentices across the business increase, similar to numbers for the previous year. We expect to see a record year of hiring as we recruit more entry-level talent into diverse apprenticeships, see an increase in the demand for internships and hire graduates into DevOps, Cyber and Data related roles for 2021.”

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